Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

ZeroThreat · 15-05-2018 4:14pm

xabi wrote: »

No idea if the ETH changed as it was all completed in a few minutes, would the charges for the transfer offset any small gains?

Is there any actual resource available out there that gives the historical prices on each cryptocurrency right down to the hour and minute of any particular date?

Also, would you be using the 'global' price at disposal of the Eth, or price at that date, hour, minute on the exchange it was originally purchased on?

Edit - The information about valuation from the revenue update seems pretty vague about these issues tbh.

'4. Valuation of cryptocurrencies

Many cryptocurrencies, such as Bitcoin, are traded on a number of exchanges. Unlike shares
or commodities the value of the cryptocurrencies may vary between exchanges. Therefore,
there is not always a single “exchange rate” for cryptocurrencies. A reasonable effort should
be made to use an appropriate valuation for the transaction in question.'

cysv · 10-07-2018 8:09pm

Read through 72 pages and found a lot of answers, Thank you for that.

But still have couple questions regarding failing paying CGT on time:

1. For the ones that did not pay lets say in 2017 and submitted CGT only autumn 2018, what was surcharge/penalty? What % to expect?

2. I know that some was asking the above question before and answer was that it depends on the amount of tax to be paid, like if it small amount than Revenue can let it go, but if it bigger amounts than you have bigger problems. Question here would be, what is 'big amount', like are we speaking about 10-90k as big amount or 100k-10kk?

3. Lets say I come to Revenue and say that I own that amount as CGT and I am default, can I ask to pay monthly for some period of time? E.g. like for 2 years? Not the whole lump sum. Is there any agreement like that can be achieved with Revenue?

4. Can Revenue ease penalties based on that I novice to this kind of things and I wanted to use money for my own property deposit?

5. Fat thinger problem: I wanted to sell 100 coins, but put 1000 accidently, when I spot I already sold 500 of coins, I cancelled order and bought back 400 at the same minute. Thing is that market was at downtrend, so I bought back a bit cheaper. Is there a way to convince Revenue that my itention was not to dispose 500 coins and it was fat thinger problem?

Thank you for your help.

thegolfer · 10-07-2018 10:23pm

cysv wrote: »

Read through 72 pages and found a lot of answers, Thank you for that.

But still have couple questions regarding failing paying CGT on time:

1. For the ones that did not pay lets say in 2017 and submitted CGT only autumn 2018, what was surcharge/penalty? What % to expect?

2. I know that some was asking the above question before and answer was that it depends on the amount of tax to be paid, like if it small amount than Revenue can let it go, but if it bigger amounts than you have bigger problems. Question here would be, what is 'big amount', like are we speaking about 10-90k as big amount or 100k-10kk?

3. Lets say I come to Revenue and say that I own that amount as CGT and I am default, can I ask to pay monthly for some period of time? E.g. like for 2 years? Not the whole lump sum. Is there any agreement like that can be achieved with Revenue?

4. Can Revenue ease penalties based on that I novice to this kind of things and I wanted to use money for my own property deposit?

5. Fat thinger problem: I wanted to sell 100 coins, but put 1000 accidently, when I spot I already sold 500 of coins, I cancelled order and bought back 400 at the same minute. Thing is that market was at downtrend, so I bought back a bit cheaper. Is there a way to convince Revenue that my itention was not to dispose 500 coins and it was fat thinger problem?

Thank you for your help.

General reading here is that you seem to have a tax liability, however Revenue will take it on a case by case basis.

This is assuming an audit situation.

Penalties range from 3% up to 100%, the 100% being outright tax evasion and the worst.

However if you are only late paying for 2017 then interest will most likely only apply 10%annually.

Establish your tax liability first, then payment.

The return for 2017 is due 31 October next. Late returns only have a surcharge of 5%/10%.

As the system is self assessment revenue will not seek to look at the individual trades, just the overall position you report to them.

In an audit situation, they would examine most transactions.

If in doubt speak to an accountant, who will assist you on these areas.

CryptoReview · 11-07-2018 11:04am

Morning

I have 2 questions, hoping someone knows the answer.

How is mining/staking taxed?

Are airdrops taxable?

ZeroThreat · 11-07-2018 12:16pm

Well it's no coincidence that posts in this thread declined in line with the crypto market disappearing down the toilet bowl for the foreseeable future....

Zascar · 02-09-2018 2:26pm

Quick question, I bought some crypto last year and it has gone down significantly. I may now need to sell. Can I offset my losses off a potential tax liability I have for rental income?

