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RE: 2019 IRS Tax forms asks if you earned or own cryptocurrency
I'm happy that the Netherlands has an easy tax rule for crypto. Just a percentage on the total at the end of the year, like any other asset. None of this crazy capital gains on every single transaction...
Austria is even better, you don't pay taxes at all if you hold crypto for more than a year :)
Holy moly! That is really great!
How does that work?
You declare your holding in euro's at the change of financial year, then you are liable for 1.2% or something like that. Just like other assets like property.
So, capital gains tax does not apply to crypto at all? Instead, you pay a percentage of the total in euros at the end of the tax year. Interesting. Could be tricky because if the value of your holdings peaks at the end of the year, you have to sell immediately because you might end up owing more than you have. I prefer capital gains tax.
Steem is earned income.
No capital gains, which means a single once per year accounting rather than the continuous tracking of capital gains on every single buy/sell transaction with no clear idea of which method of tracking (FIFO or otherwise...) is actually correct.
Yes, the price could peak just before the 1st of January, but even if it peaked across the board by 10% then that would make for 1.21% of holdings... Then if it crashed afterwards, it would still not be than much different. To make it to roughly 2% of original holdings, you would need to peak by around 66% and then crash immediately after accounting by around 40%...that's not really likely from size and timing (and that is only to make it 2% from 1.2%!).
On the other if it parked across the board by 10 million percent then immediately crashed by a similar or greater amount, then it would be noticeable.
However, I much prefer the simplicity of a single accounting point compared to potentially millions in a year!