Should I only report on my ITR the transactions in coinbase ( USD to Ltc/BTc)? or also my Binance transactions even though it's same money I used from coinbase?

Forum|Forum|7 years ago
June 6, 2019
1 reply
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PS: I bought LTC/BTC from coinbase (USD to ltc/btc) and used them to buy other cryptocurrencies in binance. Technically same amount/ less already. Should I include the transactions in binance ( btc/ltc to altcoins)

TomYoung

Alumni - Champ

Each exchange of one cryptocurrency for another cryptocurrency is technically a "sale", (as would an exchange of a cryptocurrency for US dollars), that does need to be reported.

The IRS has made that clear in Notice 2014-21

Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for other property?

A-6: Yes. If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency. See Publication 544, Sales and Other Dispositions of Assets , for information about the tax treatment of sales and exchanges, such as whether a loss is deductible.

Q-7: What type of gain or loss does a taxpayer realize on the sale or exchange of virtual currency?

A-7: The character of the gain or loss generally depends on whether the virtual currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is a capital asset in the hands of the taxpayer. For example, stocks, bonds, and other investment property are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the sale or exchange of virtual currency that is not a capital asset in the hands of the taxpayer. Inventory and other property held mainly for sale to customers in a trade or business are examples of property that is not a capital asset. See Publication 544 for more information about capital assets and the character of gain or loss

Tom Young