Making SENSE Of Your Bitcoin TAXES!! (US Specific – July 2017)



hey everyone today I wanted to talk about a topic that a lot of y'all have been asking about lately and so I decided to do some research for you about taxes on your big coins and other coins and this is particularly um for US citizens and as of July 2017 so things might change definitely do your own research to confirm everything I say so the most important thing is to determine what coins are even considered and IRS put out a notice saying that big coins and other similar coins are to be considered property not currency and so that means when you exchange property you might have capital income I need to calculate capital gains another thing to note is that there are three important moments you need to consider and that is acquiring the coins I'm holding the coins and disposing of the coins and we'll dive into this a little bit more shortly so because it's property there's a lot of things that are taxable events for things that you might do with coins the only thing that's not taxable is if you just buy and hold throughout the year so when you sell it for currency like US Dollars you can trade it by goods and services donate mined receive a salary and coins or have them stolen those are all taxable events so capital gains how to calculate them so the first thing to do is determine cost basis and that's basically what you bought them for and you can do that on the date is received or bought and basically you have to do it in a reasonable and consistent manner so you can take the day's high-priced days low price average price etc but just basically it has to be applied consistently across the board another thing is that you can consider exchange fees and in calculation so that might be more beneficial said you can say I bought it for more and sold it for less and get a better calculation your taxes so basically capital gains is profit that you make after selling or exchanging these coins um but something to consider is that there's different Lots and what those what that means is that when you buy coins they can be grouped into different sets that you buy at different prices and on different days and so how do you identify which one you're actually selling or using um well there's a few different ways but you just have to be consistent once again so there's like first-in first-out like the one that you bought the long as it go is the first one you you spend or use and/or lastin first-out which is the one you acquired most recently is the one that you sell um the first or specifically identify which lot many different ways you have to be consistent with your accounting also for capital gains long term if you hold more than a year you get better tax rates short term you're usually taxed with ordinary income so it depends on what your federal income tax bracket is that that's what you attached texture short-term gain debt but you can also consider capital losses which can reduce your overall taxes if you sold or spent coins for less than what you got them for so how you do this is pretty simple you combine your gains and losses and you might get a net loss but yet to do it for long term and short term gains separately if you have a met loss you can use it to reduce your income up to three thousand a year anything more has to be carried to the next year so one thing that's kind of unintuitive is crypto – crypto chain exchanges so like if you use Bitcoin and trade it for like Co coins for example um that's a crypt under crypto exchange and so people are wondering if you can do like kind exchanges which means you pass along the cost basis and just wait until later to calculate taxes once you like sell it for USD for example but people are saying they're unsure if like kind rules apply and it's better to be safe and Summa doesn't apply but if we do assume it applies be sure to recalculate the IRS puts out new rules if it's not light kind then you can consider an exchange like selling the first coin for US dollars and then bind coin number two with the same amount of US dollars so that makes it a taxable event because you have to calculate gains or losses at the point of time of selling spending money also counts though so even buying a cup of coffee tax is taxable since this is considered property and not currency and so if you bought a five-dollar cup of coffee with a coin that you bought for 10 cents then you'll have to pay capital gains on tax cup of coffee so definitely you need to be keeping track of all spinning events some companies have even started paying people coins a salary in that case you need to also determine your cost basis which is defined as the fair value of goods or services for example if you um if you select that you want to get 10% of your $2,000 monthly salary as bitcoins then your cost basis would be 200 at that given date and time or if you can't get the fair value that way then market value works too so like what's going on at certain exchanges on that day Mining coins also counts can be considered income so definitely record the fair value on the day you receive them but what about for all coins that don't have a exchange rate on any given day so what you can do there is convert it to Bitcoin and then two US dollars um so there are many tax forms you need to take note of when it's happening fill out your forms and it's a little bit difficult because exchanges don't provide you with a 1099 form which kind of tells you um does all the math for you as far as I know most of them did not do this so you'll have to fill out a Schedule D form 1040 for capital gains and losses and fill out details and form 8949 and you'll need input all the details like the date that cost proceeds gain and loss etc so keep really careful records and so some resources that are good that I use to create this presentation and that you should do on later come tax season is Google for the most recent information rules like this may change at a moment's notice investopedia has a good article on this Bitcoin tax have some good resources it also does a lot of the accounting for you if you connect popular exchanges to their service or you can just hire a CPA or tax attorney because this stuff is complicated and you don't want to get audited later so I hope this was useful if you have any questions please comment below and definitely click here to subscribe and stay tuned for more coming very soon

44 thoughts on “Making SENSE Of Your Bitcoin TAXES!! (US Specific – July 2017)”

  1. Hey folks, I hope you enjoyed this video! Please be sure to CLICK SUBSCRIBE and also join the sister Facebook group here: https://www.facebook.com/groups/254527885037034/

    I'm trying to build a large community where everyone can learn about cryptocurrency and enter the broader crypto community as an informed and responsible member!

