12 replies
12 recasts
53 reactions
1 reply
0 recast
8 reactions
0 reply
0 recast
4 reactions
0 reply
0 recast
0 reaction
0 reply
0 recast
0 reaction
4 replies
0 recast
13 reactions
My understanding - if you buy and hold, no taxes
If, after you buy any property (not just crypto - it could be cake, a painting, an antique) and then later
- swap it for something else
- sell it for cash
- spend it one something (ie, a credit card that dips into your crypto)
then you must calculate the FMV (fair market value) of the asset when you bought it, and compare it to the FMV of when you sell it, and you have capital gains on that amount
example:
- you buy 100 Farcaster coin at 0.01 ($1 worth)
- ten years later, one Farcaster coin is worth $1000
- if you did nothing, you owe no taxes
- if you spend one farcaster coin to buy $1000 worth of BTC
-- you're spending one coin that cost you 0.01, but is now worth $1000
-- you have to claim 1000 minus the cost as capital gains ($999.99)
-- since you waited ten years, it's long term capital gains which in almost all cases is way way way less than short term capital gains
It's more complicated than this so always check with a tax accountant 0 reply
0 recast
5 reactions
1 reply
0 recast
2 reactions
1 reply
0 recast
2 reactions
0 reply
0 recast
1 reaction
0 reply
0 recast
0 reaction
