Trump Promises To Make USA The "Bitcoin Super-Power Of The World"

[TheTexan]

It's not a tax increase.. nobody is paying more in taxes over the longrun unless they are trading crypto with big gains in less than a year for other crypto, and having to push it into short term gains when it would have been long term had they been able to delay the tax until they converted it to fiat.

You can't erase a tax increase by saying "unless they do not participate in the activities being taxed".

It's still a tax increase.

 

[dannno]

You can't erase a tax increase by saying "unless they do not participate in the activities being taxed".

It's still a tax increase.

It is NOT a tax increase on the taxable amount, it MIGHT be a tax increase on the percentage taxed, from long term to short term capital gains depending on the situation.

 

[TheTexan]

It is NOT a tax increase on the taxable amount, it MIGHT be a tax increase on the percentage taxed, from long term to short term capital gains depending on the situation.

Previously the intra-crypto trading tax was 0. Now it's not.

Tax increase.

 

[dannno]

Previously the intra-crypto trading tax was 0. Now it's not.

Tax increase.

No, you are wrong.

The taxable amount will always be the same. The only change was when you had to pay it.

If you bought bitcoin for $1,000 then when it went to $20,000 a few years later you bought some ethereum, that was not a taxable event prior to the new rules. However, you still had to calculate that into your cost basis when you sold the ethereum for fiat, so you would get taxed on all those gains at that point, when you converted to fiat.

Under the new rules, you get taxed on the bitcoin gains when you buy the ethereum, but when you sell the ethereum for fiat 2 years later, you DON'T have to calculate the bitcoin gains into the cost-basis of the ethereum. So your taxable amount would be much lower at that point.

The taxable amount comes out to the exact same amount to the penny under both scenarios.

The only difference is whether you pay a higher percentage or a lower percentage if you sell for gains within a year of purchase. So in that instance, it is a tax increase. But it is not an automatic tax increase for every person who trades alt coins on exchanges.

 

[dannno]

Previously the intra-crypto trading tax was 0. Now it's not.

Tax increase.

I will give you this -

IF Trump gets rid of capital gains tax on all crypto, then people who paid taxes in the past on their trades would end up paying more taxes under the new rules because they already paid the taxes, when under the old rules they could have converted to fiat after the abolishment of the taxes and paid nothing. However there would be a net benefit in the longrun since the taxes are now abolished.

However, conversely, if Kamala had been elected and they raised the long term capital gains tax from 15% to 25%, then Trump's rules would have benefited many crypto holders (especially hodlers) who would have had the benefit of paying a 15% rate in the last 7 years on their gains, rather than paying the 25% rate when they converted all their gains to fiat under Kamala.

 

[TheTexan]

No, you are wrong.

The taxable amount will always be the same. The only change was when you had to pay it.

If you bought bitcoin for $1,000 then when it went to $20,000 a few years later you bought some ethereum, that was not a taxable event prior to the new rules. However, you still had to calculate that into your cost basis when you sold the ethereum for fiat, so you would get taxed on all those gains at that point, when you converted to fiat.

Under the new rules, you get taxed on the bitcoin gains when you buy the ethereum, but when you sell the ethereum for fiat 2 years later, you DON'T have to calculate the bitcoin gains into the cost-basis of the ethereum. So your taxable amount would be much lower at that point.

The taxable amount comes out to the exact same amount to the penny under both scenarios.

The only difference is whether you pay a higher percentage or a lower percentage if you sell for gains within a year of purchase. So in that instance, it is a tax increase. But it is not an automatic tax increase for every person who trades alt coins on exchanges.

"When" you get taxed is a huge consideration for anyone who actively trades.

Any day trader, or professional trader at all, will tell you that.

When each individual trade is taxed, it makes it very costly to make short term trades. Unless you're a professional day trader or have your assets in a 401k/IRA, the taxes have a compounding effect with each individual trade that gets taxed. Even if you outperform the market, you might still lose money based on the taxes you have to pay on each trade.