AlmightyCushion · 02-09-2018 4:29pm

Zascar wrote: »

Quick question, I bought some crypto last year and it has gone down significantly. I may now need to sell. Can I offset my losses off a potential tax liability I have for rental income?

Nope. You can only offset it against capital gains.

canijustask · 02-11-2018 12:20pm

Hey guys, I have a question regarding taxation of cryptocurrencies.

I asked an accountant how this is taxed and he said that both Capital gains AND income tax applies. He made it sound like i would have to pay 33% and then pay income tax as well? That can't be right? That would be nearly 60% for me?

I read this article and it makes the distinction: if you're "investing" in cryptocurrencies then you are taxed Capital gains.

If you're a "trader" then you pay income tax.

So my question is if I'm an "investor", do I just have to pay Capital gains @ 33% (on the profit) when I cash out, or will I have to pay Income tax on top of this? Thanks

canijustask · 02-11-2018 12:20pm

Hey guys, I have a question regarding taxation of cryptocurrencies.

I asked an accountant how this is taxed and he said that both Capital gains AND income tax applies. He made it sound like i would have to pay 33% and then pay income tax as well? That can't be right? That would be nearly 60% for me?

I read this article and it makes the distinction: if you're "investing" in cryptocurrencies then you are taxed Capital gains.

If you're a "trader" then you pay income tax.

So my question is if I'm an "investor", do I just have to pay Capital gains @ 33% (on the profit) when I cash out, or will I have to pay Income tax on top of this? Thanks

grindle · 02-11-2018 12:31pm

canijustask wrote: »

I just have to pay Capital gains @ 33%

This.

unkel · 05-11-2018 12:45am

The article you read was right, so you are right and your accountant is wrong. Dump him!

Noctifer · 25-11-2018 12:53pm

Anyone used bitcoin.tax to calculate due tax for Ireland? I have thousands of transactions even though I stopped trading back in February, so doing it by hand is an impossible task.

Or any other site suggestions? I have between 1000-2000 transactions for 2018 so any site that would not charge crazy prices (anything up to 50 euro is fine) would be great.

super ted rules · 17-04-2019 11:54pm

Can anyone confirm if LIFO has been accepted by Revenue in their tax returns?

super ted rules · 26-04-2019 7:23pm

super ted rules wrote: »

Can anyone confirm if LIFO has been accepted by Revenue in their tax returns?

Everyone has a different view if LIFO or FIFO can be applied.

There is no specific mention how to calculate the cost basis for CGT in the guidance from Revenue last year.

The HRMC uses pooling and the 30 day rule.

Pawinho · 04-09-2020 1:17pm

super ted rules wrote: »

Can anyone confirm if LIFO has been accepted by Revenue in their tax returns?

Koinly.io use FIFO.

Del Griffith · 17-09-2020 4:10pm

https://www.thecurrency.news/articles/23977/

"I expect change on CGT to come quite quickly, with the economic shock caused by the pandemic expediating matters. The word in government circles is that a temporary reduction will be unveiled in Budget 2021."

Stormington · 17-09-2020 8:07pm

Del Griffith wrote: »

https://www.thecurrency.news/articles/23977/

"I expect change on CGT to come quite quickly, with the economic shock caused by the pandemic expediating matters. The word in government circles is that a temporary reduction will be unveiled in Budget 2021."

PW; DR.
My limited understanding of CGT is that of all taxes, it is the one that actually takes in big money from the mega-wealthy most reliably and regularly. In light of the economic and productivity hits from the pandemic, a reduction in CGT would reduce tax liability for asset owners in a big way and allow them to free up capital until their assets are generating higher expected returns.

With the knock on effect of potentially allowing mere mortals/defi degenerates to do likewise.

D-K · 18-09-2020 4:05pm

Hi,

Just looking to fill out the CG1 form for 2019. I have made a loss so
just wondering where i enter the minus figure.Is point 18 where i show this?

Pawinho · 27-11-2020 5:51pm

What about all interest received from BlockFi, Celsius Network or crypto exchanges? Are they capital gain tax, or DIRT ?

Stormington · 27-11-2020 7:18pm

Pawinho wrote: »

What about all interest received from BlockFi, Celsius Network or crypto exchanges? Are they capital gain tax, or DIRT ?

Income, IIRC.

Pawinho · 28-11-2020 2:04am

Stormington wrote: »

Income, IIRC.

Do you know any good accountant service which is well oriented in crypto?

wally1990 · 28-11-2020 2:58am

Pawinho wrote: »

Do you know any good accountant service which is well oriented in crypto?

In terms of the buy and sales, it's treated the same as shares/stocks in general/for CGT with FIFO method

Is there certain tailored advice you're looking for regarding your own portfolio or general advice on the whole area of crypto and tax?

