Question I got today - person has been buying DCA since 2017 - he is considering taking some BTC for personal reasons.
Now when he cashes out into cuck bucks - which BTC is he selling for tax purposes when he's been buying recently.
Does that make sense?
#bitcoin #asknostr #freedommoney
Stopped making sense when you said selling.
It’s not me - I’m trying to get him the answers
People don’t view BTC the way we do.. and convincing them otherwise is pointless..
I know it’s not you.
100 000 sats aint gonna make a difference in my life right now 🤣🤣
Just wanted to know tax implications
Depebends ob the tax jurisdication obviously.
Normally the are treated first in first out.
That’s rather ridiculous… but the jurisdiction is a first world country so assume it’ll be this..
Assuming this is on a trust basis..
In German its FIFO, but not on an UTXO base.
You start DCAing into BITCOIN, and everytime you sell/spend BTC they assume you've spent the "oldest" sats you own, independent of wich sat you actually move.
That's rather nice jurisdication here, because any gains from sats you hold longer than 1 year are tax free (!).
I won’t have this issue - I don’t have many sats but I now understand your comment. Thank you! 🤙🏻
My understanding is you can work out the price you bought either as first in first out or you can do an average if all purchase prices, none of which is easy for accounting purposes in itself making a case for removing the cap gains tax on #bitcoin
Depends on the country is this for the US ? If not do you guys have short term vs long term capital gain taxes ?
The BTC has been bought mainly P2P and throughout the world. The person is currently in the USA and has the ability to cash out P2P.
Speak to an experienced tax professional. I believe first in first out is how most calculate their cost basis
Fuck.. that’s rather ridiculous!🤣🤣
That’s why I assume you need UTXO management and where which sats were bought from..
The best is the highest in first out, so if he’s been buying recently, then his latest buy buys are the ones that he should sell, which will have minimal gains for tax purposes.
He should keep his oldest bitcoin that he purchased at the lowest prices because that will have the largest tax consequences if he decides to sell that
So it’s a hi-fo highest in first out
That’s what I thought but seems not.. seems first bought first out..
Gonna be difficult to explain that one
