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Specific Coins to convert
#1
Good morning. 

    I have a question about converting BTC through Coinbase or wherever. I am trying to figure out a way to spend specific coins. For instance:
In order to reduce "capital gains" tax, I would like to spend recent coins mined. The IRS considers unidentified (not knowing when they were mined) as first in/first out. That would mean if I randomly converted coins from the beginning of mining (April 2017) I would I would be taxed 30/40% due to the fact that they were not mined more than a year ago. If I can isolate from my wallet coins the I (let's say) last month or so the gains would be less and I would minimize the hit. Thank you in advance for anyone's thoughts or knowledge on the subject..........Mine On!
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#2
(12-08-2017, 05:05 PM)Carbide Tool Wrote: Good morning. 

    I have a question about converting BTC through Coinbase or wherever. I am trying to figure out a way to spend specific coins. For instance:
In order to reduce "capital gains" tax, I would like to spend recent coins mined. The IRS considers unidentified (not knowing when they were mined) as first in/first out. That would mean if I randomly converted coins from the beginning of mining (April 2017) I would I would be taxed 30/40% due to the fact that they were not mined more than a year ago. If I can isolate from my wallet coins the I (let's say) last month or so the gains would be less and I would minimize the hit. Thank you in advance for anyone's thoughts or knowledge on the subject..........Mine On!

Hi Carbide Tool and welcome!  I am not an accountant or expert, but at this time virtual currency is very much like the wild west in many respects.  Obviously how our "investments" are tracked and reported is very fluid at this point.  I have done a fair bit of trading of stocks over the years - which is very well reported to the IRS, and when you make a trade, you can specify if you want to sell the oldest or newest stocks so that you can optimize your tax situation.  Obviously there is no gain reporting with coinbase to the IRS although I suspect that they will be reporting transactions in and out soon if not this year.  I am quite confident that until the "wild west" becomes more regulated like the stock market, there will end up being a fair bit of trust by the IRS.  Obviously there are a lot of transactions that would be impossible for them to track - and a lot of people are banking on that.  I think you are wise to be ahead of the curve and be responsible for your tax gains.  I am very confident that having a good reporting system would go miles if an audit were to occur - and I think you can select which coins you want to take the gain on - kindof like you can in the stock market.  Obviously once you take the gain on any particular mining revenue, you must be careful not to use it again.

Again, this is just the rambling thoughts of a fellow miner without a lot of knowledge on where this is all going to go.
Mike is the president of StrandVision Digital Signage.  He started BitCoin mining in 2017 and soon invested in other crypto-currencies.  Seeing the need, this site was created as a crypto knowledge repository and miner performance tracker.
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