I was talking crypto with my brother and remembered reading this insane post a couple years ago, so I went back and found it. Might be relevant for some, entertaining for others. Link to the original post at the bottom.The story goes... During the 2017 bull market, a college student making $12/hour at Barnes & Noble puts $5,000 into GDAX. By December that year, his portfolio is at $880k. So my dude quits selling books and picks out a lambo in his favorite color? Nope. He was chasing a million and never took profits. By January, the market tanks and he's down 85%. But that means he still has $125k, which is a damn good return on $5k (2400%). Story over? Not a chance.When he made his money and when he lost it is very important because this is the Land of the Free. Uncle Sam comes knocking and says you owe $400k in taxes. Since the realized capital gains were made in 2017 and the realized capital losses happened in 2018, he can't use any of those losses to offset gains. He's on the hook for the full amount. The post asks for advice, and the general consensus was to work with the IRS on an Offer in Compromise. Basically, the IRS takes the last $125K and calls it even.It's an unfortunate part of trading, but with the run in Bitcoin and many alts this year, the new (tax) year will be here in 7 days. Who knows what will happen in 2021. Make sure you guys are staying safe and covering yourself for any potential liabilities.TLDR: taxes suckLink to original post with 1099-K: https://ift.tt/37LkGWD
Submitted December 24, 2020 at 01:36PM
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