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Capital gains tax


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7 hours ago, dayvkaos said:

When the time comes for you to hit that  sell button, you will need to transfer that money to some bank account.

A couple of questions here:

When you transfer sold amount to your bank account, will this freeze your account due to the amount transferred ?

Why did it freeze? if so, is it contingent to IRS (or your government tax agency) review ?

When it comes time to sell, how do you prove to your government it is not capital gains (held over a year) that way you are charged the lesser amount for tax? (from my understanding capital gains differentiates. In some places it's investing longer than 12 months, and some places it's investing longer than 5 years).

It will not freeze your account or cause any problems at all. Although it is likely that the bank will issue an SAR: suspicious activity report. These are nothing to worry about and are simply required of the banks by law on any wire over 10,000. 

Concerning taxes, ensure you keep proof of every deposit or wire you made to a gateway or exchange. This way you can show that you owned it over a year. If you use a service like bitcoin.tax, which i highly rscommend, it does it all for you automatically. It even lets you choose your accounting method. Just download your records from each gateway and upload them to the site.

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SOOO many people tell me the same thing... and not just about crypto.  It's not fair that the voices in my head say weird things   

1 hour ago, mm421wsp said:

long time hodler here that cashed out large amount in December.  I am totally kicking myself for not waiting another 2 weeks but i had reached a target for initial selling and i did.  I just printed off transaction logs and gave them to my accountant to show that i had been hodling these assets for longer than a year.  So, it is reported as a long term gain.  Since i sold in 2017 and not 2018, i was hit with the alternative minimum tax (Trump plan has raised level to 1 million dollars as of 2018 before liability kicks in) as well as the net investment income tax.  these of course are added to fed and state.  In addition, you lose all your deductions and credits (child and such) when you have a large income.

Needless to say, it's painful.  But, as problems go, not a bad one to have.  

 

PS...am seriously considering the Puerto Rican thing for when we reach > $10

Regarding PR...it wont work for assets owned before establishing residence. you only avoid cap gains on assets purchased afyer you have legal residence there.

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44 minutes ago, Montoya said:

Regarding PR...it wont work for assets owned before establishing residence. you only avoid cap gains on assets purchased afyer you have legal residence there.

@Lucien I still need to do some homework on this.  I figure I'll start really putting in the research when we see XRP in production and we see pricing above $30.  For Puerto Rico I understand it that you'd pay 10% cap gains on assets purchased before the move (instead of the 20%) if I stayed in mainland USA.  I mentioned the 7 months earlier because the requirement is that you are a resident of PR for I believe 183 days.  I was planning on moving there when we have momentum above $100 and cash out most of my holdings in the $140 ish range.  Assuming XRP went from $100 up to ~$140 in about 6 months I'd probably move back before a year saving 7+ figures.  For my situation saving just the 10% on long-term gains for the majority of my holdings is definitely worth the move.  I haven't looked into schools for the kiddos but can't imagine they wouldn't have good private options.  

Edited by aavkk
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1 hour ago, xrpmeplease said:

And even if it is frozen, it will have nothing to do CRA...accounts usually only get frozen by CRA in a collections scenario (or if there' a criminal/tax evasion element)...

Correct, capital gains taxed at 50% of regular rate (applicable to wages, interest, etc.) at your bracket...top bracket over $200kish depending on province...professional beancounter here ;)

Question: You have any concerns about your bank accepting a transfer from an Exchange? I'm hearing/reading all kinds things from no problem to bank won't accept transfer and will shut down your account at the mere mention of crypto...I know Quadriga are having issues dealing with banks...

XD @xrpmeplease, i shouldve added a disclaimer that beancounter is intended as a term of endearment LOL

 

I personally havnt actually tried to transfer anything FROM an exchange TO my bank account.  When i tried to send funds to bitstamp initially it was blocked and I had to call the bank and advise them it was me initiating the xfer and once i did that, everything outgoing was smooth.  I have no idea what to expect if/when i ever transfer back though lol. 

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2 minutes ago, ieiaiel said:

Why ?

in my case it was because the bank was located overseas and id never done any kind of international transfer before of a large amount.  They thought it was suspicious.  Once i verified myself though and explained what i was doing i didnt have any more problems.

