IRS asking all bitcoiners to DOX their cost basis before Jan 1st

save harbor these nuts

You have to now report gains separately for every self-hosted wallet and custodial account. You have to choose an ordering strategy (oldest, largest, etc...) for gains reporting, and you need to write a letter of intent stating your intent to comply and which ordering strategy you will use going forward. You don't have to send the letter of intent to the IRS; just keep it for your records, should you be audited.

They seem to be casting a big net while preparing for some big scary enforcement efforts. Good chance the next administration streamlines things, eliminating BS.

Sounds like a good time to lose all private keys

Im not taking digital pictures and getting them timestamped online “just in case” I get audited. Hodling isn’t a taxable event.

Watch Matthew Kratters video from today. Pretty informative. Tldw, I’m not doing it. @npub1s33s...252p

Chevron ruling should make this a bs measure, but I am not a filthy lawyer

You don’t have to DOX it, yet. There’s no reporting, just local documentation.

What I want to know is why can't we just create all permutations of the letter of intent and decide which one is best when we report 2025's taxes? Timestamp it, photograph it, notarize it; whatever. Do them all. Decide later.

opentimestamps bout to get lit! 🔥😎

Annoying

Just adding more compliance cost. A hidden tax. Having said that, you could have a wallet of each accounting method, and have the optionality to keep the tax bill to a minimum (0). For example, oldest coins can be used on low income years (less than 40k) to lower your long term cap gains bill to 0.

Word. I’m with ya. The enforcement cost of this for the IRS has to be unattainable

This is kind of a double-spend attack, for which the IRS has no defense against.

Can't hurt to put the documentation together as nothing is required to be submitted at this time. Best case, you never have to touch it. Worst case, you have to make a decision in the future about whether to provide it or not.

I don't know if you can have homogenous cost basis strategies. My impression was that you had to apply the same strategy to each.

And that the strategy has to be the same going forward for future taxes

Well that’s bullshit 🤮

What you are describing is exactly why these safe harbor rules now exist. People started strategically picking and choosing the most advantageous strategy

Interesting. The real solution is to rid of capital gains tax on #bitcoin as it is a tax on our refusal to be debased. But until then, Inlove your idea here 😂 View quoted note →

We all need to pressure Trump to abolish the IRS and as many other agencies that should not exist. Literally no one wants the IRS to exist. IRS are Slave masters.

The IRS can suck it.

I don't have any cause I haven't seen it.

Lol

Attempts of nazi requests for papers, precursor to an bitcoinesque executive order 6102. Become ungovernable. These are desparate attempts of a failing system thats unraveling, scared and losing control.

While I am not a lawyer or tax accountant - I think it’s important to note that basically none of the reputable tax firms have made any statement on this. It is getting hyped by a bunch of cryptard crypto tax influencers to try sell you their kit. The most reputable summary I’ve found is from RSM (link below). They frame it as an OPTIONAL action that one might take if they believe they can gin up some tax efficiencies for themselves out of it. Otherwise it sounds like you’re just subject to FIFO on one hand (not unreasonable) and then (counterintuitively to the former thing) each “wallet”needs to have cost basis going forward (which is absurd). They don’t know how to define a “wallet” and it is not clearly defined. To me the simplest way to think of then, in the absence of clarity, is tracking cost basis at the exchange level. Though even this will be difficult for many of us in a retroactive sense. So going forward, I take this “regulation” if it is actually to be a real thing, to favor the following actions: 1. Keep it simple, use FIFO 2. Don’t mix bitcoin from different centralized exchanges (to contain the cost basis at the exchange level) 3. Don’t sell if you can help it.

The end of universal wallet accounting; Rev. Proc. 2024-28 safe harbor relief

With the release of IRS final regulations, starting Jan. 1, 2025, taxpayers no longer will be able to track the basis of their digital assets as if...

#Plebchain #Bitcoin

💯 the IRS is a criminal organization

If you off load from and exchange where it's been sitting for 3 years to a hardware wallet is that going to be seen as a taxable event by the IRS?

That would be highly regarded since nothing has been sold the answer is and should be no

In theory IF they can find those alternates they can prove you didn’t abide by the safe harbor requirements and can give you the most punitive tax treatment available. 🤷

the YouTube account Bitcoin University has a decent video on it. It seems like a good thing to do since you could sell more recently acquired coins if you want, whereas older coins might have missing cost basis if you're forced into the FIFO structure.

Lost it all in a boating accident etc.