Anons first Crypto. Post #17
I've been investigating cryptocurrency and the decentralized web since the start of May 2020. This blog is an avenue of documentation and expression of my experience.
So I totally thought crypto to crypto being a taxable event was a absolute meme. I stand corrected, nervous.
Entering the world of cryptocurrency has without a doubt been one of the richest learning curves I've experienced, especially without a traditionally fiscal knowledge background. While I've had a blast, I certainly don't deny I threw myself in the deep end without doing proper doing proper DD. I did not have an entrance plan and I certainly do not have an exit plan in terms of moving gains back into FIAT/Precious metals? Many have suggested an accountant however in my experience tax is a matter of persisting to read the stipulations until you understand why/what you have to pay or what you are owed, that being said you might see a post in a few days "why I just went to an accountant instead" I would not be surprised.
This is certainly a reflective post for my own purposes, however it may serve as a good lesson to new players
Record absolutely everything relevant to a crypto sale, swap or purchase. The time/date, the exchange used, value of the asset you're acquiring or disposing in both your native currency and USD as well as perhaps its equal value in sats? After reviewing the requirements I will try to record a % value of gains/losses at the time of the trade.
My initial records were pretty poor to be perfectly honest, luckily I had only used one exchange and at a minimum recorded dates so I was able to go back and look at the value of what I had bought/sold/traded.
The tax man is unavoidable, come to terms with that and be as upfront as you can, especially if you've suffered losses because they'll offset your future gains! To elaborate I've seen a number of wild suggestions online as to ways to avoid CGT, personally I couldn't deal with the anxiety of it all but at the end of the day its simply not worth it. We may see an eventuality where privacy will become the catalyst for mainstream adoption of cryptocurrency and outright refusal to subject your financial situation to review by any institution, government or individual but until that day, pay your taxes.
I'll leave it there, I wanted to make a quick reflective post as its the start of the new financial year for me, I look forward to looking back to this in a years time to see how well it aged, hopefully I will of learnt a ton and might actually be able to offer actual advice but until then just keep your records and be honest in minecraft; nothing I have ever posted should be considered advice