Bitcoins/Litecoins/Virtual Currencies

Arden · Apr 10, 2021

Keystone said:
I think usually what seems to happen with coinbase is a huge run up before and then they dump on actual listing. May be mis remembering though.

You might be right. I haven't parsed out how Coinbase listings affect coins. I believe there will be a huge runup until it's listed, but I'd be surprised if there was more than a slightly larger than normal selloff after it lists. I suspect VET is just going to keep increasing tbh.

Put it like this, I might not buy the day before it gets listed, but I feel like the people buying now will only benefit from a coinbase listing.

Threelions · Apr 10, 2021

Arden said:
You might be right. I haven't parsed out how Coinbase listings affect coins. I believe there will be a huge runup until it's listed, but I'd be surprised if there was more than a slightly larger than normal selloff after it lists. I suspect VET is just going to keep increasing tbh.

Put it like this, I might not buy the day before it gets listed, but I feel like the people buying now will only benefit from a coinbase listing.

This has happened to a few coins for sure, pumping after the list on Coinbase with a subsequent dump at the ATH. Usually recovers well though

Haus · Apr 10, 2021

Arden said:
You might be right. I haven't parsed out how Coinbase listings affect coins. I believe there will be a huge runup until it's listed, but I'd be surprised if there was more than a slightly larger than normal selloff after it lists. I suspect VET is just going to keep increasing tbh.

Put it like this, I might not buy the day before it gets listed, but I feel like the people buying now will only benefit from a coinbase listing.

Well.... Coinbase made ADA available on March 19th.. so.. let's roll that beautiful bean footage!

Jackie Treehorn · Apr 10, 2021

Regarding capital gains, newbie question.

Obviously if you buy coin X for ten dollars a coin, then sell it for 20 dollars a coin, you pay taxes.

However I’ve seen people mentioning if you want to go into cash to, say, sell at the peak of a cycle, you instead exchange for a stablecoin like DAI which is pegged to the dollar. That way you “cash out” but you don’t have to pay taxes because you didn’t technically sell anything, you exchanged one coin for another.

Am I totally misunderstanding why people say they exchange to DAI, or is that the idea?

Arden · Apr 10, 2021

Haus said:
Well.... Coinbase made ADA available on March 19th.. so.. let's roll that beautiful bean footage!

View attachment 347397

Yeah, looking at that chart there's obviously a huge spike ~3 days prior to the listing, then a sell-off right BEFORE the listing (which is interesting), then a small spike after listing (expected), then another gradual sell-off (also expected). That's interesting- thanks for posting.

If VET follows that pattern, the only way you lose it to buy literally the day before the listing at the peak. Those who bought more than 3 days before the listing came out ahead, even after the post-listing sell-off evened out. Makes sense.

I think VET is a different animal from ADA either way tbh. I think VET might follow a similar pattern but then keep rising after the post-listing sell-off evens out, rather than stagnating like ADA. All you need to do is look at the difference between the VET chart and the ADA chart at 1 month and 6 months to see why.

Fadaar · Apr 10, 2021

Jackie Treehorn said:
Funny enough I thought of that when I took the CZ out yesterday. The light is still bright but that’s definitely a year plus old battery.

I know this isn't the right thread but the good thing about that Streamlight is you can give the front a quarter turn to unseat the contact from the battery so unless the battery itself shits it won't drain. At least I'm assuming it's built the same way mine is (diff model).

Flobee · Apr 10, 2021

Jackie Treehorn said:
Regarding capital gains, newbie question.

Obviously if you buy coin X for ten dollars a coin, then sell it for 20 dollars a coin, you pay taxes.

However I’ve seen people mentioning if you want to go into cash to, say, sell at the peak of a cycle, you instead exchange for a stablecoin like DAI which is pegged to the dollar. That way you “cash out” but you don’t have to pay taxes because you didn’t technically sell anything, you exchanged one coin for another.

Am I totally misunderstanding why people say they exchange to DAI, or is that the idea?

Any trade is considered a sale and as such invokes a capital gain. Stable coins don't get you out of this from a legal standpoint. Even trading ETH for an altcoin on Uniswap counts as a sale and a capital gain.

Taxes were annoying this year

Arden · Apr 10, 2021

Flobee said:
Any trade is considered a sale and as such invokes a capital gain. Stable coins don't get you out of this from a legal standpoint. Even trading ETH for an altcoin on Uniswap counts as a sale and a capital gain.

Taxes were annoying this year

This is my understanding of it from a few articles I've read. It's pretty awful tbh. But if you are just swapping coins for a wash (no gain) then no tax. And if you sell for a loss I'm guessing you can write that loss off like you would a stock. Flobee correct me if I'm wrong.

Jackie Treehorn · Apr 10, 2021

So the idea being the stablecoin is $1. Since you exchange, say, $45,000 in ETH for $45,000 in a $1 stablecoin, the rise in ETH from when you bought the ETH originally at that moment gets taxed?

Arden · Apr 10, 2021

Jackie Treehorn said:
So the idea being the stablecoin is $1. Since you exchange, say, $45,000 in ETH for $45,000 in a $1 stablecoin, the rise in ETH from when you bought the ETH originally at that moment gets taxed?

