1040 Tax Form Crypto Questions
1040 IRS Form Crypto Changes.
Wow, just wow. It might not seem like much, but every single person that fills out a 1040 tax form is now going to see that the IRS cares about Bitcoin? Not just Bitcoin; all crypto. Kinda makes you wonder what kind of pump we are going to get in December right at the end of the year only to dump in January or February.
All your crypto are belong to us, noobs!
---US govment
Whatever month we get action in, be it December and/or January, I believe the dump will be pretty sharp. I think a few traders are going to get overzealous and start pricing in the halving event 5 months in advance as the FOMO sets in. I expect this extra pump will make the market dump even harder when it comes crashing down (Hopefully January/February).
However, there is another wave coming in after that.
The Bitcoin halving is going to be priced in for real.
The Bitcoin halving will be mid May, so we might expect the event to start getting priced in around 2-3 months in advance (Feb/March), starting to dump around a month in advance (mid April), and continuing to dump for 2-4 weeks after the event (June). (If history repeats). Hopefully that would then lead into a summer bull run (in which I expect Litecoin to do quite well, being 10-12 months after the Litecoin halving event this year).
The problem is that the Bitcoin Halving hype wave in Feb/March might mash up with the Winter dump if they both end up happening during February. Feb 2020 might show some batshit market volatility, or the bottom of the market will be placed quickly and spring board up from there.
November has always been a really good month for crypto, this is exactly why I am not taking profits during this month unless they are quite extreme. The real money gets made in December/January if you can time when the dump is going to happen. In our cases, we time it with cost-average selling back into the stable hedge. Take no unnecessary chances.
Back to the actual topic.
I'm still a bit blown away that they are going to put crypto questions on the 1040 tax form at this time. Are they trying to create another April Tax Crisis? Don't be surprised... April is going to be a terrible month anyway from the halving dump. Taxes will just add to that.
Conclusion
I've made a lot of predictions here.
- November/December are almost guaranteed to be good months.
- Dump in January/February.
- Bitcoin halving pump in February/March.
- Bitcoin halving dump + tax dump in April/May.
The plan is to greatly increase my hedge in December so I have a lot more wiggle room to trade the into the rest of these waves.
As far as the IRS tax form is concerned... government changes like this are not trivial (because no government change is trivial) and we should take it seriously. Thanks for the free advertising and possibly tip off to the future, IRS.
I am trying to follow your logic with the IRS.
The changes will be on the tax forms brought out in 2020 for Calendar year 2019.
The question is going to pertain to ownership in 2019, any point. Hence selling in December or February is not going to matter. It does not apply to holdings at time of filing since it is always in arrears.
If Bitcoin gets pumped in December and than dumps in January, then all of a sudden everyone owes taxes on value that don't exist. This is exactly what happened in 2017/2018 and a lot of people blamed poor price action in April 2018 for this reason.
If your Bitcoin is worth a million dollars in December and is then worth 100k in April, you still owe taxes on a million dollars.
Taxes are not owed on assets unless sold.
Plus it is only on the gains so if someone paid $500K for the $1M BTC, the gain is only $500K. If the BTC was held more than a year, it is capital gains, less it is considered earned income (different tax rates).
Interesting read @edicted
I wonder how does all of it works in europe. At least in entire US you will have one law. In europe every country will have their own policies. So confisung ....
And because of exactly this reason I don´t think that the tax laws of a specific country (even US) have any influence on crypto prices.
It was quite an often occurrence during the last bear market that every movement was because of some such piece of news. Meanwhile, the price-action graph looks like a very predictable wave.
I still count on the dump in mid April as the halving approaches.
Lucky you that it is predictable for you :)
For me there too many conflicting news.