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206 sats \ 3 replies \ @elvismercury 27 Dec
I listened to this last week and I still don't really understand who this is for, esp wrt point #2.
Is the idea that if you've been moving btc into and out of exchanges, then they'll compute some weird cost basis? So if you bought on Kraken a few years ago at $62k, and moved them onto Coinbase recently at 53k, then Coinbase wouldn't know how to assign a cost basis and would do something weird?
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313 sats \ 2 replies \ @freetx 27 Dec
Its a badly presented topic, they made it far too confusing. The take-away is: Cost-basis on "crypto reporting" is now going to be computed like every other asset.
I think the reason why this is causing such a stir, is that evidently many crypto/bitcoin tax filers have been using some web-based reporting software that applied some type of "universal cost basis" (which is now going away).
The "safe harbor period" is basically saying that you need to organize your holdings and document your cost basis on each holding.
I suspect for bitcoin-only types this is going to be minimal amount of work.....for degen crypto traders, well they will now see the tax impact of their constant "trading".
IMO, this is all pretty much a nothing burger.
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108 sats \ 1 reply \ @028559d218 OP 19h
The whole issue imo is overly confusing and needs major reform. Every zap, every sat sent and received on Stacker News (or Nostr or anywhere else) has to be tracked in terms of fees, price of 'acquisition' and price at 'transfer'.
Get zapped 10 sats? Record the exchange rate when you receive them.
Zap someone 5 sats back? Record the new price at the time of zapping - everything documented and reported etc. This would be required for millions of people for every single zap 24/7 365.
Eventually when Bitcoin is a massive medium of exchange on Lightning every single cup of coffee, every single candy bar will have to be tracked for tax reporting purposes... every single transaction no matter how small will have to be recorded and reported by the user. Even from small fluctuations in daily exchange rate.
Most 'normie' people don't have the time, ability, or inclination to calculate their 'capital gains' (however small) on the burrito they just ate... so I'm not sure how that will play out with future mass adoption. Maybe the wallet software can do it for them... combining zapping, Nostr tips, pay from an employer, and every single daily purchase they make (gas groceries food auto repairs subscriptions everything) into one neat app to forward to government for tracking.
It would kind of be like a Bitcoin CBDC then LOL
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161 sats \ 0 replies \ @elvismercury 18h
Yeah the rules to do it the "right way" officially are absolutely bonkers. There's no way you can spend btc anywhere other than a one-off, and track all this shit. I think there's no shot of anything other than SoV adoption so long as this is the case.
The only possibility I can realistically imagine is that so many important people develop large bags that they pivot tax policy to highly up-regulate sales tax or something. Seems unlikely, but I can't come up with another plausible scenario where you could use it as money.
Well, I guess a broader social collapse is also plausible, but at that point the lack of tax burden will be the least of our concerns.
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27 sats \ 1 reply \ @OT 27 Dec
Nice to see Andreas pop up every now and then with a bit of wisdom.
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0 sats \ 0 replies \ @028559d218 OP 19h
This is an interesting video alright
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108 sats \ 0 replies \ @Signal312 27 Dec
It's an hour and a half. Here's a summary from the description:
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The most important takeaways are that you have an opportunity, now, to reset cost basis, which may seriously impact your future tax bills, and to protect your previous years reporting, but you HAVE TO take action now.
There are five steps most people should take. You'll need to listen to the whole interview, do a bit more research, and talk to your tax advisor, but here are the basic steps to get you started.
Step 1: Consolidate your assets: the goal is to reduce the number of wallets you have for each asset type to a reasonable number. If tax were your only consideration, then the ideal number is one asset / one wallet. However, given security and other issues, one to one isn't necessarily realistic. Review what you have, consolidate where you can, in the context of what makes sense for you.
Step 2: In the process of consolidation, remove all assets from centralized exchanges. This is to allow "cost basis cleansing". You can move them back later (after January 1, 2025) if you want. The reason to do this is because unless you have only ever used one exchange, kept your assets there, and never moved them elsewhere, after 2025 the exchange will likely report an incorrect cost basis.
Step 3: Simplify, ideally into pure assets. The more fringe things you're doing, like staking, the more challenging from a tax perspective things will be for you moving forward. If you don't really understand the tax implications, you may want to simplify for now. Spend a bit of 2025 learning about tax and then jump back in when you're ready for the recordkeeping necessary to keep your tax situation clean.
Step 4: Download a report showing your tax basis for your assets, correct errors as needed. Write a memo to document any weirdness. Save the file(s) with some reference to 2024 IRS Safeharbor in the name.
Step 5: Use opentimestamps.org to timestamp your correct report and memo, which will provide proof of your personal declaration when the time comes.
In this interview, Kirk and Andreas then discuss a number of questions from Andreas' patrons including:
0:00:00 History of traditional finance and tax gaps along with an overview of the issues.
1:13:00 What are the consequences of not doing anything?
1:17:00 What exactly is a wallet for purposes of the safeharbor?
1:22:00 What software adapts best for this use? Kirk's links to crypto-tax software: www.cryptobullseye.zone/crypto-tax-software-store
1:24:00 What should we look out for?
1:27:00 I've used coinjoin etc and only purchased, never sold, do I need to do something? (yes)
1:30 Specific lots would be useful for me, I've only purchased on Coinbase, do I need to do something? (yes)
1:32:00 I've got shared cold storage, is this an issue? (YES, fix it now in the safeharbor)
1:37:00 Summary
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