Crypto Stablecoins (USDC, BUSD, USDT) (2 Viewers)

[Tonysquander]

OK so I did some research and kind of answered my own questions on the tax reporting side. Article below gives the basics. If you’re in the US and are considering going this route for payment, make sure you keep track of everything.

https://www.nerdwallet.com/article/investing/bitcoin-taxes

 

[Mike mac]

I've never heard of this wallet before. A quick google search shows that it's a wallet for XRP?

i was under the impression that it was built by or with ripple labs (xrp) but now im hearing it isnt>? i have a ledger, sould be using that anyway, just wondered if anyone knew anymore about it.

 

[yeahfkyeah]

OK so I did some research and kind of answered my own questions on the tax reporting side. Article below gives the basics. If you’re in the US and are considering going this route for payment, make sure you keep track of everything.

https://www.nerdwallet.com/article/investing/bitcoin-taxes

It's true that you would need to pay taxes on gains, but you won't have any gains on a stable coin. The value will be the same when you sell it as it was when you bought it. You WILL need to pay income tax for USDC sent to you, but for exchanging USD to USDC and sending it you shouldn't have tax implications.

 

[Carnth]

So if I’m reading this right, transactions involving buying and selling coins, even if it’s USDC, which is tagged to the dollar and unlikely to make any profit or loss either way, are required to be reported and need to be kept track of and disclosed on your tax return? I was starting to like the idea of this method of payment but not if I need to do a bunch of paperwork later just because I bought some poker chips.

Disclaimer: I am not a lawyer. I am not a CPA. Consult one for yourself.

If you deposit 10k from your bank on Coinbase, convert to USDC for free, test it by sending it to your friends, get the 10k USDC back and sell it back, and put it in your bank account... is there any profit or loss? If not, why would it need to be reported to the IRS?

If you buy 50k of gold bars, the price goes up, sell them for $60k, that's 10k of profit that needs to be reported to the IRS.

Same thing for virtual currencies. If you make a profit or loss, it needs to be reported.

In my 10k USDC example, it's possible that the IRS could look and only notice the withdraw from Coinbase to your bank. They may ask "where did this 10k come from?" Then you can show them the prior deposit of 10k from your bank to Coinbase, that evens it out.
Then they look at you like you're crazy and say "so you just sent 10k to your friends, they sent it around to each other. Then back to you, and then you just put it back in your bank account?"
And you, excited—your left eye twitches, reply "Yeah! Isn't that great?"
Then they give you this look the whole time you're explaining everything.

So yeah, keeping a few records is good. Coinbase is also very good at keeping deposit and withdraw records too. They can even download spreadsheets with custom dates and everything to help you with reporting if it becomes necessary.

Buy I honestly don't think anyone working strictly in USDC will need to report anything, in much the same way as anyone reports PayPal transactions. Again, I am not a CPA or a lawyer... this is not official advice, consult one for yourself, etc.

 

[Tonysquander]

Disclaimer: I am not a lawyer. I am not a CPA. Consult one for yourself.

If you deposit 10k from your bank on Coinbase, convert to USDC for free, test it by sending it to your friends, get the 10k USDC back and sell it back, and put it in your bank account... is there any profit or loss? If not, why would it need to be reported to the IRS?

If you buy 50k of gold bars, the price goes up, sell them for $60k, that's 10k of profit that needs to be reported to the IRS.

Same thing for virtual currencies. If you make a profit or loss, it needs to be reported.

In my 10k USDC example, it's possible that the IRS could look and only notice the withdraw from Coinbase to your bank. They may ask "where did this 10k come from?" Then you can show them the prior deposit of 10k from your bank to Coinbase, that evens it out.
Then they look at you like you're crazy and say "so you just sent 10k to your friends, they sent it around to each other. Then back to you, and then you just put it back in your bank account?"
And you, excited—your left eye twitches, reply "Yeah! Isn't that great?"
Then they give you this look the whole time you're explaining everything.

So yeah, keeping a few records is good. Coinbase is also very good at keeping deposit and withdraw records too. They can even download spreadsheets with custom dates and everything to help you with reporting if it becomes necessary.

Buy I honestly don't think anyone working strictly in USDC will need to report anything, in much the same way as anyone reports PayPal transactions. Again, I am not a CPA or a lawyer... this is not official advice, consult one for yourself, etc.

