Is all this legal?
In my previous post I talked about being new to the industry and how I plan to get involved. I've done lots of research and can't wait to get in on the cryptocurrency revolution!
My concern is legality. I've watched people make hundreds of thousands on Mining, lending and trading cryptocurrency my question is if there is any legal risk?
Let's say you make a lot of money and you then exchange that crypto for "dollars" do you have to pay tax or is there fear of laundering? Could you get questions at the bank of why you are randomly depositing large sums of money?
Pardon if my question is dumb, I realize the reason crypto was brought up was to avoid government central banking or third party interference. I am just curious on if there is any risk here!
Thanks in advance!
I'll offer you my 2 cents from what I know. Anytime you earn money whether it be through another form of currency and convert it to USD, the IRS wants their share. YOU are responsible for reporting that income. I'm new to it as well but I'm only using very small amounts of my money to learn with. Put it this way, look at how the government would know you were making tons of money on the stock market. And if you got filthy rich, you'd better believe they'd want to know how you got there. I would suggest seeking a tax professional to answer your questions.
I was kind of thinking the same thing. Once you make money, everyone wants a piece of it. I just don't understand if that's how it works or not. Seems like you'd have to pay tax right away?
For instance of stocks. You pay capital gains tax, and you pay to trade. The bitcoin sites you don't generally pay anything it's all free flowing.
Interested to hear any other points of views or experiences with more experienced cryptos.
Here's a good post for your answers.
https://steemit.com/money/@cryptotax/is-bitcoin-gold-is-taxable-in-the-u-s
Thank you!