Hacker News Reader

Comment by artificialLimbs | Hacker News Reader

Are there any laws in this space that would give the IRS authority to do anything about crypto earnings/losses?

Well, the definition of income in the USA includes [1]:

> income means all income from whatever source derived

Then it only proceeds to except certain things. So the better question, from the perspective of tax laws are: "are there any laws in this space that takes away the IRS's very clear authority to treat crypto earnings/losses like any other income"

[1] https://www.law.cornell.edu/uscode/text/26/61

Existing tax code already covered crypto to a large extent.

If you buy a boat for $100k and sell it for $150k, you've always had to pay taxes on the difference.

Crypto works the same way.

Unlike with digital assets, you don't have to tell the IRS you acquired a boat unless you sell it and owe tax.

If you bought or sold a thing for profit, or were paid in a thing, or won a thing in a contest, they can tax you on it. Even if it's illegal.

You owe the IRS taxes for everything, including profits from crime.

yes, always were

income is income

capital gains is capital gains

dividends are dividends

the asset type that any of this was received in was never a factor, the nature of the transaction was the only factor

its nice that the crypto space is maturing on this matter now

For the purposes of taxation, cryptocurrencies are considered securities. You have to pay capital gains taxes on them (or, as appropriate, deduct your losses).

cryptocurrencies are considered property not securities. The IRS has been very clear on this for nearly 10 years.

I think you are conflating capital gains with securities, but there are in fact many asset classes besides securities.

Sorry, you're right[1]. I was confusing the IRS with the SEC.

[1]: https://www.irs.gov/individuals/international-taxpayers/freq...

Are actual traditional currency holdings still taxed in the US on unrealized gains and losses each year? The rules in question would seem to clarify that crytos are not mere currencies.

digital assets are not taxed on unrealized gains and losses, unless by realize you wish that meant “to dollars in my bank account”, asset to asset trades are taxed on their notional dollar amounts

and nobody is conflating the currency aspect of crypto, that misnomer is so last decade. if someone starts a conversation with that word, I’m not going to correct them until a reply like yours tries to read too deep into it

Reply on news.ycombinator.com