Location: U.S. California
The thread I made here explains the context: https://old.reddit.com/r/Bitcoin/comments/16pffie/noob_that_needs_help_with_coinbase_from_other/
But basically 3 months ago I signed up for a Coinbase account but never provided ID verification, so I was only able to buy Crypto from them but couldn’t do anything with that Crypto, as far as I know this is not considered a taxable event (hence the lack of need for an ID)
My dad accidentally issued a chargeback (which we got resolved, it was a mistake on both our parts) but now I owe Coinbase $1.70 and I have to pay up in 2 days or they’ll liquidate whatever Crypto I’m currently holding in my account to cover the costs, so my questions are:
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I know simply buying crypto off an exchange and not doing anything with it isn’t a taxable event, but selling that crypto certainty is. If Coinbase sells off any crypto on my account to cover my costs does that count as a taxable on my end or theirs? I wouldn’t be the one actually doing the selling, it would be Coinbase in this case, and from what I heard until I get my actual “cold” wallet to where I can store my crypto, “if it’s not your keys, not your crypto” so technically that crypto isn’t even mine to begin with and I was simply borrowing from Coinbase all along?
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Is trading between your own accounts considered a taxable event? Because my Coinbase account is currently restricted from buying crypto, say I buy some crypto on my PayPal to cover the costs I owe Coinbase, I then send that crypto over to my Coinbase account/address so that Coinbase has funds to take out of my account to reimburse themselves after the 5 days are up if I have no method of paying directly (due to lack of ID verification and Coinbase apparently not taking debit cards for this). Does this count as a “trade” and is taxable? Or is it only taxable if you’re sending and receiving crypto from another person, not yourself? This is more-so just a transferring of your funds and therefore isn’t taxable correct?
FWIW, I am unemployed and an currently dependent on/being supported by my parents despite being 31.
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