Based on what I saw the income tax form will ask if you bought or sold any crypto. If yes, you then have to fill out another form to discuss profit or loss. Obviously if you’re just doing it to buy these chips, then you make zero profit amd there are no taxes to pay but you still do have to fill out forms at the end of the year. People need to know that. If you did have transactions and answer no just because you did not make any profit, and get caught, well you just broke the law by filing a false tax return. The way the coin base and USDC is being described, you will be buying and selling crypto even if only for a short period if time and will have to report it or run the risk of getting caught. The reason I’m asking these questions and looking into it is that I and other people need to know what they are getting into. One of the reasons PayPal is falling into disfavor is because of the whole fear of 1099K reporting. If that problem is not solved by Coinbase payments then it’s kind of a wash in my mind or PayPal is ahead because there’s nothing on my IRS form asking me if I made a PayPal or Zelle payment to anyone.

 

[Tonysquander]

Also, that is just from the buyer's perspective. If I am the seller and receive payment in USDC that I convert to cash and put in the bank account, I could be wrong, but if reported as required how does that payment not look like 100% profit from big brother's perspective? Then, I still have to go through the whole exercise of documenting costs of goods sold versus payment received to parse out what, if anything, is profit which seems to defeat the whole purpose of trying to go around PP for fear of having to do 1099k reporting. Not trying to derail the thread or dissuade the use of the USDC for payment, but I think these are issues that everyone needs to have a clear understanding of going into this since a lot of folks, myself included, don't know much about it.

Why would the transactions need to be reported? Apparently because they are required to be reported regardless of profit or loss. Speaking for myself only, I would not be comfortable rolling the dice and not reporting something and just hoping I didn't get caught.

 

[kk405]

Based on what I saw the income tax form will ask if you bought or sold any crypto. If yes, you then have to fill out another form to discuss profit or loss. Obviously if you’re just doing it to buy these chips, then you make zero profit amd there are no taxes to pay but you still do have to fill out forms at the end of the year. People need to know that. If you did have transactions and answer no just because you did not make any profit, and get caught, well you just broke the law by filing a false tax return. The way the coin base and USDC is being described, you will be buying and selling crypto even if only for a short period if time and will have to report it or run the risk of getting caught. The reason I’m asking these questions and looking into it is that I and other people need to know what they are getting into. One of the reasons PayPal is falling into disfavor is because of the whole fear of 1099K reporting. If that problem is not solved by Coinbase payments then it’s kind of a wash in my mind or PayPal is ahead because there’s nothing on my IRS form asking me if I made a PayPal or Zelle payment to anyone.

To each their own, and I have no affiliation to Coinbase, not an attorney or tax advisor.

Will you get a form from Coinbase and will the transactions be reported to IRS at year-end? I don't know, but I have multiple accounts at various institutions and they all send one form or another at year-end, to me and the IRS. I have zero problem with it. If I deposit 10K in my Schwab account, am I worried that it will show up in the tax forms they send to me/IRS? no... PayPal may not be requiring you/us to report some transactions (FOR NOW)...but as of a few weeks ago, we got very close to that reporting threshold going all the way down to $600 before they send all your transactions to IRS... will it be resurrected? again, don't know... This is not about hiding transactions or gains (at least not to me)...but this is to facilitate transfers... If PayPal agreed to continue to allow me to send/receive without fear of freezing accounts and holding on to funds for an indefinite period of time (this happens to personal and business accounts, sometimes without any explanation...and they have the else discretion of even closing your accounts without any explanation). I believe USDC, for SOME, could be an interesting/positive way to transfer money between PCFers...

 

[kk405]

And to that extent... to get the ball rolling and help, with the power of network effect ....

I am going to give away another free complete sample set of Tiger Palace chips... 42 chips + DB... anyone who opens a Coinbase (or equivalent) account and does a minimal (could be even $5 or $10) transfer using USDC...send me screenshots....has to be a new account opened as a result of our discussions...if you opened an account two weeks ago...oops

offers ends January 31st...one winner, random drawing on February 1st...

Let's not make this complicated ... @CraigT78 may or may not be eligible ...asks too many questions

 

[Tonysquander]

To each their own, and I have no affiliation to Coinbase, not an attorney or tax advisor.

Will you get a form from Coinbase and will the transactions be reported to IRS at year-end? I don't know, but I have multiple accounts at various institutions and they all send one form or another at year-end, to me and the IRS. I have zero problem with it. If I deposit 10K in my Schwab account, am I worried that it will show up in the tax forms they send to me/IRS? no... PayPal may not be requiring you/us to report some transactions (FOR NOW)...but as of a few weeks ago, we got very close to that reporting threshold going all the way down to $600 before they send all your transactions to IRS... will it be resurrected? again, don't know... This is not about hiding transactions or gains (at least not to me)...but this is to facilitate transfers... If PayPal agreed to continue to allow me to send/receive without fear of freezing accounts and holding on to funds for an indefinite period of time (this happens to personal and business accounts, sometimes without any explanation...and they have the else discretion of even closing your accounts without any explanation). I believe USDC, for SOME, could be an interesting/positive way to transfer money between PCFers...

