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Key Points
  • Cryptocurrency holders are cashing in on a surge in bitcoin prices, but the IRS is stepping up oversight, and any taxes owed will need to be paid.
  • For tax purposes, the IRS considers crypto as property, meaning that the rules for gains or losses work much like they do for stocks.
  • For the 2025 tax year, brokers will have to report sale proceeds to the IRS for crypto held in a taxable account.

 
So people are starting to take "real" money out of crypto. It will be interesting to see how this works. BTC has a market capitalization of somewhere near $2 Trillion, that's a lot of money. A mass redemption might run into liquidity issues. I thought BTC was near $98K the last time I looked, tonight it's $92K?

non-taxable account
I don't think there is such a thing that avoids taxes legally. Major crypto exchanges all have reporting obligations to the IRS. The IRS has cyber tools to ID wallets to people. They have cyber tools to analyze blockchain transactions. They are lurking. I'm sure there are ways to get away with it; consequences when caught.

Tax isn't owed until an transaction occurs. There is no tax on BTC that is being held and appreciates. If you cash in, the profit is taxable. If you earn BTC, that is taxable because it's income.
 
In 2017 I paid for some bit coin to buy something from a foreign country. Between the time I bought the bitcoin and made the purchase the next day the price of bitcoin had gone up. I ended up with $3.48 left over and pretty much forgot about it. I just looked it up yesterday and it was worth ~$580. Today it is worth ~$540. I am not usually one to gamble but I will leave it alone for another 10 years and see where it is at when I retire. I have complete faith that it will crash again but will eventually build up past where it is now.
 
So people are starting to take "real" money out of crypto. It will be interesting to see how this works. BTC has a market capitalization of somewhere near $2 Trillion, that's a lot of money. A mass redemption might run into liquidity issues. I thought BTC was near $98K the last time I looked, tonight it's $92K?


I don't think there is such a thing that avoids taxes legally. Major crypto exchanges all have reporting obligations to the IRS. The IRS has cyber tools to ID wallets to people. They have cyber tools to analyze blockchain transactions. They are lurking. I'm sure there are ways to get away with it; consequences when caught.

Tax isn't owed until an transaction occurs. There is no tax on BTC that is being held and appreciates. If you cash in, the profit is taxable. If you earn BTC, that is taxable because it's income.
Taxes on gains should not be owed if you bought and sold the bitcoin in a Roth IRA.
 
Guess I should dump what I have and roll it into my portfolio.
To me it looks like it is due for another crash. Kind of depends on how long you want to hold on to it?

Screenshot 2024-11-27 014352.png
 
Taxes on gains should not be owed if you bought and sold the bitcoin in a Roth IRA.
I have had TD Ameritrade (currently known as Schwab) for 30+ years. I have never seen a place to out right buy bitcoin. There are bitcoin futures and bitcoin spiders but I have never seen an option for straight bitcoin offered in my IRA's (1 conventional, 1 ROTH).
 
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I have had TD Ameritrade (currently known as Schwab) for 30+ years. I have never seen a place to out right buy bitcoin. There are bitcoin futures and bitcoin spiders but I have never seen an option for straight bitcoin offered in my IRA's (1 conventional, 1 ROTH).
It's a niche market right now. You would have to open an account at one of the firms that allows crypto purchases inside your IRA. I suspect the bigger players will eventually allow it.

I chose to buy into a bitcoin etf in my Roth earlier this year.
 
Key Points
  • Cryptocurrency holders are cashing in on a surge in bitcoin prices, but the IRS is stepping up oversight, and any taxes owed will need to be paid.
  • For tax purposes, the IRS considers crypto as property, meaning that the rules for gains or losses work much like they do for stocks.
  • For the 2025 tax year, brokers will have to report sale proceeds to the IRS for crypto held in a taxable account.

BTC has dropped by more than 5% over the last 2 days alone.
 
Taxes on gains should not be owed if you bought and sold the bitcoin in a Roth IRA.
With the Roth there is the contribution limit of $6,500. Which seems like a small number when you're talking about BTC numbers. But I guess every little bit helps.

Also age qualification to withdraw, and requirement for the account to be in place for five years. I think.
 
Prolly because people are cashing out to take profits.
Its bouncing back up right now.

Things like BTC are quite volatile and based on… well, nothing. Pure speculation.

That doesn't mean one can't become quite wealthy, however.

I wish I had held on to my 10 BTC I had in 2013. I'd be in a pretty good spot right now if I had.
 
I chose to buy into a bitcoin etf in my Roth earlier this year
If you're going to buy into digital currency, going the ETF route seems a more stable method.

Things like BTC are quite volatile and based on… well, nothing. Pure speculation.

