IRS hunts BTC user identities. : Nominated Post

[milwaukee mike]

Originally <a href='https://www.sportsbookreview.com/forum/showthread.php?p=27304388'>posted</a> on 10/26/2017:

I've been preaching "Fear the IRS" my entire time at SBR, but people people prefer to stick their heads in the sand:

1. Coinbase is literally the WORST exchange on earth to leave records at, as it's the direct defendant in the IRS' lawsuit.

2. The $20,000 so-called exemption is just a choice made by the AUSA. It's a common prosecutors' tool called sampling. As soon as the large accounts are shown to be not paying taxes on their crypto profits -- and they will be -- the prosecutors will simply return to the federal court and say basically, "Wow, tons of tax cheats. Turns out we're going to need every record for every transaction for all your clients for every year."

Then they'll distribute your tax bill, plus 18% interest, plus a late payment penalty, plus you'll forever be moved into the high risk tax returners files which will raise your chances of future audits by 20,000% -- that's NOT a misprint.

3. Crypto isn't considered a security for tax purposes. It's considered property, which means you can only write off $3,000 in losses per year against your gains: the rest of the losses get rolled forward. So, if, say, you made trades this year that netted you $5,000 in profits and trades that netted you $5,000 in losses, you might think you owe no taxes because you "broke even." You'd be wrong: you owe capital gains tax (probably 15%) on $2,000, plus the same penalties as above: 18% interest from the date owed, plus penalties, plus you'll be permanently placed in the high risk tax returners file, which will raise your chances of being audited in the future by + 20,000%.

4. As that article mentions, Chainalysis is to be feared. They're former privacy minded BTC people who sold out to the dark side for a huge amount of tax payers' money. I've previously called them "soulless scumbags" and "sleazy sellouts": https://www.sportsbookreview.com/for...l#post27208010

I stand behind that assessment.

If anyone's interested in how to avoid all this, pm me, as SBR frowns upon some of the things necessary to keep yourself safe.

#3 is totally wrong, you net out all capital gains/losses on schedule D... if there is a NET LOSS, then that is limited to $3000/year and the rest carries forward to future years, to be used against future gains or keep taking the $3000/year loss