Is 1031 (IRS tax code) Applicable to Crytpo for Crypto Trades in 2017?
I don't even have the slightest clue what to do with my taxes this year. Although I've been in crypto since mid-2013 (when I first discovered bitcoin and made the fortunate decision to make my first investment into it), 2017 is the first year that I started making a lot of purchases of altcoins (with bitcoin) and it's also the first year that I've made significant profits from altcoins (converted back into bitcoin).
From my research into crypto taxation laws over the last couple of months, not only have I not gained any further understanding into what qualifies as a taxable event, but it's become clear to me that the supposed "tax experts" don't agree on what qualifies as such an event!
It's clear to me that crypto for crypto trades won't qualify as a tax defer-able event in 2018, due to the recent shall we say "re-wording" of the 1031 (property for property trade) rule, but what isn't clear to me is whether that's true for such trades in 2017.
One source that I've recently came across suggests that such trades do qualify for 1031 in 2017 (linked to below):
So my question to you is
What the hell?!
Yeah, I know that isn't an answerable question, but, seriously, what the actual hell?!!!
How the hell am I supposed to treat my taxes this year when the "tax experts" contradict each other on the relevant tax laws? I don't have a lifetime to figure this all out, a few months at best, so I really need to get this figured out and I know that many of you out there are in the same boat.
I feel like I'm not alone
I'd rather do my taxes right, according to the law, than to get audited and risk being accused of tax evasion/ fraud... I don't know about you...?
Then again, I'd prefer to defer my tax gains via 1031, if it actually does apply to crypto for crytpto exchanges through 2017.
So, my real question to you is:
Can you, with any confidence whatsoever, definitively, answer the question of whether 1031 applies to crypto for crypto exchanges through 2017? If so, how are you so sure?
And, while we're on the topic, one more question:
Steemit SBD and SP earnings via author and curation rewards qualify as "income", regardless of whether they are ever exchanged for fiat, yes or no? If not for fiat, for another crypto?
It sucks to be lost... :(
Can anyone out there provide a blind man with a walking stick? Anyone?!
Read the tax code for yourself and gain a better understanding of what it's conveying to you. Maybe you're not aware of this, but the payment of taxes is voluntary and is not required by any law. Also if you want to carry the position of ensuring you pay taxes, make sure you're paying taxes off the income you'd received from mowing someone's lawn for cash, or washing another's car for cash.
Hearing in which it is stated and answered that paying taxes is voluntary.
Citing some evidence and some remedies...
This is a very crucial topic right now. I am wondering if all of the tax confusion is designed to prevent mainstream America from accumulating cryptos before the real inflation event. Too good a space for me not to speculate in. Hopefully taxes will only be an issue when making money
I wonder that, myself.
At the very least, these tax changes hurt our chances to maximize profits on crypto. Before, using 1031, we could reinvest all of our crypto gains as we traded from crypto to crypto without worrying about whether we'll have enough liquid cash to pay for taxes.
Now that the IRS has made a distinction between "real" and "virtual" property and removed the latter from qualifying for 1031, every crypto trade will come attached with a 10+ percent tax (likely 20% or higher), meaning that at least 10% of gains are required to be set aside instead of reinvested, or you risk not having the cash to pay for your capital gains taxes.
What I need to do is dig into that tax code and try to find the backdoor they wrote for the good ol boy clubs to make their money off cryptos while evading taxes. Would bet 10-1 there is something designed for that purpose.
Yeah. I'd do the same if I felt I had any chance whatsoever of accurately interpreting all the "law-dialect"...and I wouldn't bet against you, either.
Never thought of that. I'm familiar with 1031 because of real estate as its used in the space often. However, its not a thing with stocks and even though I know the IRS tagged crypto as "property" it seems to be more in the light of comparing it to a stock.
The whole tax environment is going to be a mess on this over the next year. Gonna be interesting!
Interesting...yeah, I guess that's one way we can put it, lol.
Heres what Im doing with mine. Im paying HR Block to do them that way if it gets F'ed up it on them and not me.
Unfortunately you are still responsible if a tax preparer makes a mistake. I heard a lot of people are using https://bitcoin.tax/ . Seems like a decent program for assessing capital gains.
I've downloaded that program, and it does help nicely with organizing the trades from various exchanges, but what it doesn't do is comply with 1031, IF the property for property exchange rules qualify bitcoin and cryptos as property through 2017.
Furthermore, while it will significantly speed up calculating taxes on crypto exchanges, it won't do anything to help with trying to do accounting on the mess that is Steem transactions. I foresee many days worth of hard work and headaches to add up all the little payments here on Steemit... something I'm sure no tax preparer would touch with a ten foot pole.
Seems like a smart move to me. I've always done my own taxes, but it might be time for me to start looking around for a professional to take care of it for me, especially considering how much my income and capital gains have increased over the last year.
I’m just going to wait until someone tells me what to do, and then argue with them until I feel jail is a possibility. Any transaction made between altcoins sounds unreasonable to tax because this is not currency issued by the state, nor is it exclusive to one country. Fiat to crypto and crypto to fist seems like fair game I think. But fair isn’t really what they do, so, Iduno. Let’s focus on manifesting a world without taxes socwe don’t need to worry about this.
Yes please.
i agree with you, It sucks to be lost..
didn't yet experienced something like this but looks like need to know from others steemians on this thing
Yeah. It sure would be nice if someone could do my taxes for me this year and somehow guarantee that they're done correctly.
The entire expense condition will be a wreck on this throughout the following year. Going to intrigue!
Yes, this is the only part that sucks with crypto right now.
i hope btc wll chase 30000 dollar price in this year
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