Saturday, February 9, 2019

Question about short vs long term capital gains.

I'll probably hire an accountant/CPA when I finally do my taxes, but it would be greatly appreciated if someone can confirm/correct my understanding of how a couple scenarios would work out

  1. Since any crypto to crypto or crypto to fiat is a taxable event, I was wondering how this event would play out: I buy Bitcoin on January 1, 2019. $5000 worth USD fiat. I then immediately (within minutes) trade all of that for Monero priced @ $100. I hold until January 2, 2000, where Monero is priced $200. I trade it back to Bitcoin and sell for fiat, effectively giving me a $5000 capital gain. Is the $5000 capital gain subject to a one time long term gain, or do I also need to factor in the BTC->Monero and Monero->BTC trades as they are taxable events? I would imagine these ones are negligible but were also done in the "short-term".
  2. Suppose I somehow get really lucky and make a trade where I bought some obscure alt for $1000, I hold it for a month, and it moons and I sell fiat for a $50k total gain. I would like to use a bulk of that $50k for other personal uses (loans, mortgage, etc). Is the best/safest action at this point to lock up ~40% of that 50k, not spend a penny on that until I file taxes the following year? Or how would you go about it if you're in a situation where you would like to use a chunk of your huge gains?

Edit: One more question: Is there a strict line for how long a year? e.g. holding an instrument for 350 days < would still be considered short term?


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