Handling taxes on crypto purchases

[Biglittlejoe]

Would there be any way for the IRS to know about my bitcoin transactions with Cash App if I don’t report them?

 

[Buffed Shark]

Did you even read what you posted. Or you just copied and pasted an answer to a question you didn't know the answer to prior.

Well i'm not telling you an opinion this is what i do for a living and i dont need chat gpt to say this but let me simplify it to you as if you are a 5 yr old since you obviously cant even read.

Crypto in the sake of argument in the eyes of the irs is just money. If your money(crypto) makes money guess what you pay taxes on the gains. Of your money brings in a return(dividends/distribution/simple income) you pay taxes on that to. Now the only difference is crypto is considered a capital asset meaning its more like a stock not a dollar bill. At the time of purchase (sending crypto) you are considered that you sold it.

So after you paid your taxes on the money you earned you can go spend this money at the grocery store, buy multiple size dildos do wte you want with it. At this point the irs isnt concerned. Unless you make profit on your dildos when you sell them which is highly doubtful.

So people trying to complicate things and appear financially sophisticated like yourself getting chat gpt's opinion when you dont even have any idea what you are talking about.

To simplify this even more. Imagine you sold the crypto itself for usd (assuming you didnt just buy it to send it) and send $ now at the end of the yr you'll have that selling event neetly showing in your statement and room temp iq people like you wont have a hard time hopefully extracting that.

Another option is just buy the fuckin xrypto before you send it this way there's never a gain in the 1st place.

For those who have a higher iq. A loop hole you can use is taking standard capital losses deduction. You bought an nft with your crypto that went from 3k to 1k. (Worth mentioning capital losses have a limit)

 

[Buffed Shark]

Would there be any way for the IRS to know about my bitcoin transactions with Cash App if I don’t report them?

Cash app or any us platform for that matter sends the irs 1099's for every account holder. Does the irs cross refnce that to see what you reportred, yes do they do it with everyone, no. Even with modern Computing this is a tidepus task so sampling is usually the way. Basically pick a sample of people and cross refrence them. If they see too many violations they increase the sample.

 

[BeardedGuy]

What I know is that all the crypto I sent out of Coinbase and CashApp shows up as capital gains on the 1099s. I should probably check w a tax professional.

 

[Buffed Shark]

What I know is that all the crypto I sent out of Coinbase and CashApp shows up as capital gains on the 1099s. I should probably check w a tax professional.

It makes sense. Like i mentioned sending crypto is selling the capital asset. Therfore if you had any gains on the coins you sent they'll go under your gains for that taxable year

 

[BeardedGuy]

It makes sense. Like i mentioned sending crypto is selling the capital asset. Therfore if you had any gains on the coins you sent they'll go under your gains for that taxable year

So, but it wasn’t just gains, it was the whole amount was assumed as gains because the asset was gone. So they assumed 100% value as gains. At least that’s how H&R online did it.

 

[Biglittlejoe]

So realistically are the meso RX members who use bitcoin to pay sponsors for PESs going to report these transactions to the IRS? What should we do?

 

[Buffed Shark]

So, but it wasn’t just gains, it was the whole amount was assumed as gains because the asset was gone. So they assumed 100% value as gains. At least that’s how H&R online did it.

I'm not sure how h&R block does it but you definitely don't need to pay taxes on your principal. You already paid taxes on it when earned.

 

[BigDadd7]

If I buy a house for $100 and sell it for $100, that is not a gain.