Hey Everyone
I just wanted to get some clarification on taxes and capital gains.
I think the case is that if I cash out profit within 12 months or less, I will be charged something like 20% on short term capital gains. Whereas I’ve been holding My ICO Electroneum now for just over a year.
I’m thinking if I cash out say half if there is indeed a bullrun this year/Jan. 2019 and store it in a more stable investment, will I be taxed 15% on long term capital gain?
Edit: That being said, if I choose to invest those realized gains in another asset, will I then be subject to further taxes, or should I keep it in USD locked away?
Any insight on this is appreciated. I’ve yet to claim any crypto gains on My taxes.
Since January I’ve been searching for adequate information on that and still haven’t found any. I read that they are treating it like property taxes but don’t hold me to that.
yes same thing in Australia. All I know is the government tax you 48% tax if you withdraw any profit before 12 months after 12 months it drops to about 28%…thats about all the idiots will tell us…as long as they get there cut they don’t give a shit…
Let this remain our only problem.
After having several million $, we will find a way to cash out without being ripped off by ‘‘The Man’’, as stated above.
Until then, keep your head down and fingers crossed.
It’s an excellent question. As long as the IRS treats crypto currencies like BTC and ETN as property, transactions should be taxable according to short- and long-term capital gains rates.
Short-term capital gains tax rates equal your ordinary income tax rate — your tax bracket. Long-term capital gains tax is a tax on profits from the sale of an asset held for more than a year. Long-term capital gains tax rates are 0%, 15% or 20% depending on your taxable income and filing status. They are generally lower than short-term capital gains tax rates.
If crypto investments were treated as commodities, as some argue they should, then they would be marked to market at the close of each year and you would be paying taxes on gains annually (for commodities, the length of time you hold does not affect the tax rate, unlike with traditional capital gains situations).
As to your question about reinvesting in other cryptos with your profits, each sale is a taxable event. Then your basis in the new crypto investment would be whatever you paid for it, and the cycle starts all over again.
Things have changed a bit as of late, it should be under capital gains especially after this new ruling. I have seen where Bitcoin is treated like a property tax but this just passed a little while ago.
If they’re all now considered a commodity that’d put it as a cap gains and keep it there I am quite sure. Long term capital gains ( 12 + month hold ) gives the much lower tax rate. I am no expert but from all I’ve read that’s how it’d be taxed.
Yeah that just happened on October 3rd so it’s a brand new ruling. Although pretty sure it keeps it under capital gains at least over regular income tax due to being a commodity.
I’m curious why we haven’t heard more about this from the rest of the crypto community. The previous crypto tax changes made in 2017 woke up the entire community; everyone was talking about them.
I heard about it through a crypto news outlet on Twitter and surprised I didn’t see it posted all over the place. It kinda seems it went under the radar but it’s indeed important news that should have gotten more attention. It should be easier for everyone to use since it’s not considered a security.