That doesn't mean one can't become quite wealthy, however.
I find the whole concept of digital "currency" fascinating. In that it's a completely contrived medium that has sprung up in a short time. Millions of people have placed a lot of faith in it. Vast amounts of money have been spent on plant and equipment to create a system to support and contribute to its sustenance. It's all about belief. In terms of intrinsic value, it has no more or less than fiat currencies. Which also have no intrinsic value. Both aren't realized wealth until you turn them into something tangible. At best, they are a temporary store of value you hope will last until you can get utility out of it. Yes, BTC has the potentiality to appreciate in "value" but it's been very volatile.

When you put your money in shares of stock, that purchase represents ownership of a company. With buildings, plant, etc. Which may or may not (but often do) increase in value but hopefully will generate dividend income. Fiat currencies can be stored and used to generate interest income (except when rates are zero). Digital currencies don't represent ownership and don't throw off interest or dividends. They rely strictly on asset appreciation to increase value.

I'm not sure how that BTC halving thing works, but theoretically when you limit things that people want, the value of each unit goes up. But for most of us here and now, the process won't be completed until some time way, long after we're dead. So it's kind of academic to me. And provided BTC as a system has lasted that long and that we haven't all gotten blown away by Russian/N Korean/Chinese/Iranian atom bombs.
 
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If you're going to buy into digital currency, going the ETF route seems a more stable method.


I find the whole concept of digital "currency" fascinating. In that it's a completely contrived medium that has sprung up in a short time. Millions of people have placed a lot of faith in it. Vast amounts of money have been spent on plant and equipment to create a system to support and contribute to its sustenance. It's all about belief. In terms of intrinsic value, it has no more or less than fiat currencies. Which also have no intrinsic value. Both aren't realized wealth until you turn them into something tangible. At best, they are a temporary store of value you hope will last until you can get utility out of it.

When you put your money in shares of stock, that purchase represents ownership of a company. With buildings, plant, etc. Which may or may not (but often do) increase in value but hopefully will generate dividend income. Fiat currencies can be stored and used to generate interest income (except when rates are zero). Digital currencies don't represent ownership and don't throw off interest or dividends. They rely strictly on asset appreciation to increase value.

I'm not sure how that BTC halving thing works, but theoretically when you limit things that people want, the value of each unit goes up. But for most of us here and now, the process won't be completed until some time way, long after we're dead. So it's kind of academic to me. And provided BTC as a system has lasted that long and that we haven't all gotten blown away by Russian/N Korean/Chinese/Iranian atom bombs.
It's a Ponzi opportunity.
Get in early and you can make bank, get out last and you'll be jumping out a window.
 
It's a Ponzi opportunity.
Get in early and you can make bank, get out last and you'll be jumping out a window.
In economics, I've heard the phrase, "Greater Fool Theory." My opinion, the scale of participation in this case is astonishing. I think a major factor of attraction is the cyber concept. It's modern, it's sparkly, it's dynamic, it's instant, etc., etc.
 
In economics, I've heard the phrase, "Greater Fool Theory." My opinion, the scale of participation in this case is astonishing. I think a major factor of attraction is the cyber concept. It's modern, it's sparkly, it's dynamic, it's instant, etc., etc.
Sounds like what's going on with AI too.
 
In economics, I've heard the phrase, "Greater Fool Theory." My opinion, the scale of participation in this case is astonishing. I think a major factor of attraction is the cyber concept. It's modern, it's sparkly, it's dynamic, it's instant, etc., etc.
One thing for sure is some people have made HUGE money off this. When it first hit I wanted to buy $100 worth. Fully intending I would simply lose the money. It was such a hassle to buy some I gave up. If I had jumped through all the hoops to buy? Not sure what would have happened. It was less than a dollar a coin then. Would have been freaky trying to see how long I could hold out before I cashed in. :s0092:
 
One thing for sure is some people have made HUGE money off this. When it first hit I wanted to buy $100 worth. Fully intending I would simply lose the money. It was such a hassle to buy some I gave up. If I had jumped through all the hoops to buy? Not sure what would have happened. It was less than a dollar a coin then. Would have been freaky trying to see how long I could hold out before I cashed in. :s0092:
It would be interesting to know how many buyers who purchased it for under a buck a coin have continued to hold on to it.
 
It would be interesting to know how many buyers who purchased it for under a buck a coin have continued to hold on to it.
THAT would be VERY damn interesting to know. When I was trying to buy that C note would have bought well over 100 coins. At some point I would of course have started cashing in but damn. It would have been hard to know when. There is bound to be some who did buy and just held it. There has to be some who bought and just lost it too. If you lost track of the numbers you chose I heard you were just SOL. Many that would be a bummer.
 

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