Stormington · 28-11-2020 10:35am

Pawinho wrote: »

Do you know any good accountant service which is well oriented in crypto?

No. You may not want to bother with an accountant unless you think you owe five figures in tax. That assumes you are PAYE and trading on the side.

Koinly.io is very good. I'm on the free version and its enough for me so far. If things were more complex I'd upgrade (referral link to save you money here).
For accountants, Koinly has a list here.

EDIT: you might want to double-check Koinly. I noticed a few transfers that were classed as profitable trades, even though all I had done was move the same asset from wallet a to wallet b. The closest comparison I can think of is moving cash from Bank of Ireland to AIB.

Can someone more familiar with Koinly comment on this?

EDIT 2: Answer: some trx have to be entered manually.

Pawinho · 29-11-2020 12:16am

I use Koinly.io "trader+" plan. There was good few transaction which I had to edit. Anyway it is a great tool.

Pawinho · 29-11-2020 12:22am

wally1990 wrote: »

In terms of the buy and sales, it's treated the same as shares/stocks in general/for CGT with FIFO method

Is there certain tailored advice you're looking for regarding your own portfolio or general advice on the whole area of crypto and tax?

Just general advice I don't want to mess up tax declaration a year before next cycle top.

Stormington · 29-11-2020 12:34pm

Pawinho wrote: »

I use Koinly.io "trader+" plan. There was good few transaction which I had to edit. Anyway it is a great tool.

You need to buy the trader plans to get the report, but they will calculate it for free. Clever.

Still worth paying for though.

timeToLive · 04-01-2021 11:34pm

koinly seems good although some of my API connections seemed to fail - it may be user error though, I'll have to take a look at it again.

On their tax page, https://koinly.io/tax/, they have this:

Universal or Wallet-based cost tracking. Keep track of your costs in a universal pool shared across all connected wallets or separately for each wallet

Does anyone know if this applies to Ireland? Can we use either method? I can't find anything online about it.

Stormington · 04-01-2021 11:40pm

Can't edit my earlier post

Koinly does tax reports.
Link your wallets (as many you want).
Run the report - its free.
If you want a document to send for tax returns, buy a report (80 quid).
Use the below link to get money off a tax report.
https://koinly.io/?via=D3F3A819

Universal or Wallet-based cost tracking. Keep track of your costs in a universal pool shared across all connected wallets or separately for each wallet

Does anyone know if this applies to Ireland? Can we use either method? I can't find anything online about it.

I think this refers to pooling the info from all of your wallets into one report. I may be wrong.

When you say applies to Ireland, do you mean FIFO or LIFO? We use FIFO, as do koinly.

EDIT: Wallet-based cost tracking: Your cost basis will be tracked separately for each wallet. If in doubt, leave the settings on default. They are off by default.

Frozen Veg · 16-01-2021 10:51pm

To date I have done very little trading on crypto so easy enough to calculate if any tax due and amount etc.

Contemplating now putting a setting up a small recurring weekly purchase. But is there an relatively straightforward way down the line to calculate how much tax would be due if the lum sum was to be sold as each purchase would have been bought at a varying price?

Stormington · 17-01-2021 7:04pm

Frozen Veg wrote: »

To date I have done very little trading on crypto so easy enough to calculate if any tax due and amount etc.

Contemplating now putting a setting up a small recurring weekly purchase. But is there an relatively straightforward way down the line to calculate how much tax would be due if the lum sum was to be sold as each purchase would have been bought at a varying price?

FIFO. Koinly uses it by default in line with Revenue.

ronivek · 27-01-2021 8:32pm

Apologies if this has been posted before:

What category do you all use for Cryptocurrency gains on the CG1 form?

I figure it's 'Other Assets' but the number of disposals if counted as number of individual exchange transactions could be quite large; so I wondered if bundling them into 'Shares / Securities' might make sense.

Stormington · 28-01-2021 4:50pm

Other assets is what I would suggest.

They aren't shares (you don't get a share of the business) and they definitely aren't securities. Jesus, that's the last thing they want to be classed as.

Jafin · 08-02-2021 5:30pm

Hi all,
I have a question about registering for CGT, apologies if it has already been answered in here but it's a lot of pages to go through. I started buying crypto about 11 months ago and I have never cashed out, I've kept it all in an exchanged (I know some don't recommend to keep it in an exchange, but that's not what my question is about). It was my understanding that you only have to pay CGT when you "cash out," i.e. turn crypto into fiat. My question is even though I have not cashed out should I already be registered for CGT and am I supposed to be declaring it every year on my tax return even if all I have done is put money into it and never taken any out? What about if I have exchanged from one crypto to another? For example a week or two ago I exchanged some of my BTC for ETH, but I did it directly on Coinbase, where all my crypto is stored.

