@NCperson wrote:
@Opus 17
<< I think you have advanced a hybrid position that if CC is used to purchase an investment, a loss is deductible. >>
not sure where I did that and if so was unintended....
trading CC for US currency is a trade, but not an investment, but it does close out the investment position on the CC.
If CC is used to purchase an investment doesn't create a loss; only the eventual sale of that investment creates a loss - I know you know that - just strugging with how I advanced a hybrid position, even unintentionally
thx
Because my understanding is that every time you convert out of CC into something "real" (including official fiat currency, goods or services, or even other CC), that is a taxable event, no matter what is purchased. In other words,
- If you convert from BTC to Etherium, that's a reportable event. You recognize a gain or loss on the US$ value of the conversion on the BTC on the day of the trade, and the basis of your new Etherium is the price on the day of the conversion, you don't carry forward your original basis in BTC.
- If you sell BTC to buy a coffee, that is a taxable event and you have a gain or loss based on the US$ value on that day.
- If you sell BTC to buy investment property, that is a taxable event and you recognize a gain or loss on the US$ value of the BTC at the time of the trade, even if the thing you buy is an investment. Your basis in the investment property is the US$ value on the day of the purchase, and not the original basis in the BTC.
At least, that is my understanding.
