04-24-2021, 04:11 PM
PSA: Taxes DO NOT Work the Same Way With Crypto as Stocks... and Your Accountant Mig
<!-- SC_OFF --><div class="md"><p>Edit: This applies to US taxpayers.</p> <p>Many tax accountants are treating crypto the same way they would stocks. Unfortunately, this is wrong, and if you've ever sold a coin at a loss then quickly bought back in... it REALLY matters.</p> <p>​</p> <p>With securities, if you sell at a loss then rebuy within 30 days you have performed a "Wash Sale" and your tax obligation will be more than just any gain minus loss. This rule does not apply to crypto. With crypto, you can simply add your total gains and losses together.</p> <p>​</p> <p>From the IRS documentation: "For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency." </p> <p>See page 25: <a href="https://www.irs.gov/pub/irs-pdf/p544.pdf">https://www.irs.gov/pub/irs-pdf/p544.pdf</a> </p> <p>Additional information in the links below:</p> <p>Crypto FAQ: <a href="https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions">https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions</a> </p> <p>See Also: <a href="https://www.irs.gov/pub/irs-drop/n-14-21.pdf">https://www.irs.gov/pub/irs-drop/n-14-21.pdf</a> </p> <p>Definition of wash sales: <a href="https://www.irs.gov/publications/p550#en_US_2020_publink100010601">https://www.irs.gov/publications/p550#en_US_2020_publink100010601</a></p> <p>Edit: This is financial advice. I am not your financial advisor or a fiduciary nor do I offer you any evidence that I am qualified to offer this advice in any way. I am writing under a pseudonym on Reddit. Please stop saying you aren’t giving financial advice under everything.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/ClimbingIce"> /u/ClimbingIce </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/mx7pqu/psa_taxes_do_not_work_the_same_way_with_crypto_as/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/mx7pqu/psa_taxes_do_not_work_the_same_way_with_crypto_as/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>Edit: This applies to US taxpayers.</p> <p>Many tax accountants are treating crypto the same way they would stocks. Unfortunately, this is wrong, and if you've ever sold a coin at a loss then quickly bought back in... it REALLY matters.</p> <p>​</p> <p>With securities, if you sell at a loss then rebuy within 30 days you have performed a "Wash Sale" and your tax obligation will be more than just any gain minus loss. This rule does not apply to crypto. With crypto, you can simply add your total gains and losses together.</p> <p>​</p> <p>From the IRS documentation: "For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency." </p> <p>See page 25: <a href="https://www.irs.gov/pub/irs-pdf/p544.pdf">https://www.irs.gov/pub/irs-pdf/p544.pdf</a> </p> <p>Additional information in the links below:</p> <p>Crypto FAQ: <a href="https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions">https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions</a> </p> <p>See Also: <a href="https://www.irs.gov/pub/irs-drop/n-14-21.pdf">https://www.irs.gov/pub/irs-drop/n-14-21.pdf</a> </p> <p>Definition of wash sales: <a href="https://www.irs.gov/publications/p550#en_US_2020_publink100010601">https://www.irs.gov/publications/p550#en_US_2020_publink100010601</a></p> <p>Edit: This is financial advice. I am not your financial advisor or a fiduciary nor do I offer you any evidence that I am qualified to offer this advice in any way. I am writing under a pseudonym on Reddit. Please stop saying you aren’t giving financial advice under everything.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/ClimbingIce"> /u/ClimbingIce </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/mx7pqu/psa_taxes_do_not_work_the_same_way_with_crypto_as/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/mx7pqu/psa_taxes_do_not_work_the_same_way_with_crypto_as/">[comments]</a></span>Kind Regards R