Tuesday, April 13, 2021 6:49:30 PM
1) Yes, crypto currency gains should be taxed and will be taxed. Currently, exchanges such as coinbase are required to report any cumulative annual transactions $20,000 or greater to the IRS. Just like banks are required to report $10,000 transactions.
2) Currently, if you have records to prove purchase date and sell date (freely provided from coinbase as an example), crypto will be taxed like any other capital gain if held for more than 12 months. *** comment *** fine by me, I will happily pay 15% on my personal gains. That means I made money. Better than regular income tax.
Opinions:
Due to #1 above, there will likely be plenty of leeway on utilizing crypto currency for small transactions. I.E. I will not likely be paying capital gains tax on my starbucks coffee purchase by using my bitcoin. However, if I cashed in $20k in assets during the year..... yes, my small transactions will also be picked up in the report from the exchange. Technically, I would be paying taxes on them in some years.
Major common sense opinion...... When all the big wall street firms are putting a % of client assets into crypto currencies (i.e. replacing gold holdings), the government will have HUGE pressure on them to treat it the same as ALL other holdings that wall street puts clients in. In other words, don't fall for the scare tactics some may suggest that good ol' Uncle Sam is going to tax your crypto at 80%. It just aint gonna happen. Keep it real. Who do you think pays those politicians to get into and stay in office, in the first place? Wall Street and Pension plans still have major influence over US laws and tax code changes.
If some governments try to do a cash grab on crypto currencies, then they will actually see one of the benefits of crypto (at least most crypto's like bitcoin) and people will move money/assets digitally between countries and even pull it off exchanges/networks that those countries monitor or enforce disclosure. Put simply, many people can put their crypto's in hard wallets and exchange anonymously outside the US regulated exchanges. I can buy my starbucks coffee from my hard wallet and nobody knows who made that purchase. Corporations will hold HUGE holdings in offshore crypto accounts to avoid unfair government taxes just like the games they currently play when one country gets too greedy on their corp tax rates.
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