How Crypto Taxes Work – Miyagi Mornings Episode-102 — 1 Comment

  1. Good rant and even better information. Good job all around.

    The tax rules sort of follow basic accounting or is it cot accounting 101. The cost of the traded item is bench marked at trade and conversion to capital gains / loss at time of conversion. So bit coin is sort of a currency and barter all rolled up together.

    Good point that if you can trace your specific transaction to a specific bit coin transaction you can sell the specific coin that would meet long term / short term capital gain, and at a loss or grain. Pretty much what you can do with stock purchases.

    So if each day I create a wallet with that day’s net transactions for the day, I can flag the specific cost of said coin, and work from there. I can then select which wallet that I buy /sell / trade from so I can follow the the rules. I had done this sort of thing when I had some stock trades. I would trade some that were under water with stuff that I made a profit on to offset capital gains / losses.

    Boy is there a lot of data that needs to be tract if you decide to track all the info you need to make sure what is traded / converted has been flagged to your best benefit.

    Now just wait for an audit and have them demand all that unique data that turns all bit coin style transactions tagged to your wallet. It sort of makes you go ARRR(G).

    For a fun movie – see the 1959 flick that covers some of these “barter” issues…the movie title was “The mating Game”. Tony Randal & Debbie Reynolds