Content adapted from this Zerohedge.com article : Source
A Reddit user posted how he made a lot of money trading Bitcoin in 2017 which caused him to owe a lot to the IRS.
The problem is that the money was lost in the drop in alt-coins.
In January, the alleged trader using the screenname Thoway, bought Bitcoin in January 2017 for $7,200 and sold it at the peak, triggered a taxable event according to the I.R.S.
The bill: $50,000.
Thoway said his lawyer advised him to cash out his remaining altcoins and give whatever is left to the IRS. Thoway, who has not been identified and has apparently gone "missing" from Reddit since his post went viral, told readers that he earns $47,000 a year as an office assistant.
Thoway's lawyer said he should be able to set up a payment plan allowing him to pay down the debt over a long-period of time, likely ten years. Still, Thoway complains that, during that period, his tax payments will likely siphon off most of what would've been his savings, meaning he has essentially been condemned to live paycheck to paycheck for the foreseeable future because he made a profitable trade, but ignored the tax consequences.
"I feel like I might have accidentally ruined my life because I didn't know about the taxes," he said.
While the original post was removed by Reddit for several violations in the comments thread, it's extremely likely that the anonymous Reddit user isn't alone in his predicament.
Fundstart's Tom Lee believes much of the downward pricing pressure on bitcoin is due to people cashing out to make payments to the I.R.S. During the past month it dropped 40%.
According to Lee, each dollar pulled out of cryptocurrencies drops the marketcap $20-$25.
Lee also believes that cryptocurrency capital gains amount to $92 billion, about 20% of the capital-gains tax.
"We still like Bitcoin and large-caps,” he said, adding that “while we believe the bear market for alt coins is largely over, we do not see upside for alts until mid-August.”
Non-adapted content found at zerohedge.com: Source