Tax implications of spending your Bitcoin.
- Thread starter deaddog
- Start date
You do. Taxes are a privilege and a responsibility.
BTC is pseudo-nonymous not anonymous. Depending on how you acquired your BTC; either via a exchange on-ramp with KYC or cash at an ATM would determine your intent and the required steps to take. The fact that you have this question makes it prudent for you to file.
There are products that keep track like coinmarketman.com, cointracker.io, zenledger etc
Believe it or not some people don't fell that way.
So bitcoin can and probably will be a tax haven.
Someone mentioned that Satoshi Nakamoto has billions worth of bitcoin (created out of nothing) yet no one knows who he is. How is any government going to tax that?
On your tax return you'll be asked about "crypto transactions", so you'll be at risk from the IRS if you don't declare.
I realize that, I'll have to look to see the the Canadian form asks.
I just wonder how easy/difficult it is to track.
Also if one has been using their bitcoin to buy breakfast at starbucks each morning how much paperwork is involved it declaring your gains and losses as the price fluctuates.
Baron
ET Founder
Why would just sell BTC to buy something when you could just borrow that same amount via a personal loan, home equity loan, business loan, etc. at a much lower APR rate than what BTC is going up at on a yearly basis? The money would be tax-free because it's a loan and you get to keep your appreciating asset at the same time. It's a win-win! 
I don't try to guess why people do shit. I just wondered about the tax implications.Why would just sell BTC to buy something when you could just borrow that same amount via a personal loan, home equity loan, business loan, etc. at a much lower APR rate than what BTC is going up at on a yearly basis? The money would be tax-free because it's a loan and you get to keep your appreciating asset at the same time. It's a win-win!
Merchants wouldn't offer to take crypto to pay for stuff if there wasn't a demand. How does someone who pays for goods or service in bitcoin account for it? Someone is selling their bitcoin and having problems finding a willing buyer, which is causing the price to drop.
I'm just curious if anyone (read IRS or any government) can figure out who.
Baron
ET Founder
Well, you as the taxpayer are obviously responsible for tracking all that, but these days pretty much any of the major crypto exchanges let you download your transaction history and then you can upload it to a service like https://cryptotrader.tax and they will calculate all of your capital gains for you.