My understanding is if you bought the ETH for 35k and then you convert the ETH to stablecoin when the ETH is worth 45k, you'd have to pay taxes on the 10k you "gained."

But definitely don't take my word for it.

Jackie Treehorn · Apr 10, 2021

Fadaar said:
I know this isn't the right thread but the good thing about that Streamlight is you can give the front a quarter turn to unseat the contact from the battery so unless the battery itself shits it won't drain. At least I'm assuming it's built the same way mine is (diff model).

That’s good to know!

Flobee · Apr 10, 2021

You guys got it. Any price appreciation or depreciation from the initial purchase is taxable. Into a stable coin, cash, or even just another coin.

Omayga · Apr 10, 2021

profites from sale of crypto also seems to be taxed at your effective tax rate, there doesnt look to be a “long term capital gains rate” for crypto, so the bite from Uncle Sam is significant

Jackie Treehorn · Apr 10, 2021

Flobee said:
You guys got it. Any price appreciation or depreciation from the initial purchase is taxable. Into a stable coin, cash, or even just another coin.

Interesting. Maybe for some other countries it doesn’t work that way perhaps. Or why else would some people mention when they want to get out exchanging to stablecoin vs just cash? Is there any advantage to that?

Tmac · Apr 10, 2021

Arden said:
My understanding is if you bought the ETH for 35k and then you convert the ETH to stablecoin when the ETH is worth 45k, you'd have to pay taxes on the 10k you "gained."

But definitely don't take my word for it.

That doesn’t make any sense.

Look into a “tax free exchange”. They exist to avoid taxes on an exchange of assets. People do it with land all the time.

Crypto, I imagine, would be no different.

Tmac · Apr 10, 2021

Flobee said:
You guys got it. Any price appreciation or depreciation from the initial purchase is taxable. Into a stable coin, cash, or even just another coin.

Depending on the asset there’s a bunch of different ways to determine the “basis”. It isn’t always 100% appreciation from the time you bought it. It depends. Consult an accountant.

My family just sold a cellular tower w zero capital gains using the proper basis and language in the deal.

Also don’t trust that accountant. Do research beforehand and make your accountant aware of all your options. I guarantee the run-of-the-mill accountant isn’t aware of most the tax reduction strategies available.

Rajaah · Apr 11, 2021

Jackie Treehorn said:
Regarding capital gains, newbie question.

Obviously if you buy coin X for ten dollars a coin, then sell it for 20 dollars a coin, you pay taxes.

However I’ve seen people mentioning if you want to go into cash to, say, sell at the peak of a cycle, you instead exchange for a stablecoin like DAI which is pegged to the dollar. That way you “cash out” but you don’t have to pay taxes because you didn’t technically sell anything, you exchanged one coin for another.

Am I totally misunderstanding why people say they exchange to DAI, or is that the idea?

I've been exchanging instead of buying/selling primarily to avoid Coinbase's fees (plus it's more fun). It works well for that purpose. As far as tax dodging goes...I don't know. If I sell a crypto for $2000 and then buy it back later on a dip, I no longer have that money so it probably shouldn't be taxable right? Like only things I cash out and take the "income" are things I need to worry about? In a fair world that'd be the case, but judging from your question I feel like it isn't the case.

Which brings me to the next thing: Uh, I need to go do the research on how all of this affects taxes, 'cause there's gonna come a point where I'm gonna have to pay up. Since I started doing stocks/cryptos in late January, I haven't really sold much, almost entirely buys and trades. The amount of actual sales I've made where I sold something and kept the money rather than turning around and re-investing it is probably under a thousand total.

Tmac · Apr 11, 2021

Rajaah said:
I've been exchanging instead of buying/selling primarily to avoid Coinbase's fees (plus it's more fun). It works well for that purpose. As far as tax dodging goes...I don't know. If I sell a crypto for $2000 and then buy it back later on a dip, I no longer have that money so it probably shouldn't be taxable right?

Wrong.

If you’re selling out for cash at a gain it’s taxable. 15% federal and probably 10% depending on your state. So, potentially 25% of what you make on the gain is taxed.

If you’re not taking this into account when you trade you’re probably fucked.

When I was trading frequently I had an excel sheet that included what my capital gains tax would be so I knew if it was worth trading.

Tmac · Apr 11, 2021

Obviously talk to your accountant. I’m not an expert. Any examples I give are from experience or conversations w my own accountant(s).

Rajaah · Apr 11, 2021

Tmac said:
Wrong.

If you’re selling out for cash at a gain it’s taxable. 15% federal and probably 10% depending on your state. So, potentially 25% of what you make on the gain is taxed.

If you’re not taking this into account when you trade you’re probably fucked.

When I was trading frequently I had an excel sheet that included what my capital gains tax would be so I knew if it was worth trading.

Yeah, that figures. I've kept track of my trades, luckily. So I can get a calculator and go run the numbers once I figure all of this out.

It's gonna be a massive pain in the ass, yes.

Right now I'm moving a bunch of BTC to Eth. Gonna stick to that rather than selling until I work everything out.

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Bitcoins/Litecoins/Virtual Currencies

Arden

Blackwing Lair Raider

Threelions

Victory Through Harmony

Haus

Jackie Treehorn

Arden

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Fadaar

That guy

Flobee

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Arden

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Arden

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Jackie Treehorn

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