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2 minutes ago, TLG said:

They thought it was suspicious.

Yes, thank you, but that was your money, and you use it  as you like  to use....  they thought was someone else...... an hacker.. because they care about their customers, they love them.

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10 minutes ago, TLG said:

XD @xrpmeplease, i shouldve added a disclaimer that beancounter is intended as a term of endearment LOL

 

I personally havnt actually tried to transfer anything FROM an exchange TO my bank account.  When i tried to send funds to bitstamp initially it was blocked and I had to call the bank and advise them it was me initiating the xfer and once i did that, everything outgoing was smooth.  I have no idea what to expect if/when i ever transfer back though lol. 

hopefully we'll be able to access our riches when the time comes! lol...i'm not concerned at present cause I think its a long term hold to get to the promised land, and hopefully by then the landscape will have evolved to where its seamless, but it appears at present getting a Canadian bank to accept a transfer from an Exchange is hit and miss..i haven't looked into details but anecdotally there are issues...I know of a guy who tried to have $20K sent from Quadriga to his RBC account and they wouldn't accept...he then requested a cheque from Quadriga and 60 days later he received an envelope (regular mail) with $20k cash in it!!! Maybe the bigger foreign Exchanges will be better...

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2 minutes ago, xrpmeplease said:

hopefully we'll be able to access our riches when the time comes! lol...i'm not concerned at present cause I think its a long term hold to get to the promised land, and hopefully by then the landscape will have evolved to where its seamless, but it appears at present getting a Canadian bank to accept a transfer from an Exchange is hit and miss..i haven't looked into details but anecdotally there are issues...I know of a guy who tried to have $20K sent from Quadriga to his RBC account and they wouldn't accept...he then requested a cheque from Quadriga and 60 days later he received an envelope (regular mail) with $20k cash in it!!! Maybe the bigger foreign Exchanges will be better...

and envelope......seriously? wowwwwwwwwww

 

i mean, cool moment but thats just asking for a theft! lol

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1 minute ago, TLG said:

and envelope......seriously? wowwwwwwwwww

 

i mean, cool moment but thats just asking for a theft! lol

yeah that's not good, he was shocked...another guy I know sold substantial BTC through Coinbase, had fiat deposited in a US account and then transferred to his Canadian account and it all well quite smoothly apparently...anyways, it'll be a good problem to have to deal with when the time comes but it is a concern imo...

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Not sure if we would be able to pull off moving to Puerto Rico after I did some, look at this quote. 

"So, capital assets (such as land, stocks, bonds, etc.) acquired after moving to PR are tax free. As for property acquired prior to becoming a resident, special provisions can result in a 10% long term rate from the day you qualify and a 5% tax rate applies to property acquired prior to becoming a resident and held for at least 10 years thereafter. See details below."

http://premieroffshore.com/move-puerto-rico-pay-zero-capital-gains-tax/

Edited by Only-Invest-XRP
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1 minute ago, Only-Invest-XRP said:

Not sure if we would be able to pull off moving to Puerto Rico after I did some research from this quote. 

"So, capital assets (such as land, stocks, bonds, etc.) acquired after moving to PR are tax free. As for property acquired prior to becoming a resident, special provisions can result in a 10% long term rate from the day you qualify and a 5% tax rate applies to property acquired prior to becoming a resident and held for at least 10 years thereafter. See details below."

http://premieroffshore.com/move-puerto-rico-pay-zero-capital-gains-tax/

For big holders, the move would be worth it though. They’d pay 10% rather than 20% on LT cap gains, and they’d avoid the state tax.

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11 minutes ago, Only-Invest-XRP said:

Whats the tax law in Puerto Rico that everyone is talking about, thanks!

 

research Act 20 and Act 22 Puerto Rico tax exemptions and your salvation awaits.  All we need to do now is avoid all the unknown pitfalls that await trying to redistribute trillions of dollars of wealth in the march towards #XRPTHESTANDARD and sent BTC to the kiddie pool.

I'm guessing "is it a security?" is one of 5-7 that we will successfully navigate due to having the best fintech team on the planet.  Wont be easy though boys and girls.  

Edited by aavkk
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