Thanks for any help anyone can give. This is all still relatively new to me and I don't want to get a nasty surprise in the future simply by not knowing all the facts.

rapul · 08-02-2021 5:50pm

Get everything off coinbase.

Jafin · 08-02-2021 5:59pm

rapul wrote: »

Get everything off coinbase.

That wasn't really what the question was about but I do understand it's a no-no to keep it on an exchange. For argument's sake let's say I transferred it all to a wallet today the other questions remain - would you be able to help with any of that?

rapul · 08-02-2021 6:07pm

Someone else more knowledgeable will help u on that, I just had to say get off of coinbase incase, exchanges are bad to hold everything you on own.

grindle · 08-02-2021 6:28pm

Jafin wrote: »

My question is even though I have not cashed out should I already be registered for CGT and am I supposed to be declaring it every year on my tax return even if all I have done is put money into it and never taken any out? What about if I have exchanged from one crypto to another? For example a week or two ago I exchanged some of my BTC for ETH, but I did it directly on Coinbase, where all my crypto is stored.

If you trade BTC for ETH and you're up in €/BTC terms, you've realised a gain and owe tax if above the €1270 CGT tax-free limit. No ifs ands or buts.

ronivek · 08-02-2021 7:23pm

Unfortunately Revenue’s documentation is sorely lacking; but there is absolutely nothing to suggest exchanging one cryptocurrency for another does not count as a disposal or chargeable event.

HMRC in the UK explicitly count such exchanges as chargeable as per https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals; so I think it’s safe to assume Revenue would too.

At the end of the day you’re not going to get in trouble for paying CGT you don’t actually owe so my advice would be to assume you owe it until Revenue tell you otherwise in writing.

Jafin · 08-02-2021 7:35pm

correct horse battery staple wrote: »

From my understanding (i am not an accountant so...) once you convert crypto (any coin) to a currency (eur, usd etc) thats a taxable event even if you immediately use it to buy another coin

I have been giving my accountant receipts of trades buying crypto (they should have amount, time and exchange rate on it) and then receipts of trade when selling all or portion of crypto, they go off an calculate my liability for the year when doing my yearly return. Theres 1250 or so in tax free gains allowable per year, keep that in mind which is enough to cover most traders doing small trades.

I am fairly sure you dont have to file anything if there was not a taxable event (above) occuring in that year

To be honest i think alot of people buying and selling often could endup in alot of trouble, definately keep copies of every trade and keep in mind that exchanges could be down or just dissapear in crypto world so ensure you have paper trail of every trade on hand as well as cloud saved images of them.

Once again i am not an accountant but thats the advice ive been operating for years now paying revenue a ton in that time. Whether you store on exchange (brave man, wait till i tell you about mtgox back in day ) or transfer to hardware wallet (do this) is not relevant.

When it comes to Revenue dont forget you are guilty until you prove yourself innocent so keep ALL paperwork of transactions, in case of audit.

Many thanks for this! I had no idea until today that converting from one crypto to another counted as a taxable event, so I'll definitely start keeping a proper record of that. I already keep records on a spreadsheet every time I purchase some crypto with Euro, so at least I already have a bit of that done. I hadn't thought of putting the exchange rate at the time in though, so I'll go back and do all that and include transaction fees etc. and keep doing it in the future. Thanks again!

Jafin · 08-02-2021 7:37pm

Thank you also to grindle and ronivek for the above.

Jafin · 08-02-2021 10:42pm

correct horse battery staple wrote: »

Also try to save a screenshot of the trade(s) and/or order, for example i was trying to find order details for an order at a well known exchange for 2015 but they only had trades listed (order got split into dozes on trades at the time as i did a market buy of btc). I contacted support and was told that they dont keep order details before 2017, so yeh that kinda sucks, and now have to give a bunch of paperwork for a single buy order which got split over dozens of trade by their system.

Keep in mind exchanges could be down too (ddos or busy like today) or just dissapear, i had small amount left in mtgox (like few dozen euro back then) which would probably be thousands at todays rate but whatever, lesson learned. So you could endup with no paperwork to show your coin history.

