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Crypto Taxes with @TheCryptoCPA
Recorded: April 9, 2025 Duration: 1:03:42Space Recording
Short Summary
As the tax filing deadline approaches, crypto enthusiasts are increasingly aware of their tax obligations, with discussions highlighting the importance of understanding capital gains, the implications of spending crypto, and the necessity of using tax software to navigate complex reporting requirements.
Full Transcription
Thank you. Hello, everyone.
Thanks for coming to the space about everyone's favorite topic in the entire world, which is taxes.
This is pertinent because taxes are due in six days, I think, in the U.S., which is great, especially with how the economy is going and how much liquid money everyone
is sure to have currently to pay their taxes.
So what a time.
So yeah, basically, I started getting interested in this space in about 2021.
By the space, I mean getting interested in crypto taxes and educating about crypto taxes
because in 2021 I got completely wrecked by crypto taxes
because I sold NFTs and sold them in Ethereum
and didn't know that when I received that Ethereum
I had to pay taxes on the price of Ethereum at that time that I got it. I thought I had to only
pay when I sold. And because of that, I owed a lot of money to the government, which I
did not have. So I had to sell my Ethereum at a pretty sizable loss to get that money
to send to the government. And it was pretty painful. So I don't want other people to have that same pain.
So knowing more about crypto taxes and being educated about it,
unlike I was, is a good thing.
So that you feel the pain the whole way and not just at the end of the year
when you realize you owe a ton of money.
So Shian is here, Shian is with CoinTracker and I think you usually have a spiel that
So Shiana's here.
Shiana's with CoinTracker.
you like to start with about the five things that you want everyone to know about crypto
taxes.
So I'll let you take it away.
Sure.
Hey Billy, thanks for hosting this space and thanks everybody for joining.
So as Billy mentioned, yeah, tax filing deadline is coming up pretty soon.
It's April 15th.
So if you haven't filed your crypto taxes, this is the time to do it.
So yeah, let me start with like, I guess, five situations where you have to worry about crypto taxes. So if you went through any of these five situations in 2024, that means you have to file additional
tax forms with the IRS this tax season.
So situation number one, so pretty self-explanatory, that's like you cashing out.
So if you had, if you bought a Bitcoin for 80,000 and sold it for 100,000
in 2024, you got to pay taxes on the $20,000 of capital gains. So that's pretty self-explanatory.
I don't think there's confusion there. I think the second situation is when you go from one coin
to another, you could be going from Bitcoin to Ethereum or Ethereum to something else.
And in that case, if that first coin has appreciated in value, you still have to pay taxes, even
though you're not realizing any cash in hand.
So something to keep in mind, because a lot of people get into that trouble.
They're thinking that they're just going from one coin to another, not realizing any cash,
and therefore they don't have to pay any taxes but but according to the tax rules you sometimes you have to
uh especially if that first coin has appreciated in value at the time you're converting it to the
second coin uh the third situation is um when you spend cryptocurrency for goods and services
When you spend cryptocurrency for goods and services, that could trigger a taxable event.
Say, you know, you bought a Tesla or something else using Bitcoin or any other coin that has appreciated.
That triggers a capital gain tax event, even though, again, you're not realizing any cash in hand.
The fourth situation is when you earn cryptocurrency. So you can earn cryptocurrency
through like various means like mining income, staking income, rewards or even wages. In those
cases you had to pay taxes based on the fair market value of the coin that you receive. And
then last but not least, sometimes you can get these free coins through
like airdrops and hard forks. So if you get these free coins, and if those free coins have any value
at the time you're receiving it, there's a taxable event and you have to report them accordingly
to the IRS. So remember those five situations. And if you had any of those five situations back in
2024, that means you have a crypto-specific tax filing obligation coming up by April 15th.
Yep, and that is soon. That is extremely soon. So yeah, one of the things I am working with CoinTracker currently,
so the link up on top, if you have a lot of crypto trades in your wallet, you can use CoinTracker
to track everything and find the cost basis of your trades to make it a lot easier for you.
So that's just something throughout there, but basically,
for those events where something happens,
you've traded crypto,
you've sold it,
you've,
moved it from one type of coin to another,
or you're getting airdrops or other things that she had mentioned,
you'll need to pay taxes on it.
And,
yeah, to, and anything to make to make it easier is something that's been
helpful for me, so that's why I've
partnered with them
so yeah, for this space
people, if you'd like to
ask questions
please request, and Shian is
available for the next, I guess
until the end of the hour
to help answer questions, I also
have a number of questions that I pre-compiled from asking
before that we can go over.
But it looks like we do have some requests currently.
So let's get perpetual motion up here.
Perpetual motion, you've been oh, you're still connecting.
We've been giving a lot of hearts,
so I'm assuming you have some questions.
