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Guidance on taking profits

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Hi,

I don’t have a lot of savings overall, but some of what I have is in BTC and has gotten to a point I would like to potentially take a little out to handle some expenses.

I’m in the US and mostly purchased via Coinbase, but also have Gemini and Binance US accounts as there were a couple alts at the time I foolishly chased that were not available on CB.

My funds are on hardware wallets now. If I wanted to take a little out next bull run to handle some life expenses- what is the best approach to pay what I need in fees and taxes to stay legal but not more. If I transfer it back to Coinbase they have fees to convert BTC back to fiat, then pay capital gains tax using FIFO is that all their is to it?

I’ve been using Cointracker and Koinly but neither are 100% accurate as when I was younger and goofing around when I was like 16-17 I bought a bunch of alts that went nowhere, got scammed a few times along the way, lost money in Celsius and BlockFi that each paid back via PayPal, bought a couple small things online with BTC just to see if I could, did a little mining from my laptop, straight up screwed up and lost BTC while learning how it all works— essentially a big mess. Past couple years I used those apps to kinda guesstimate what to pay in taxes but know they are not 100%. It was under the idea of “just do your best to figure it out and pay something” to keep the IRS from putting a microscope on you.

So I am trying to pay due tax when I take a little out, and figured worse case scenario I should do fifo from here out just in case and pay max tax so if ever audited I won’t someday get spanked with a big past due tax bill of in trouble of any kind tax wise. That said, I got a smidge early like 2017 when I was just a kid experimenting and it’s worth a decent amount more now and paying tax on that gain kinda sucks so just want to make sure I’m not missing the boat and doing this foolishly in a way that I’m leaving too much $ on the table.

What is the lower cost legal way to DCA out a smidge here and there along the way? Or is my plan to transfer back to Coinbase and just pay the tax on the gains based on what koinly says ok despite it not being 100% accurate?

If the IRS ever wants to audit me I’d like to be in a position to say I did everything I could to pay what I thought was right and not be screwed. Not looking to be a target.

Thanks all

submitted by /u/MiS33k4Knowledge
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