Cryptocurrency, Taxes, and IRS Audits

in #cryptocurrency4 years ago (edited)

Hey crypto-friends and cypto-curious peoples! A special announcement today!

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Everyone's favorite 2 things: taxes and the IRS!

Maybe you've read some of my cryptocurrency and blockchain related articles in the last few months, but for transparency's sake I'd like to reveal to everyone that I was audited by the IRS this year. They didn't really give me much of the details but I suspect that it has to with some of the coins I've cashed out during the last few years while trying to make rent. (I was pretty much broke at the beginning of this year, as mentioned earlier.)

I won't say the exact amount but it was more than a few months worth of rent so it did sting quite a bit. This was my first audit for anything (mostly because I've never had enough money on hand for the IRS to care up until now) so it did take me completely by surprise. For a second there, I felt myself becoming very conservative or libertarian in my political leanings.

But those feelings eventually went away when I acknowledged the fact that despite this setback, I was still getting a ridiculous return on my investment, which compensated my loss by way more than enough. I decided to just pay off the bill and fines in full and resolve it the proper way. (Currently in progress, but I don't really see any roadblocks going forward, honestly.)

Still, it was a bit unnerving to find myself starting to have similar thoughts to those I've always had objections to. At any point I could've used my job-hunt struggles, broke-ness, and astronomical Bay Area rents as excuses and it would've been very easy for me to slip into that frame of mind. I know a lot of people in the space who go through great lengths to hide their transactions online to avoid being taxed, but essentially this makes them no better than the corporations and wealthy elites with off-shore bank accounts that they claim to be fighting against. Are we creating a new world or simply recreating the old one all over again?

Human nature is a very strange thing, and investing tends to bring all of the virtues and vices of people in plain sight. As an investor I can honestly say that other than being curious, clicking a few buttons and signing a few forms, I didn't really do all that much "work" to generate my return. I put my stake in something and basically just waited around. Yet you see a lot of people who bought a few coins in something immediately develop a sense of entitlement against the team and developers, as if the world owed them something...for basically doing nothing.

If banks and VCs are anything like this, it's scary to think about what goes on behind closed doors...though at the same time it may actually explain a lot about the state of society that we're in today, where overcompensation and greed seems to have replaced the need for real leadership skills.

Either way, I've made a conscious decision here to only support technologies and causes that have long-term visions for the future that are both aspirational and clearly defined. Real projects with real tech is hard to find because hype tends to muddy the waters, but they are there if you do your research and look hard enough. If you're on the same wavelength here, let's keep in touch.

P.S. In case you weren't aware, your investments will be taxed only when you decide to cash out. If you just HODL or do a dollar-cost-averaging thing there's nothing you really have to worry about.

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Fascinating. That's never come up for me because so far Nigeria doesn't care about crypto and definitely not Steem. That said, clearly the forces of regulation are closing in on crypto all over the world.

Also, interesting observation about how the money can so easily change your mindset. Losing it hurts more than previously not having had it in the first place ever did. Suddenly, the desire to do whatever to keep it, to narrow your focus to "me me me" becomes quite strong and you find yourself going from liberal to libertarian if you don't watch out.

Yep, but it did strengthen my belief that regulations are quite necessary, even in crypto, to keep some of our lesser impulses in check. It's nothing personal folks -- as human beings, we're all flawed in one way or another.

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Keep it up!
All the best!

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This is definitely motivation for me I just started getting into cryto and so far I love it I swear I cant even sleep because of the potential !

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great content

thank you friend is very nice information