Stop in for a cup of coffee
Oh I know I had to declare last years. PIA through paypal getting the 1099 to print right.
Current law is you pay taxes on crypto if you make more than 600 in REALIZED gains. So for example , you put 100 bucks in, it goes to 750. You sell that crypto and cash out to USD, you pay anywhere from 15 percent to 27 percent in taxes on that 650 dollar net.
the new bill they’re debating is taxing unrealized gains.
so using the same example, 100 bucks turning into 750 dollar value, but you don’t sell it this time. You’re holding it in crypto still. At the end of the year, they want to tax you at a proposed 32 percent on the OVERALL value of your crypto account, not just the 650 you gained but haven’t realized.
Then according the cnn, they have it written into the current version of that bill, that if your account value drops AFTER you pay the taxes, you can only write off a loss if the original principal amount you invested drops, so basically if you pay the 32 percent on 750 bucks, and then it goes belly up, but it drops to value of 101, you can’t claim the losses despite having Paid the taxes on the 750 value. However, if it drops to say 95 bucks, you can only claim the loss amount from the original principal, or in this case 5 bucks.
confusing ain’t it? Typical of any law these days haha.