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MegaNerd

Tax nightmare.. $400,000 due!?

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2 hours ago, MegaNerd said:

incorrect. you can not claim all those loses in one go. 

Any capital gains he had, which was in the several hundreds of thousands will be taxed. 

At least with normal investing (as I understand it), if you have a short term gain and a short term loss, you can apply the difference of short term losses to long term gains. I don’t fully know the story with this person...

 

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3 hours ago, vrippled said:

How about all those people out there in cryptoverse using bots to trade/manipulate the market incessantly 24/7??

Don't they also owe a ton of taxes???

 

Yes, they do.  Right now a lot of traders are dodging taxes, and many people don't even know they are.  Eventually the tax man cometh though.

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3 hours ago, zerocool said:

At least with normal investing (as I understand it), if you have a short term gain and a short term loss, you can apply the difference of short term losses to long term gains. I don’t fully know the story with this person...

 

This is true if the gain/loss is within the same tax year.  The guy screwed up because he realized all of his gains in 2017, but then took those gains and rolled them into bad investments in early 2018 right before the crash without paying any taxes. This means his total losses from 2018 can’t be applied to his total gain realized from 2017. He can only use the max $3k per year going forward. He’s screwed. He’ll need to cut a deal with the IRS.

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This just shows how ridiculous the tax code is. This guy shouldn’t “owe” the IRS anything other than taxes on the net profit he made. Meanwhile, rich folks have all kinds of little loopholes available. Like the one where I owe a swanky apartment complex, claim some silly amount in depreciation, and no one at the IRS questions it. If you own a lot of rental property, it’s quickly millions we’re talking about. 

Between student loan payments and the IRS and his young age, I won’t be surprised if this dude says “screw this” and emigrates to another country.

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1 hour ago, Deeznutz said:

This just shows how ridiculous the tax code is. This guy shouldn’t “owe” the IRS anything other than taxes on the net profit he made. Meanwhile, rich folks have all kinds of little loopholes available. Like the one where I owe a swanky apartment complex, claim some silly amount in depreciation, and no one at the IRS questions it. If you own a lot of rental property, it’s quickly millions we’re talking about. 

Between student loan payments and the IRS and his young age, I won’t be surprised if this dude says “screw this” and emigrates to another country.

It was your team that created the IRS and the Federal Reserve. How funny it is that Team Blue forgets these facts. 

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8 hours ago, TheXRPer said:

It was your team that created the IRS and the Federal Reserve. How funny it is that Team Blue forgets these facts. 

it doesn't really matter. what's actually funny is how ultimately these institutions are controlled by people from both "teams" with money and power for their advantage and to keep them in power, and they leave us regular folk with the illusion that it's each other we're against when really it's those pulling the strings we should be united against

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Unfortunate for the person, but at the end of the day he made a lot of money, then spent it.

Had he made a shed load on the stock market, cashed out and spent it all on a Lambo, it's the same really.

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46 minutes ago, trubbleinmind said:

it doesn't really matter. what's actually funny is how ultimately these institutions are controlled by people from both "teams" with money and power for their advantage and to keep them in power, and they leave us regular folk with the illusion that it's each other we're against when really it's those pulling the strings we should be united against

A lot of truth in this post right here...

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1 hour ago, trubbleinmind said:

it doesn't really matter. what's actually funny is how ultimately these institutions are controlled by people from both "teams" with money and power for their advantage and to keep them in power, and they leave us regular folk with the illusion that it's each other we're against when really it's those pulling the strings we should be united against

Just because the guy didn't know the rules of the game doesn't mean the game is rigged.  If you are going to play with the big boys you can't go in blind. There are no teams against anyone.  If you make hundreds of thousands of dollars and you don't consult an attorney you are a fool and you know what happens with a fool and their money, right?

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10 hours ago, TheXRPer said:

This just shows how ridiculous the tax code is. This guy shouldn’t “owe” the IRS anything other than taxes on the net profit he made. Meanwhile, rich folks have all kinds of little loopholes available. Like the one where I owe a swanky apartment complex, claim some silly amount in depreciation, and no one at the IRS questions it. If you own a lot of rental property, it’s quickly millions we’re talking about. 

The tax code isn't ridiculous.  The "guy" just didn't know the law and try to gamble with money that he actually owed to the government.  

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The jury is still out on this one. It could be possible per articles such as this one, to use 1031 exchanges:

https://www.forbes.com/sites/tysoncross/2018/02/19/the-truth-about-cryptocurrency-and-like-kind-exchanges/#21bed6216fd1

Accountants I have spoke to suggest filing as if it were short and long term gains. Then, for any trades before end of 2017, file an amendment with a disclosure statement using 1031 exchanges. That way, you avoid the IRS ruling against you on your original return which will trigger huge tax penalties should they disallow the 1031 exchanges. However, if they accept the amendment, you will typically cut your tax bill by a substantial amount. In my case, over 75%.

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1 hour ago, ElvisLives said:

The jury is still out on this one. It could be possible per articles such as this one, to use 1031 exchanges:

https://www.forbes.com/sites/tysoncross/2018/02/19/the-truth-about-cryptocurrency-and-like-kind-exchanges/#21bed6216fd1

Accountants I have spoke to suggest filing as if it were short and long term gains. Then, for any trades before end of 2017, file an amendment with a disclosure statement using 1031 exchanges. That way, you avoid the IRS ruling against you on your original return which will trigger huge tax penalties should they disallow the 1031 exchanges. However, if they accept the amendment, you will typically cut your tax bill by a substantial amount. In my case, over 75%.

im glad you chose to use a young picture of elvis. 

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