This is an enormously naive & dumb question.
If I were to sell off 1 bitcoin I bought many years ago–need money for an event in my personal life—do I need to ‘report’ taxes on it?
The only reason I’m thinking I might not is because I make 25k a year—to the best of my understanding I fall under the “0% on long term capital gains if you make under X amount in income” bracket.
The thinking might be “well why not report it if you’d pay zero anyway? cover your ass.” And, well, yes, but I’d prefer not to have the world know I own at least 50k in cash/assets now....
and... I sold some bitcoin cash, years ago, when it was quite high that I never reported. Tbf I was just a jackass kid and ignorant of taxes or I would have. Not that that’s any legal covering. And during that time: I still made 25k a year and fell under the “0% long term capital gains” anyway.
I don’t want to unnecessarily draw attention to myself in any way if I don’t have to, basically. Like I don’t want to give anybody—however remotely unlikely—reason to snoop around and realize I didn’t pay way back when.
Is this fine? What does the IRS do if they find out you didn’t report 0% in capital gains; “oh, you were supposed to file and pay zero!” Like, is that bad? What do they do; what’s the penalty on not crafting the paperwork to pay zero?
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