Some questions for you on about crypto taxes.
Yeah, I do.
So recently, back in January,
I had swapped 10 Ethereum,
and I did restaking, right, 10 Ethereum.
I swapped it, and then you get the gist, though.
I tried full porting in memes, and I lost it all. And I swapped it and then you get the gist though, I tried full porting
of memes and I lost it all. And I thought it was true that even if I don't use it this year,
I can write off unrealized losses or whatever that is over one year. Like,
doesn't it just extend for the rest of my life? So even if I keep losing money,
can I just keep writing it off if I have gains or is that not true?
This is a good question. Yeah. So a couple of things.
So it seems like, you know, you had this transaction in 2025.
So that means it's not relevant to this filing system.
I found that. I'm just saying 2025.
Go ahead.
Yeah.
So this is how capital losses work, right?
So if you have, let's say, I'll take some numbers. So
let's say you had a capital loss of like $10,000 and nothing else. Out of that $10,000, you can only
claim $3,000 in a given year. And the remaining 7,000, it gets carried forward to future years.
And in those future years, if you have any gains you can use those seven thousand dollars to
offset the gains um so hopefully that answers but again the the key is that you cannot write
off unrealized losses you you had to realize it uh meaning you had to sell the coin or whatever
at a loss to realize the losses otherwise Otherwise, you cannot take the loss.
Yeah, so it's good if you had... I think there are services, actually.
If you had bought some NFT back in the day
and now it's completely illiquid
and you have a 12 Ethereum loss on it,
I think there's a way to sell it to people for nothing.
But once you sell it to somebody, then you can actually realize that loss.
But if you just have it, I don't think you can realize that loss.
Is that correct, Shion?
Yeah. So yeah, it has to be realized.
So the realization event happens when you sell it to somebody at, you know,
at, at whatever the market value. So, I mean, in some cases with some of these
NFTs, it could be like, I don't know, like a cent or something like that,
but it has to happen.
There has to be an exchange of something for you to realize that loss.
Yeah. So yeah.
I guess a question that I've gotten multiple times in my asks are about, I think it's called wash trading, where people sell like Ethereum.
Let's say they bought it at $3,000, they sell it today for $1,400, and then they just rebuy Ethereum again right afterwards.
Is that something, I think that was like a loophole that people have mentioned, but is that something that's still you're able to do with crypto or is that something that's been closed?
Yeah, so, okay, so let me explain what a wash sale is.
A wash sale happens when you sell something at a loss and buy back the same thing within 30 days uh like for example if you were to do that
in like stocks by the way a lot of stocks are at a loss right now so i'm pretty sure a lot of people
are selling at a loss if if you if you can if you don't want to wait so let's say you know you have
a google stuff like 100 bucks and uh now it's at 70 bucks. You can sell it at 70
and realize a 30 dollar loss. But if you buy back the Google stock without waiting 30 days,
IRS is not allowing you to deduct that 30 dollar loss because they're like, you know, you just sold
it to just like artificially harvest
that $30 loss and increase your refund. So that's kind of like their logic. Now that's in the stock
space. Now in the crypto space, crypto is not subject to that wash sale rule. So theoretically,
going back to example, Billy, like you can sell your Ethereum, which you bought for 3000, but now for 1400, you could like, you know, sell it at 1400, realize the losses, buy it back without waiting that 30 day period because it's not subject to the wash sale rule.
Now, that said, if you do that in an abusive way, IRS could still come up to you and say, hey, like, you know, you're just doing it to like artificially rack up all the losses.
Therefore, we're going to disallow that.
So what that means is like, you know, crypto is not subject to the worst share rule, but
I would recommend like you waiting like at least like a reasonable period of time.
It doesn't have to be 30 days, maybe a day or two to realize the loss. And
if you want to buy back the same coin, just do it like after waiting for like several
days. So that way it looks more like a real transaction and it does not look like a transaction
you're doing to like artificially rack up these losses for tax purposes.
Gotcha. Okay. So the IRS does not want to see you do things that look directly like you're just trying to rack up losses so you can take advantage of the system, which makes sense.
I guess another thing I would say about people who are asking about this wash trading or how it applies to crypto or doesn't apply to crypto, I think there's usually a, what's it called?
There's a gap between how much it costs to buy
and how much it costs to sell.
I forget the term for that.
But I think if you sold your Ethereum at 1,400,
if you wanted to buy it, it'd be like 1,480.
So you're going to lose on that.