Apparently the do issue 1099s to the govt. and the user. I hear what you are saying, and I have nothing to hide either. I just want to know in advance if I need to be documenting things, saving receipts and filling out forms to explain my transactions down the road. This is all new territory so I'm trying to wrap my head around it and everything that goes along with it.

https://tokentax.co/blog/does-coinbase-report-to-the-irs

 

[CraigT78]

And to that extent... to get the ball rolling and help, with the power of network effect ....

I am going to give away another free complete sample set of Tiger Palace chips... 42 chips + DB... anyone who opens a Coinbase (or equivalent) account and does a minimal (could be even $5 or $10) transfer using USDC...send me screenshots....has to be a new account opened as a result of our discussions...if you opened an account two weeks ago...oops

offers ends January 31st...one winner, random drawing on February 1st...

Let's not make this complicated ... @CraigT78 may or may not be eligible ...asks too many questions

@kk405 question: What is crypto?

 

[CraigT78]

And to that extent... to get the ball rolling and help, with the power of network effect ....

I am going to give away another free complete sample set of Tiger Palace chips... 42 chips + DB... anyone who opens a Coinbase (or equivalent) account and does a minimal (could be even $5 or $10) transfer using USDC...send me screenshots....has to be a new account opened as a result of our discussions...if you opened an account two weeks ago...oops

offers ends January 31st...one winner, random drawing on February 1st...

Let's not make this complicated ... @CraigT78 may or may not be eligible ...asks too many questions

Follow up question: Is it the new account or the new deposit that has to be done as a result of our conversation count? I opened a coin base account last Superbowl to get my free $15, but never funded it. Would an initial deposit be the criteria for eligibility or am I just screwed?

 

[Carnth]

Apparently the do issue 1099s to the govt. and the user. I hear what you are saying, and I have nothing to hide either. I just want to know in advance if I need to be documenting things, saving receipts and filling out forms to explain my transactions down the road. This is all new territory so I'm trying to wrap my head around it and everything that goes along with it.

https://tokentax.co/blog/does-coinbase-report-to-the-irs

Coinbase does pay interest on USDC held in your account (a feature which can be turned on or off). This is why they would issue a 1099. Turn the interest off to avoid a 1099... or don't keep USDC in your account (as recommended).

And like I said, they also have great reports of all your transactions, so they got you covered for reporting everything else.

The IRS is not that interested in people sending money around, they are only interested in getting theirs if you make profits. (Fincen is the one interested in where you send or receive money from.)

The IRS has been the most helpful US government agency concerning virtual currencies. Just have records that show a balance of 0 profit, and you'll be fine.

 

[cpac54]

And to that extent... to get the ball rolling and help, with the power of network effect ....

I am going to give away another free complete sample set of Tiger Palace chips... 42 chips + DB... anyone who opens a Coinbase (or equivalent) account and does a minimal (could be even $5 or $10) transfer using USDC...send me screenshots....has to be a new account opened as a result of our discussions...if you opened an account two weeks ago...oops

offers ends January 31st...one winner, random drawing on February 1st...

Let's not make this complicated ... @CraigT78 may or may not be eligible ...asks too many questions

Dang it, I opened up my coinbase account a couple years back but never did anything with it. Nevertheless, very cool giveaway!

 

[TX_Golf_N_Poker]

Sorry, I started to read this, and I will eventually read it all. But I have a question I want to pose first. I only keep money in my checking account for paying bills. All my other funds are in brokerage accounts. Can I connect this Coinbase account directly to a taxable brokerage account? (not an IRA) I use Fidelity. If not, then I need an extra day to transfer from brokerage account to checking before I can transfer to Coinbase, and I know Ken has stated that payments need to be transacted as soon as possible.

 

[Carnth]

Sorry, I started to read this, and I will eventually read it all. But I have a question I want to pose first. I only keep money in my checking account for paying bills. All my other funds are in brokerage accounts. Can I connect this Coinbase account directly to a taxable brokerage account? (not an IRA) I use Fidelity. If not, then I need an extra day to transfer from brokerage account to checking before I can transfer to Coinbase, and I know Ken has stated that payments need to be transacted as soon as possible.

