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Xrp2damoon

How is xrp taxes?

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I know each state has different ways of taxing crypto currency (at least I think) but I know if I sell my assets I will get hit with a 45% tax? But what if in the future I will be able to purchase things direct with my xerps? For instance what if I walk into a store that accepts xrp and I buy everyday things? How do taxes work on all this? I’m curious because I’m a strong believer one day xrp price will be ridiculously high (like over $500) and I’ll be able to just buy a car or a house with my xrp.

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All crypto, at least in the US, is taxed like property. So, any gains or losses you incur act similar to how you'd find taxes on a paycheck. So, a good estimate is going to be to expect it to match whatever your income tax bracket hits for the year. If you're in the 24% range, then any gains you report (which you should!) will essentially be taxed at 24%. Any losses will reduce your gross revenue, which will increase your tax refund by 24% (very loosely, don't overassume this).

If crypto continues to stay as property, then, at the time of purchase, you'd need to calculate gains or losses to know what to file in your taxes for that year. It'll be messy. If someone like Mastercard or Visa allows crypto payments like some 3rd party cards are doing, then I'm guessing they'd help provide you that information.

Note: I'm not tax or financial advisor, so this is all just information I've gathered over my past year in crypto. When it comes to taxes, that's ultimately in your hands to figure out~.

Edited by Xrylite

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15 hours ago, Xrp2damoon said:

I know each state has different ways of taxing crypto currency (at least I think) but I know if I sell my assets I will get hit with a 45% tax? But what if in the future I will be able to purchase things direct with my xerps? For instance what if I walk into a store that accepts xrp and I buy everyday things? How do taxes work on all this? I’m curious because I’m a strong believer one day xrp price will be ridiculously high (like over $500) and I’ll be able to just buy a car or a house with my xrp.

Dear Human,
I can assist you with this.

https://medium.com/tokentax/short-term-vs-long-term-capital-gains-rates-explained-592e3d767932

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3 hours ago, Xrylite said:

All crypto, at least in the US, is taxed like property. So, any gains or losses you incur act similar to how you'd find taxes on a paycheck. So, a good estimate is going to be to expect it to match whatever your income tax bracket hits for the year. If you're in the 24% range, then any gains you report (which you should!) will essentially be taxed at 24%. Any losses will reduce your gross revenue, which will increase your tax refund by 24% (very loosely, don't overassume this).

If crypto continues to stay as property, then, at the time of purchase, you'd need to calculate gains or losses to know what to file in your taxes for that year. It'll be messy. If someone like Mastercard or Visa allows crypto payments like some 3rd party cards are doing, then I'm guessing they'd help provide you that information.

Note: I'm not tax or financial advisor, so this is all just information I've gathered over my past year in crypto. When it comes to taxes, that's ultimately in your hands to figure out~.

I'm pretty sure he is also wanting to know about information related to state income tax. He can, however, move to Texas and Washington (forgot the other states) that doesn't have state income tax. 

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1 hour ago, BostonXRP said:

Will the exchange provide a tax statement for any sales that are done? Similar to statements that are received from a brokerage account when selling stock?

To my knowledge, most exchanges don't have anything specific to taxes. There are sites/services out there that will take your trade histories and do that calculation for you, but it's hit and miss. I buckled and just paid for one of the premium ones, but you still need to either sync or upload your trade histories for it to generate those documents.

This is a major issue for the crypto game. Of all the people I know who bought into crypto, I don't think any of them reported gains/losses last year. It doesn't mean you'll get away with it if you're moving $XX,XXX worth of crypto though, so I always advised to just report. I don't think it's advertising since I get nothing from it, but I know I filed through CreditKarma last year and it was free. TurboTax was trying to move me into the $40 tier solely because I had crypto to report.

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Has anyone looked into keeping their sales and capital gains private from the government?

For example, opening an offshore bank account layered with a corporation and blind trust. Then selling their XRP on a foreign exchange and transferring the funds through the bank account?

I've seen companies touting this, but it seems questionable and risky to me. Wondering if anyone has experience with this type of setup?

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@Xrp2damoon XRP is subject to federal capital gains tax.  if you hold it for longer than one year the federal tax rate is 20%, if you hold it less than a year the tax rate is your ordinary income rate.  Different states tax capital gains at different rates.  Basically if you live in a State run by Democrats it's higher, if you live in a state run by Republican's it's lower.  But yeah pay your taxes.

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