All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 2
Registered: ‎01-10-2018

CryptoCurrency and Taxes

Didn't know where to go so I thought I would try here hope this is ok. I have a lot of friends who have just heard about Cryptocurrency and they want to get in but it's taking a while for them to get verified or are having trouble getting verified so they want to know if I can buy the currency for them and send it to a hardwallet for them till they get verified. My question is do I have to pay taxes on what I purchase for them and send to there wallet? So say "John" wants me to buy $100 worth of Bitcoin and I buy it for him on my account and then send it to his wallet. I no longer have that bitcoin but it was purchased under my account. How is that tracked as far as taxes go?

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Tax Pro
Posts: 6,039
Registered: ‎02-23-2016

Re: CryptoCurrency and Taxes

Hi Bgblevins,

 

 

 

So in other words you're buying the cryptocurrency and then selling it to your friends at cost.  You only pay tax if you have a gain when you sell or get rid of the currency, so if you don't gain anything you won't owe any tax, but you still have to report the transaction on Form 8949/Schedule D as with any investment instrument.

 

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)