is it necessary to report gambling winnings via bitcoin on Taxes?

Question

Anyone have insight on this? I would think you would have to.

KC_4_LIFE · Answer

Anyone have insight on this? I would think you would have to.

tjabroni · Answer

The IRS answer is yes. The reality is, crypto is unregulated, and would be nearly impossible to track / determine your winnings without a third-party reporting your winnings.

Once you convert Bitcoin to USD and put into a bank though, it may trigger red flags.

KC_4_LIFE · Answer

This is my understanding as well. Thank you for the response, this is definitely a gray area.

redtear2989 · Answer

Depends which bitcoin wallet you&#x27;re using. I know coinbase reports to the irs

smacksmiter · Answer

The key is to just use Coinbase as an intro into the market. Always deposit through a wallet you only use with them and never do any significant trading with Coinbase, just move the funds through them to other exchanges.

Of course, you don't have to do your trading through any exchange at all if you want. There are places where you can trade directly with other people and avoid all of that exchange tracking...

But the real point is the IRS truly doesn't have a clue what is going on in crypto and doesn't have the resources to track any small time trader....this is also true of regular taxes...

Unless you are big enough to get on their radar, they really don't have time for messing with you...

They are literally using computers and equipment from the 80s and 90s in many cases...if the public only knew...

KC_4_LIFE · Answer

isn&#x2019;t there an amount requirement though? I thought under 20K went unreported from coinbase but I&#x2019;m not sure.

sharkscore · Answer

last time I checked coinbase is required to report of gains of $20k or more. like everyone said it is unregulated and I doubt you would get in trouble with small deposits to your bank, but if you have more than $10k deposits throughout the year it might get flagged. The likelihood of you getting an audit is slim to none, the IRS is understaffed as it is

fluffybucker69 · Answer

I&#x27;ve withdrawn a solid 20-30k through coinbase the past year.  I wasn&#x27;t aware it gets reported until later last year.  The thing is though they can&#x27;t track how much you&#x27;re losing.  Bitcoin got raped last year.  If you&#x27;re purchasing bitcoin through other mediums of exchange and losing there and withdrawing some via coinbase they can&#x27;t tell what you&#x27;re actually profiting which makes taxes complicated.  It&#x27;s like if you play poker and all they see is the cashouts, but not the deposits.   What if I withdrew 20k to my bank, but bought in with 70k and blew that off?  Obviously I wouldn&#x27;t have to pay taxes.  That&#x27;s the grey area.

wheremychooz · Answer

Bro this is why you use bitcoin atm to cash out.. f a bank account that defeats the whole purpose of what crypto was meant for..

japa · Answer

Anything that is considered Income is eligible to be taxed. Hence the term Income Tax.

Whether or not the Feds might be aware of all Income sources for an individual is a different matter

since not everything gets W-2'd, 1099'd, etc.

Wendubs · Answer

The IRS is the last Federal entity you want on your bad side...I know first hand, via my brother's father-in-law. Dude spent a year in the workhouse for being behind with them and he was no big player...they took his retirement and paid for house because of what was owed and the Penalties on top of it. The Penalties are outlandish and a good Attorney can't guarantee they'll negotiate.

Pay the flipping taxes and keep them happy.

What will your defense be if they audit you and take you to court? "This Covers thread proves why I didn't pay?"

GET REAL

is it necessary to report gambling winnings via bitcoin on Taxes?

Hot Forum Topics