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Here’s a question for the more advanced #BTC enthusiasts out there:

I’ve been hodling various cryptos in a self-custodial manner for years, so I’m not completely new to the world of #crypto.

Initially, when I knew even less than I do now, I tried day trading to get a feel for things, thinking it would lead somewhere. While I didn’t make a loss, it didn’t take long to realize all I was doing was generating a crazy number of meaningless taxable events with little to show for it. That’s when I switched to a HODL strategy.

In the meantime, an increasing number of vendors and service providers have started accepting BTC and other cryptos. Even #NOSTR seems to be promoting the use of BTC in everyday life via the Lightning Network.

That’s all great and definitely the way forward, but how do you guys—especially in the US, where crypto is considered property rather than currency—deal with the attached tax admin nightmare? Creating a taxable event every time I buy a pizza seems to create more hassle than it’s worth.

Does anyone have any tips or tricks for integrating small BTC payments into everyday life without creating an administrative #tax nightmare? How do you keep track of transactions? I’m not asking for loopholes or anything illegal; I just want to know how others manage it and whether I’m overcomplicating things.

Ronin 1y ago

I'm in the EU, in my country the law says we should fill taxes if you sell bitcoin in less than a year. In practice selling some sats, you can buying some stuff with bitcoin, no one cares, we don't fill them.

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Discussion

GlitchyFren 1y ago

Interesting. Thanks. Over here gifts of up to 15k per person per year are allowed so flashing back and forth is no problem. But as soon as it gets commercial (say buy a coke for BTC) you have to declare your capitial gain (or loss) 🤦🏻 In fact, even exchanging one crypto for another is already a taxable event.

Silner 1y ago

I don't thiink they could expect every small #lightning transaction recorded anyway could they?

As some of it would be offchain how would you provide evidence?

I think it's probably only substantial trades that matter.

Aside from that, was it #Japan that made a special classification for #crypto, not property or currency?

GlitchyFren 1y ago

Technically it’s every trade, no matter how small. In the US anyway. Small gifts are fine but if you swap or buy stuff yeah that’s classified as a #taxable event here. The problem is with all that #KYC shit any kind of crypto movement is recorded. Now will they go after the smallest stuff? Prob not. On the other hand, it could be a great excuse to have you audited.