Hi,
I transferred $50 worth of Ethereum from one crypto wallet I own to another crypto wallet which I also own. The two wallets are held at different crypto exchanges (I'm not sure if that matters).
From what I can see, the transfer doesn't have to be reported for federal tax purposes. However, the part I don't understand is this: The receiving exchange charged me a hefty fee for completing the transfer. If I don't have to report the transfer itself, how do I account for the fee when I sell/trade the Ethereum someday in the future? It's almost as if I sold a stock and my gross proceeds from the sale excludes the fee, which would be reportable for tax purposes...but at the same time, if I don't need to report the Ethereum transfer...and around I go in circles.
Thanks,
Jason
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that fee could be regarded as an investment expense that is no longer deductible.
Please see this partial answer from @Critter.
Not every transfer of funds is considered a sale. For the user, sending bitcoins from a one wallet to another wallet, for example, is only a transfer and not a sale since the user is still in possession of the coins.
You should keep your own records for best results and update the report accordingly,. “For example, if you transfer funds offsite to a desktop wallet, and then back again, you would not count this as a sale of digital currency.”
Please see this partial answer from Critter.
Not every transfer of funds is considered a sale. For the user, sending bitcoins from one wallet to another wallet, for example, is only a transfer and not a sale since the user is still in possession of the coins.
You should keep your own records for best results and update the report accordingly, “For example, if you transfer funds offsite to a desktop wallet, and then back again, you would not count this as a sale of digital currency.”
that fee could be regarded as an investment expense that is no longer deductible.
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