I can only guess as I have never tried with a brokerage account.

If your brokerage account works like a checking account and can do ACH transfers (which I know some do, or can you use it to fund your PayPal account) then you probably can.

 

[TX_Golf_N_Poker]

Not anymore, coinbase uses Plaid for bank verification so you can buy and transfer instantly. The downside is Plaid is a data company and I effing HATE the access it gets. They can see everything about the the accounts you give it access to. No thanks.

I set up a seperate bank account at a seperate institution just for crypto stuff and that way Plaid can’t see my transactions or assets. If you don’t care about privacy it doesn’t matter but I do.

I am a huge fan of ledger wallets as well. Very secure. The point about blockchain being transparent is a good one. I’d probably receive directly into coinbase then transfer out to ledger for privacy. Do not keep funds on coinbase or any other exchange any longer than necessary. Send to other party or your wallet.

Ugh... Not Plaid again. I've put off giving them access to my account for a couple of my bills that use them. I hate that they are in on this...

 

[navels]

Regarding limits . . .

- Monday: created Coinbase account, linked bank account
- Monday: purchased daily limit of USDC: $1000
- Tuesday: purchased daily limit of USDC: $1000
- Today: my daily limit has dropped to $250 :-|

I applied for a limit increase through the app and was denied.

So it may not be realistic to get something up and viable in time for the tiger sales.

Meanwhile, if someone is available to help me load up via Zelle shoot me a PM

 

[TX_Golf_N_Poker]

Regarding limits . . .

- Monday: created Coinbase account, linked bank account
- Monday: purchased daily limit of USDC: $1000
- Tuesday: purchased daily limit of USDC: $1000
- Today: my daily limit has dropped to $250 :-|

I applied for a limit increase through the app and was denied.

So it may not be realistic to get something up and viable in time for the tiger sales.

Meanwhile, if someone is available to help me load up via Zelle shoot me a PM

Well that blows. I was just about to set up my Coinbase acct right now. Seems like a pretty ridiculous thing to limit usage like that.

 

[navels]

Okay after I wrote that my daily limit increased from $250 to $2K.

One thing I find surprising is that these transfers are supposedly immediately available but so far only $1K has hit my bank account.

 

[TX_Golf_N_Poker]

Okay after I wrote that my daily limit increased from $250 to $2K.

Still, doing it step by step like that is really stupid and not something I really have time for. I'm trying to get on the road today to go to a PCF meetup!!!

I wonder if that Plaid app is looking at your account balance and limiting it due to that for some reason. Do you have the funds in your account to make a much larger transaction?

 

[navels]

LOL my daily limit just increased again to $10K (which btw is more than what I have in the linked account).

 

[TX_Golf_N_Poker]

Not to mention that based on what I'm reading here, I really don't want to keep funds in a Coinbase account. I want to wait and transfer all the funds in immediately before sending funds to Ken.

Has anyone else setting up their account this week encountered this same issue?

 

[Tonysquander]

LOL my daily limit just increased again to $10K (which btw is more than what I have in the linked account).

now that you are in the matrix, “They” are tracking your posts…

 

[navels]

I'm not too worried about Coinbase going busto this week.

 

[navels]

WTF my limit just dropped to $2K/day.

 

[TX_Golf_N_Poker]

Ugh... Not Plaid again. I've put off giving them access to my account for a couple of my bills that use them. I hate that they are in on this...

OK, now I remember why I won't use Plaid. They don't just want the routing and account number. They want my User name and PASSWORD!!! No EFFING WAY! I'm not giving anyone the password to my brokerage account. Nope. I really can't believe any of you are cool with this...

Why can't I just initiate transactions FROM my account INTO Coinbase? Just like I do when I move funds from my brokerage account to my checking account. Why isn't that an option?

So @kk405 what is the NEXT best way to pay you for Tigers?

 

[waddadonk]

OK, now I remember why I won't use Plaid. They don't just want the routing and account number. They want my User name and PASSWORD!!! No EFFING WAY! I'm not giving anyone the password to my brokerage account. Nope. I really can't believe any of you are cool with this...

I don't remember doing this, at what point does it ask for that? This is via coinbase?

 

[TX_Golf_N_Poker]

I don't remember doing this, at what point does it ask for that? This is via coinbase?

Yes. In the setup process of Coinbase.

 

[TX_Golf_N_Poker]

I don't remember doing this, at what point does it ask for that? This is via coinbase?

 

[TX_Golf_N_Poker]

Then here: