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When you trade 1 cryptocurrency for another, such as trading Bitcoin for Monero, do you:
A) calculate capital gains and losses based off the USD value at the time of the trade?
B) Calculate whether the trade when converted to USD was a capital gain or loss at the end of the year regardless of whether you are withdrawing the cryptocurrency or not? C) Calculate net capitcal gain/loss ONLY when you convert the cryptocurrency balance to USD
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When you collect dividends from a cryptocurrency in the FORM of a cryptocurrency (Such as collecting GAS from holding NEO), do you need to claim the value of the gas at the year end? Or only when you cash it out for USD?
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When you margin fund cryptocurrency (such as BTC at an APR of 5%) to gain MORE of the same cryptocurrency, is the interest gained treated as regular income or capital gains?
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Example covering many areas: Suppose I purchase 1 BTC in 2017 for 1000 USD. When I purchase this cryptocurrency, I am charged a 4% purchase fee, and lets assume 0.1% for transferring it to wallets, leaving me with 0.959 BTC. Using this 0.959 BTC, I spend 0.059 BTC on an amazon gift card of value 59 USD, put 0.1 BTC on lending using margin funding on Bitfinex at a rate of 10% ARR, and spend 0.8 BTC to purchase 1000 NEO. The NEO in the NEO wallet passively generates GAS, which has reached 200 GAS by the end of the year. At the end of the year, I am left with 0.11 BTC (value 20,000 USD/BTC), 1000 NEO (50 USD/NEO) and 200 GAS (30 USD/GAS). I convert 20 NEO to 1000 USD, 100 GAS to 3000 USD and 0.01 BTC to 200 USD which I deposit into my bank account. What would the appropriate tax calculation be to include this in my 2017-2018 return, and what documentation / format would be required in the event of an audit?
Submitted December 08, 2017 at 09:36AM by SloppyMoses http://ift.tt/2BhyMQq
