Cryptocurrencies

[OngBonga]

Individuals need to calculate their gain or loss...

• exchanging tokens for a different type of token

Here's the thing. If I "dispose" of a "token" by trading it for another coin, including $USDT, at the time of the transaction, the "gain or loss" is precisely zero. One bitcoin is worth, say $50k. All I'm doing is trading one item for something else of equal value. Zero profit.

Selling tokens for money is the "final transaction" i was talking of earlier, where you said tax isn't due on withdrawals. Based on what you just posted, yes tax is due on withdrawals, as that amounts to a "disposal".

Profit is coming from appreciation in value. In my case, it's a microappreciation measured in seconds or minutes. I'm buying, then selling at profit, then spending the profit on more coins, then selling, rinse and repeat. These are all transactions where, at the precise time of trade, I am exchanging one asset for something of exactly the same value. If that value changes a few seconds later, that's irrelevant. I'm exploiting that short term differential. But I'm not making "profit" on any one transaction. I'm always breaking even. The profit comes from appreciation, and that profit is only realised when I convert crypto into fiat.

[Keith]

Here's the thing. If I "dispose" of a "token" by trading it for another coin, including $USDT, at the time of the transaction, the "gain or loss" is precisely zero. One bitcoin is worth, say $50k. All I'm doing is trading one item for something else of equal value. Zero profit.

Selling tokens for money is the "final transaction" i was talking of earlier, where you said tax isn't due on withdrawals. Based on what you just posted, yes tax is due on withdrawals, as that amounts to a "disposal".

Profit is coming from appreciation in value. In my case, it's a microappreciation measured in seconds or minutes. I'm buying, then selling at profit, then spending the profit on more coins, then selling, rinse and repeat. These are all transactions where, at the precise time of trade, I am exchanging one asset for something of exactly the same value. If that value changes a few seconds later, that's irrelevant. I'm exploiting that short term differential. But I'm not making "profit" on any one transaction. I'm always breaking even. The profit comes from appreciation, and that profit is only realised when I convert crypto into fiat.

this is the basis of the error you are making .

the profit on a trade is not the difference between what you sell an item for and what you buy the next item for .

the profit on the trade is the difference between what you paid to buy the asset and what you received when you sold the asset.

when you buy a new assets with the proceeds you are setting up a new trade with a new profit/loss when you sell that asset.

your profits are the sum of all the profits for all of the completed trades you have done.

the good news for you though is that the tax year runs april 6 to april 5. if you send in the tax form you have to send it in by sep 30 or if you do it online (usually by an accountant) it has to be in by Jan31st the following year. the online form will give you a printout of how much you have to pay which they have to receive by Jan 31st otherwise they will charge you daily interest on the tax owed.You'll then also be told if you have to make a down payment on the following years tax by july 31st.

[CoccoBill]

your profits are the sum of all the profits for all of the completed trades you have done.

Same here. You pay tax from all of your profitable transactions, not just for some end-of-the-year total. However, the losses at least here are deductible from your CG taxes, I'd assume that's the same there?