can we go back on this one?
@stvnguan why did you send BTC to someone else? were you buying a good or service? if yes, then you bought the good or service and sold the BTC to complete the exchange. You must report the sale of the BTC as a taxable event, using your cost basis in the BTC to determine the gain / loss
@Critter-3 - I do not believe the Euro example works. This is the whole issue with crypto is my understanding. Crypto is considered an asset and NOT a currency by the IRS. So each trade of the crypto is a taxable event. When exchanging crypto for a good or service, that sale of the crypto is a taxable and reportable event as you have disposed of an asset (the crypto).
if you buy a slice of pizza with crypto, you've exchanged the cypto to buy the pizza and have to report the sale of your asset. That is very different than flying to Paris and exchanging dollars for Euros and buying the same slice of pizza - because of the IRS view of assets (e.g. crypto) versus currency (e.g. euros). This is what makes crypto so difficult to use - each transaction is reportable to the IRS.
here is one article:
https://time.com/nextadvisor/investing/cryptocurrency/cryptocurrency-tax-guide/#:~:text=The%20IRS%20....
thoughts?