Indeed, the very fact that stocks operate under these rules, are the exact reason why I don't day trade my stocks. The tax considerations virtually prohibit me from doing so. And now crypto are under these same rules.

You can keep lying to yourself if you like, but this change was a tax increase.

 

[dannno]

"When" you get taxed is a huge consideration for anyone who actively trades.

Any day trader, or professional trader at all, will tell you that.

When each individual trade is taxed, it makes it very costly to make short term trades. Unless you're a professional day trader or have your assets in a 401k/IRA, the taxes have a compounding effect with each individual trade that gets taxed. Even if you outperform the market, you might still lose money based on the taxes you have to pay on each trade.

Indeed, the very fact that stocks operate under these rules, are the exact reason why I don't day trade my stocks. The tax considerations virtually prohibit me from doing so. And now crypto are under these same rules.

You can keep lying to yourself if you like, but this change was a tax increase.

I still don't think you quite understand..

If you make money day trading, you will not end up losing money from taxes. If you made 2,000 trades in a year, and you only make $5 after all that, you only get taxed on the $5 you made. You only get taxed on the gains. You can subtract the losses. Where you might lose money is if you don't make very much money daytrading and you have to spend more money than you made on an accountant to keep track of it all. If you pay an accountant $400 to keep track of it all, then you would have lost $395.. however I think you can deduct that expense from your gains, which means you might actually save money on taxes.. but of course you still lose money overall.

I do agree the changes make it difficult for people with small amounts of money in the market to want to daytrade because it becomes expensive and time consuming just to keep track of. However, you would still have to keep track of all that in order to pay the tax before the rules took place, because you would have to calculate your cost basis for everything you owned that ended up getting converted to fiat.

I also agreed some people will pay more in taxes because of the short vs longterm trading brackets.

What I really have an issue with is your initial statement, "Just a reminder, Trump is the one that passed a law that taxed crypto to begin with"

Crypto was always taxed, there was no new tax except that you had to pay on gains you made on individual trades, rather than paying all of that at the end. If you calculated the amount you had to pay under the examples I shared, it would be the exact same under both scenarios.

 

[TheTexan]

What I really have an issue with is your initial statement, "Just a reminder, Trump is the one that passed a law that taxed crypto to begin with"

I don't remember if it was a law or a ruling but either is effectively the same thing.

Crypto was always taxed, there was no new tax except that you had to pay on gains you made on individual trades, rather than paying all of that at the end. If you calculated the amount you had to pay under the examples I shared, it would be the exact same under both scenarios.

It's not clear in your example above when and where it gets converted to fiat, so I can't really say I agree that it would be the "exact same" under both scenarios. If in a tax year, prior to the change, your trades remained intra-crypto, there would be 0 taxes applied. After the change, there would be taxed applied. (e.g., a "tax increase")

This gets back to what I was talking about with the compounding effect. One of the benefits of IRA's, as any tax advisor will tell you, is that it's not taxed until you actually withdraw the money. You get tax-free compounded earnings until you do. Intra-crypto trading was like that, before the change. Now, obviously, it's not.

I also agreed some people will pay more in taxes because of the short vs longterm trading brackets.

Yes, because it's a tax increase.

Crypto was always taxed,

Crypto was always taxed when converting to fiat, sure, but that doesn't change the fact that taxing crypto-to-crypto is a new tax on top of that.

It is what it is.

 

[Matt Collins]

https://www.youtube.com/watch?v=wonot1cgmGA

 

[unknown]

 

[pmbug]

U.S. Treasury Secretary Scott Bessent spoiled the dreams of Bitcoiners worldwide Thursday, stating outright that the federal government will not be purchasing additional Bitcoin to supplement its existing supply of the cryptocurrency.

“We’re not going to be buying that,” Bessent said during a Thursday morning appearance on Fox Business.
...

https://finance.yahoo.com/news/us-not-purchasing-bitcoin-treasury-144840011.html