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Sending my XRP to family member's exchange to sell. WHO IS LIABLE FOR WHAT TAXES?


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I have a very specific question about capital gains taxes and potential gifting tax. I was hoping I could get an answer here. I want to give the background of everything before I ask the question.

In November and December of 2020 and January 2021, I bought (A VERY BIG AMOUNT) XRP on the only crypto exchange offered in New York, Coinbase.  As a result of the lawsuit, the exchange, Coinbase, halted all trading on it. However, I was still able to hold all of my XRP on the exchange to withdraw it. 

Since I was living in NY at the time, I only had access to the only exchange available to NY residents, Coinbase. I needed to move it to a place where I could sell it. One of my family members in another state was able to sign up for Uphold, so I sent all my XRP to that family member.

The concern I have is that I dont know whether if my family member will be liable for the taxation. I bought it all with my own money on Coinbase and sent it to Uphold exchange account that is under the family member's name. 

When I bought the XRP, Coinbase had the record of me buying it tied in with my SSN and ID. When I sent the XRP to my family member, the only thing submitted was the ID, but not the SSN. I have done NO trades (buying or selling) onto his account. I only withdrawn my XRP from Coinbase to Deposit into Uphold.   

So my question is this:

If I sell my XRP under my family member's exchange account... who’s liable for the taxation? If my family is liable for the taxes, I want to withdraw my XRP out of that account. It's a heft amount.

I was also concerned that it might be considered a gift. If I retrieve it back to my wallet with no trades on it... will it still be liable for the gift tax? Essentially I'm just returning my asset back to me.

Thanks everybody. Enjoy the moon ride

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  • 5 weeks later...

My accountant reported it as a gift and said if the gift was over $1,500 for the year I would need to report who I gave it to.  They report gains when they sale based on the price they received it.  It's best to ask your tax preparer for confirmation.

Edited by inXs
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