Now that am starting to buy crypto's I started to wonder about how Crypto and taxes work. I realize that there is a mixed bag about how people feel about paying taxes on cryptos. Personally I'm conflicted about the subject. On one hand, I don't believe my government or any government has the right to impose a tax on something that is supposed to be decentralized. The other hand thinks if cryptos eventually are linked to fiat currency then taxes then the tax could be justified.
This point could be argued back and forth for years and still not agreed upon. There are too many what if's and various scenarios to be discussed and played out before a final ruling could be made on the subject. I would love to see no taxes at all on cryptos but that, I think, would only lead to large companies and the ultra-wealthy further dogging thing taxes forcing the middle class to pony up the rest and defunding important charities and programs the support the poor and disabled alone with funds that build the roads, bridges and other community projects.
I don't know about the rest of the world, but here in American Cryptos are considered "property" and therefore subject to taxes. I may not want to pay more taxes (taxes seem to be growing faster the cost of living) but I also don't want the tax man (I see him/her as a grim reaper pointing their bony finger at me) to show up at my door demanding I pay up, including back taxes, so perhaps it is best to just pay my dues and shut up.
I decided that I should start to track my cryptos buys and trades (along with my Hive rewards). The fact that I am not planning on selling, only buying and holding, seems to be a benefit since purchasing and transferring is not taxable. (although trading coins is) Holding anything over a year is considered a longterm investment and subject to fewer taxes.
As far as I can tell, if I follow the buy and hold plan (which I intend to) all I would have to do when I do decide to sell, is to follow a simple formula:
Total value - original investments - fee's = total capital gains/loss
I should easily be able to track my crypto buys on a spreadsheet. Simple and to the point. Tracking my Hive rewards should be fairly easy as well. Again I am well aware that many crypto enthusiasts will scuff at the idea of paying taxes on cryptos. but better safe than in government debt.
~meditations