  2. Feel free to contact my team for further information or questions: https://www.camusocpa.com/the-definitive-guide-for-cryptocurrency-taxation/

  3. whenever an average person finds a way to make some extra money or when they want to better they're life the government steps in so they can stop it from happening . the fact they cant regulate it they need another way to take from us…like taxes. we are double and triple taxed time and time again .im so sick of it . they take and take

  4. easy. outta 180000 miners only 46 ppl actually included cryptocurrancy in there tax form… so.. if the cant track it or prove you owned anything.

    so the answer is simple for canada no proof it didnt happen. try mining there own… lol

  5. Buy a private coin like BCN take it out of the exchange send it to a hardwallet, and claim it lost in transactions or report your ledger or trezor stolen.

  6. Shoot yourself in the foot. If it says currency and some fool doesn't recognize it as that, but as property, so he can charge you a % based on assumed random figures as long as you shoot yourself in the foot. Than the responsibility is not of the person with no foot but who told him to do so.

  7. the reports gdax has made available are currently severely lacking, because they don't include the current dollar value for BTC/other gains. They only show profits in coin and profits in USD.

  8. Hi can someone help? I have some BTC buy/sells but the network i use doesnt provide the USD price at the time of the transaction? How should i report the bitcoin price at certain timepoints? I.e. average per day? Rough price at that hour?

  9. The IRS is an extortion Agency. Take 47% of my yearly bonus and they want a piece of my own investment? Fuck out of here, I need to learn how to tell the IRS to kiss my ass not learn how to let them extort me some more. The US government has engaged in treason by allowing a foreign private agency to extort the American people. The federal reserve and the IRS are unconstitutional to begin with, I don't understand how we the American people aloud this crooks to get this far.

  10. Definition of COMPLIANCE: A confirmation that a manufacturere can do what they say they can according to the rules and standards required by a contract. <——- do you see the world contract? When you sign your 1040 that is a contract. Do you get it now? Did you also see the word REQUIRED? Without your compliance there is not CONTRACT.

  11. Hence no contract was signed going into the crypto world and therefore it does not fall under commercial jurisdiction and falls under the constitution.
    You need to do your homework son. It is called the UCC for your information. 2. show me the law not the statues under the UCC
    You have been trained not educated. by design if I may add
    Anything you sign or give consent to is considered a contract, by commercial law ( THE UCC )you then fall under commercial jurisdiction and signed a contract to obtain the PRIVILEGES under the contract. and gave up your constitutional rights for those Privileges under the contract and its statues. The floor is open for discussion. Read your constitution, It is known as the supreme law of the land!

    Article VI
    All debts contracted and engagements entered into, before the adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.

    This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.

    The Senators and Representatives before mentioned, and the members of the several state legislatures, and all executive and judicial officers, both of the United States and of the several states, shall be bound by oath or affirmation, to support this Constitution; but no religious test shall ever be required as a qualification to any office or public trust under the United States.

    Property taxes are voluntary under the constitution, if you contract to get a loan for property, car house land etc you no longer have constitutional rights. I used silver and gold to purchase my cryptos not commercial fiat Federal Reserve Notes. Also known as a loan, that is why they call it a NOTE

  12. According to this CPA (also a former IRS-CID agent): most CPA's are clueless to the law's actual contents and cost their clients a fortune in tax overpayments! Find out why at: http://FreedomAboveFortune.com

  13. I think the truth is the Feds have not really figured out what to do yet.  They are as clueless as the Bitcoin founders were about things at 1st.  They were dreaming things up and didn't really know exactly how things were going to work.  I'm going to consult a couple accountants before I get too far into this stuff.  May have to form an LLC to avoid being overtaxed.

  14. Wait a second, there is sales tax when you buy a cup of Coffee.  Are you saying we have to report to the IRS all our purchases and volunteer for more taxes?  That's a little crazy.  Haven't been doing that with Fiat Currency so why with Crypto?

  15. I don't get this. because I don't buy equal amount of coins. What if I buy .3493473 then .938479234 and then sell it at 1 coin? Like I don't really know what to report

  16. I'm scared to make money, imagine making a million dollars on bitcoin only to find out you're going to jail???

  17. so what about if your just keep reinvesting in bitcoin  as don't pull but a lil bit out at the end of the year?

  18. fuck all this man…the federal government can't keep track of the money they issue, much less crypto cash that is very difficult to trace…especially when its being bought and sold is CASH! Lots of people are doing that.  No one is filling out a 1099 every time they buy a cup of coffee. GTFO man!

  19. Is this fool telling people how to pay taxes on something that doesnt exist as a physical asset. You idiot

  20. By law (backed by U.S. Treasury) Bitcoin is to be considered same as cash, and therefore, can't be considered property so the IRS might wanna do their own research. They must accept it if they want to tax it!

  21. if you openly tell the IRS you bought bitcoin…STANDBY FOR YEARS OF RANDOM AUDITS…….DONT TELL IRS CRAP

  22. Can't tax bitcoin.

    That double taxation cause the network miners tax you to do your LEDGER to authenticate the transaction.

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