I've converted $10,000 US dollar to 10,000 USDT (stable coin) virtual currency in a service that returns 200 USDT per month but instead of converting it back to USD I roll over that 200 USDT each month back into the service and thus haven't converted anything back to USD or converted to another virtual currency. Am I required to pay taxes on the returns that I roll over?
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Just to add, If you buy crypto, there's nothing to report until you sell. If you earned crypto through staking, a hard fork, an airdrop or via any method other than buying it, you'll need to report it, even if you haven't sold it.
In general the answer is yes. You could have received it but chose not to.
You still received income.
Just to add, If you buy crypto, there's nothing to report until you sell. If you earned crypto through staking, a hard fork, an airdrop or via any method other than buying it, you'll need to report it, even if you haven't sold it.
Hi There:
Assuming the 200 monthly USDT is increasing your initial $10,000 USDT by 200 USDT monthly then it is taxable at short term ordinary gain rates. For a thought experiment, 200*12 equals a 24% rate of return, which makes me wonder if such a return is sustainable? Btw, I'm an accountant not a financial planner, so re: viability of investment-please consult with a financial planner.
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