I live in Australia but my crypto profits are earned from the U.S. financial trading center. I couldn’t withdraw money as I have to pay taxes first. I don’t know how ?

[wannapasrihong-g]

This was the customer service told me to do
There are currently two ways to pay taxes
1. You arrive in Washington DC to go through tax procedures, you can deduct tax from BQB when you go through tax procedures in Washington DC
2. Apply for BQB staff to help you with tax procedures, but BQB has no right to deduct your USDT. You need to transfer the equivalent USDT from other cryptocurrency exchanges to BQB so that staff can help you with tax procedures.

I would like to do the 1st option as I don’t have money to pay tax first and I want the the to be deducted from the profit.  I’m looking for agent to help me with this

[Anonymous_]

Perhaps @pk can assist here.

[pk]

@wannapasrihong-g , am I to assume that you are US person ( citizen, Green Card ) and currently in Australia ?   Else I do not understand why  you have to file US taxes -- or are you saying that these Crypto profits/ gains are from US entity , denominated in US$ , US sourced  etc.   ?  Who is the US entity that you have an account with ?  If you are not US person then why/how did you end up using this entity as your broker?

Please give me a day to research this a bit more  ( have not been following the Crypto regs very much  ) -- any info you can provide in the mean time would be helpful

pk

[pk]

@wannapasrihong-g , I am still awiting your response for my request for more info.  However, IMHO, 

 your Crypto broker / entity is  giving you a lot of garbage.  My response  is applicable to  foreign persons with US sourced/ connected incomes ( disposal of assets , passive incomes  etc. ), not specific to crypto only.

1. There is no requirement to pay taxes before  the entity can disburse the proceeds of the sale.

2. What is supposed to happen is ---(a) the entity effects the sale of the asset ;  (b) if the owner is foreign person, entity, trust etc., then the broker MUST withhold 30% tax ( nominal amount) and either directly or using an approved agent ,  deposit the  withheld taxes to the IRS, and the rest to the  foreign owner; (c) issue a form 1041-S/T to the recipient along with informational copy to the IRS within the first 15/ 31 days of Jan of the following year.

Therefore the question is why are they not doing their job and asking you come to the USA and go through the tax procedure.  There is no such requirement --- only requirement for the foreign investor is to have taxes withheld before distribution and  for the foreign tax payer to file a tax return to affect reconciliation of the withheld  taxes.

The broker's requirements are substantially  the same for a US investor except for withholding requirement.

Please see Pub 515

I await your response

[pk]

@wannapasrihong-g , I am still awaiting your response for my request for more info.  However, IMHO, 

 your Crypto broker / entity is  giving you a lot of garbage.  My response  is applicable to  foreign persons with US sourced/ connected incomes ( disposal of assets , passive incomes  etc. ), not specific to crypto only.

1. There is no requirement to pay taxes before  the entity can disburse the proceeds of the sale.

2. What is supposed to happen is ---(a) the entity effects the sale of the asset ;  (b) if the owner is foreign person, entity, trust etc., then the broker MUST withhold 30% tax ( nominal amount) and either directly or using an approved agent ,  deposit the  withheld taxes to the IRS, and the rest to the  foreign owner; (c) issue a form 1041-S/T to the recipient along with informational copy to the IRS within the first 15 days of March of the following year.

Therefore the question is why are they not doing their job and asking you come to the USA and go through the tax procedure.  There is no such requirement --- only requirement for the foreign investor is to have taxes withheld before distribution and  for the foreign tax payer to file a tax return to affect reconciliation of the withheld  taxes.

The broker's requirements are substantially  the same for a US investor except for withholding requirement.

Please see Pub 515

I await your response

[wannapasrihong-g]

I’m using bqbmarket and Binance (there is no issues about Binance ). I asked bqbcustomer service that I wanted to withdraw the money and they said I can’t 
Thus was the options they told me

There are currently two ways to pay taxes
1. You arrive in Washington DC to go through tax procedures, you can deduct tax from BQB when you go through tax procedures in Washington DC
2. Apply for BQB staff to help you with tax procedures, but BQB has no right to deduct your USDT. You need to transfer the equivalent USDT from other cryptocurrency exchanges to BQB so that staff can help you with tax procedures.