Thanks, I'll keep that in mind. I'll start getting everything sorted with screenshots and updating my spreadsheet at the weekend.

relax carry on · 08-02-2021 10:45pm

Revenues guidance is clear on thing that there's no special rules for the taxation of Cryptocurrency. For most people, the normal rules of CGT apply. So if you gift, exchange or sell an asset (Cryptocurrency) you may have a chargeable event. So changing some Cryptocurrency for another may mean you have chargeable gain if your original cryptocurrency has increased in value since you bought it. The same applies for buying something with your Cryptocurrency. If you buy something with it and it had increased in value since you first bought it, you may have a chargeable gain. If you sell it for euros/dollars etc and the Cryptocurrency had increased in value then you could have a chargeable gain. If you gift some cryptocurrency to someone and the Cryptocurrency had increased in value since you first bought it then you may have a chargeable gain.

Just understand the normal CGT rules and keep good records of each transaction you make. Either pay and file your CGT return yourself or have an accountant do it based on your records.

https://www.revenue.ie/en/companies-and-charities/financial-services/cryptocurrencies/index.aspx

Rob2D · 09-02-2021 1:58am

relax carry on wrote: »

Either pay and file your CGT return yourself or have an accountant do it based on your records.

Or depending on how well some of you OG's do, move to Thailand and never come back.

Peregrinus · 09-02-2021 1:59am

What relax said. Crypto is treated like any other asset — there are no special rules. And the general rule for any asset is that if you sell it, give it away or swap it for another asset, that's a disposal, and if there is a gain that's a chargeable event.

Cryptonovice · 09-02-2021 3:29pm

I asked revenue these questions before in 2017. They replied and said if you buy a coin you need to do nothing until you go to sell it. A disposal falls under sell, gift or exchange. So if you swap one coin for another it's a disposal. If you just buy a coin and hold it for years you don't need to do anything until you sell it . Straight from the horses mouth.
Go back through the thread it's all in there. Best of luck.

ILikeBananas · 09-02-2021 5:28pm

There's something that I am not sure about that is probably best asked about using a simplified example:

I buy 1 unit of Crypto A for €1
I sell 1 unit of Crypto A for €11
I buy 1 unit of Crypto B for €11
I sell 1 unit of Crypto B for €5

So I make it that I am required to pay Capital Gains of €3 on account of my gains on Crypto A (30% of 11-1)

Can I offset some of the €6 loss that I incurred on Crypto B from my tax bill?
If so, how much?

Peregrinus · 10-02-2021 1:19am

All of it, assuming both disposals occurred in the same year. So you've got a gain of €10 on disposal of Crypto A, against which you offset a loss of €6 on dispoal of Crypto B, leaving you with a net chargeable gain of €4.

Different story if the two transactions occur in different years. Let's say you sell Crypto A and buy Crypto B in year 1. At the end of year 1 you are still holding Crypto B. So in year 1 you have a gain of €10, and no loss, so a net chargeable gain of €10, on which you calculate and pay tax.
(I'm ignoring the small gains exemption here, obviously.) Then in year 2 youy sell Crypto B, generating a loss of €6. You can set that loss off against any gains that arise in year 2. And, if you don't have any gains, or enough gains, in year 2 you can carry forward the loss, or the unused portion of it, to year 3, year 4, etc. But you cannot carry it back to year 1.

(Which means that if, coming up to the end of year 1, your holding of Crypto B has already depreciated to €5 and you doubt that it will recover, you might decide to sell it before the end of the year rather than after, in order to be able to offset the loss against the gain that accrued in year 1.)

Grumpypants · 10-02-2021 2:48pm

The only legit tax offset I can think of is if you make a chunk of profit (pay the GG on it). Then you can use that chunk to offset the wages you need for living, and load a good chunk of your wages into a pension tax free.

If you are in your 40's and on 40k you can put 10k of it into the pension tax free.

Elessar · 13-02-2021 12:26pm

This is an absolute socialist cuckshed of a country.

33% CGT and a measly €1200 tax free. I regularly chat with other crypto investors from the likes of Belgium/Portugal etc. where there are no taxes on crypto. Some are cashing out millions, tax free. Even in the UK the allowance is £12300 before you are taxed and then its only 20%.

We really do get shafted here with capital gains taxes.

Irish_rat · 13-02-2021 12:43pm

Elessar wrote: »

This is an absolute socialist cuckshed of a country.

33% CGT and a measly €1200 tax free. I regularly chat with other crypto investors from the likes of Belgium/Portugal etc. where there are no taxes on crypto. Some are cashing out millions, tax free. Even in the UK the allowance is £12300 before you are taxed and then its only 20%.

We really do get shafted here with capital gains taxes.

Which is why a lot of us will be holding long and when it's worth selling in the millions we will be exiting stage left.

Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

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