| PLO NW MN - 3/6/2024 08:40
Lost in all of this is the tax implications. If bought $5,000 of crypto and it gains value to $25,000 and I spend $15,000 in crypto without going back to a fiat currency(USD or whatever) how and when does that gain get taxed? Not that much crypto is actually being spent as currency without getting first converted to fiat.
I believe there were bills being put forward to tax unrealized gains in stocks or other investments that don’t get sold. I don’t see that happening.
Selling crypto is the same as spending it from a tax perspective. If you hold it for more than a year it is capital gains less than a year it is taxed as regular income.
so far example. Lets say you buy $5000 worth of bitcoin and hold it for 1 year. It goes to $25,000 in value. You spend 15k of it. 12k of it would be capital gains not 15k since the original investment is calculated in ( I think this part I'm a little fuzzy on the exact number but the concept is the same so someone can correct me.
Assuming you are in the tax bracket that is 15% for capital gains you would pay $1800 in taxes. 12,000x.15=1800
So lets say you held bitcoin for 6 months. You buy 10k worth and it goes to 100k. You make a purchase with or sell all 100k. That is 90k in profits. Suppose your tax bracket is 32% 90,000x.32= $28,800 in taxes
This is why I hold bitcoin long term. Crypto currencies are basically garbage scams outside if bitcoin and likely to crash long term. I know the price of bitcoin is going higher over the years. I do not know what it is going to do over the course of days weeks or months. Might as well pay 15% instead of 30% |
Bitcoin