PS. I’m not a US citizen 

thank you 

[pk]

@wannapasrihong-g , my earlier response as to  disposal of US financial assets owned by Non-Resident Alien ( NRA) , is still valid.  A search for BQBMarket yielded no results  -- so I am at a loss to  understand who this company is , where they are located, business they are in etc.  Can you confirm that you are dealing with BQBMarket and/or Binance.  Cannot help you otherwise.

[wannapasrihong-g]

I’m dealing with BQBmarket now 

I don’t have the problem with Binance 

what I’ve done was I transferred money to Binance then transferred money to bqb for trading (I did what a friend told me and now that’s friend disappeared so I thought I got scammed) . Now I try to withdraw my money including profit but they freeze my money in the acc and the customer service told me I have to go through tax procedures first before 12 of August otherwise I will face penalty of 5-10% . 
I have no idea about tax procedure in the US. 
I asked them to put my money back for trading in the system but they said they can’t .
I asked the customer service about the report and they said system has already reported my profit to the tax office, so it is not possible to cancel the withdrawal at this time. What they recommended me was It's blockchain tax address designated by BQB, I can buy USDT from other cryptocurrency exchanges and transfer to the blockchain address that they gave me. I definitely not gonna transfer any more money to them. I’m so headache to deal with this as I feel like I’m dealing with scammer now. If I can get the money back . Any places or websites that I should report ? 

[Opus 17]

@pk 
@wannapasrihong-g 

i’m concerned that you are the victim of a scam. If you are a non-US person, then under normal circumstances when dealing with a US financial institution, you would be required to file a form that provides your identifying information, I believe this is a W-8BEN, although I have not double checked. The foreign institution withholds 30% of the income and sends it to the IRS with your identifying information. At the end of the year, you file a nonresident US tax return. If you owe income tax on the transaction, you calculate the tax and get a refund if the withholding is more than your tax. If you don’t owe any tax, you show this by filing a tax return with zero tax due, and you get an a refund of the entire amount withheld from the IRS.

There is no reason, and nothing in the tax law, that requires you to pay tax to the institution before cashing out your investment. They should not be demanding money upfront.  They should withhold tax from the proceeds and send you the rest of the proceeds.  There is also no reason for you to travel to the United States, because you can provide the tax documents by fax or email a PDF.

I hope this is only a misunderstanding, but it sounds very shady to me and I don’t know to whom you can turn. Perhaps you can contact the US department of justice. I would certainly not send any money upfront.

[JeffR195459]

This is almost exactly what has happened to me.

I met a person, got talked into investing in crypto (DeFi Liquidity Mining) It worked for a while until they offered a deal where they used my tokens for 90 days at a higher rate of return. When the 90 days was over, they told me I needed to pay 30% taxes before they would release my money back to my wallet.

Of course, I didn't have that kind of money. They also mentioned a 5% penalty per month.

So I'm out a large chunk of change and my 401K is depleted by a large amount.

I know I was scammed.

My question is, can I claim my loss as a theft and thus claim the entire loss this year? Other wise, my understanding is that I can only claim a carry forward loss to the tune of $3,000 per year. At that rate, my loss will outlive me.

Thanks for any help.

[Opus 17]

---

@JeffR195459 wrote:

My question is, can I claim my loss as a theft and thus claim the entire loss this year? Other wise, my understanding is that I can only claim a carry forward loss to the tune of $3,000 per year. At that rate, my loss will outlive me.

Thanks for any help.

---

Ponzi scheme losses may be deducted.  Other theft and casualty losses are not deductible unless associated with a federally declared disaster.  You may want legal or tax advice to determine if this is a Ponzi loss, not all Crypto scams would meet the required legal definition although some would.

If this is a schedule D investment loss, you could adopt a personal investment strategy that would create lots of capital gains (instead of dividends or interest), and keep cashing them out.  You could create several years of tax-free gains.  (Your investment goals and strategies might be very different from someone not in your position.)