And then if you just do it right away then the IRS
might come after you so not the best
idea
in my opinion but that's
up to everybody and their own
personal ideas
of what they want to do with their money
let's get
Kokoro up here
Kokoro up here
Kokoro how's it going oh and sorry perpetual perpetual did did that answer your questions do you have any more yeah but my phone is crashing I'm gonna leave
and then we come back one second can you repromote me or no yeah just just just
request again because I have some other questions but of course let other people
speak you know is I'm not the only person with questions oh no worries yeah if you have questions just come back
and we'll get you back i'm gonna come back in one second let me just close that reopen it okay cool
hey kokoro how's it going
uh yeah i think kokoro kokoro Isn't Kokoro like heart in Japanese?
It's spelled incorrectly.
I think it's with a K.
All right, let's get Asiya up here.
Asiya, how's it going?
Hey, pretty good.
How are you?
Doing great with the economy.
It's just roaring.
Everything's wonderful.
Just can't wait to look at my balances and do taxes.
Awesome.
Yeah, I had a quick question for you guys.
I was wondering, what is the most common mistake,
Shehan, that you see people making?
Common mistake, I think there's a lot. I think still, I would say there's a lot of people who think that crypto is completely invisible from the IRS and other regulators.
So that's a mistake because there are a lot of ways, you know, crypto is visible to the IRS. There are certain exchanges that are reporting your activity
to the IRS. And IRS has these tools like chain analysis and et cetera that kind of help them
trace transactions to people. And the other thing is everything that we do is on the blockchain.
If you go to Public Explorer, you can copy paste your address and it kind of shows everything
in an immutable ledger.
But still, despite these, a lot of people think that they don't have to file any crypto taxes because it's invisible or anonymous and that's not the case. I would say another mistake would be
just trying to do everything manually. I think it's possible if you just have like, you know, one exchange and you don't have any like, you know,
stuff going in and out of that exchange.
But whenever you have like multiple exchanges and wallets
and, you know, DeFi activity and transfers in and out,
it becomes virtually impossible for you
to kind of do these transactions
and figure out gains and losses manually.
So not using like a crypto tech software could also be like a pitfall that we see.
So Jose, those are the two things that I've seen.
Yeah, I think I had 60 something thousand transactions.
And so doing that manually,
I don't know how long that would take, but it would be most of the year, I would have suspected, for myself.
So yeah, that's definitely an issue.
Yeah, that was a great question.
I had that as one of my backup random questions also.
So thanks for asking it.
We got back at Perpetual.
You're back up here if you wanted to ask anything.
No, you can let other people talk.
I said my first thing.
I don't want to eat the whole time.
And it's recorded too, so I don't want to go crazy on here.
No, please go crazy actually because we don't have anyone else up yet.
I don't know. He mentioned stocks.
I actually trade stocks on Robinhood.
You've seen it's down bad three separate times in a year.
But I've never, to be honest, filed for taxes just because in a year I have not made money.
If you take a look at my Robinhood, it pumps ridiculously.
And then in a trade or a week, we go to zero because I do options and data and then same-day
contracts and then Robin Hood banned me from day trades because I abused it and
I was just wondering was that even legal cuz dude like I need to get this shit
straight well I don't think it's legal to not pay taxes but I'm just saying
because I mean well yeah I revenue. Oh, you just haven't had to because you haven't made it.
Got it, got it, got it.
Well, yeah, I mean, look, it seems like you have like capital losses coming from these option trades.
So, I mean, if you don't report those losses, actually, you're just like, I mean, you're just losing out, right?
Because if you have those losses, you can reduce your other income, like your W-2 income,
and you can also carry forward those losses to future years.
So when you make money from stocks in next year, you can reduce your taxes that way.
So is it illegal not to report your capital losses?
No, but you're missing out by not reporting those losses to the IRS.
No, I'm not saying I'm never going to do it.
It's just like, what's the rush?
Because clearly there's more losses than gains.
So what is the rush?
The rush is like whenever you make those losses, like you had to report those losses in that year, right?
You cannot just like wait until future years and like report losses at once.
You just have to do it like every year.
I legitimately did not know that.
I said this earlier.
I thought you could just randomly do it.
Say like, oh, 10 years ago, I lost X amount of money.
Nope.
No, I think it has to be a return.
I wasted like three, four, five years.
Really?
Can you amend a return though?
Like old returns?
You could.
I mean, you could consider like amending and kind of like, you know, reporting your losses.
So you kind of like, like that way, like IRS knows that,
okay, that year you had that much of losses.
But I would, I would just talk to CPA because like,
for example, like you don't want to amend a return,
like let's say 2019 return today and say that,
oh, oh my God, I forgot to report
like million dollars worth of losses,
right? Because that's kind of like a- Everyone should do that actually, just all your old
returns. It's like when I go bowling sometimes and I do horrible and I just like change all
the things to a strike. I'm like, yeah, I got to figure out a game, shut up.
Yeah. So you have to be careful, but it is doable. Just talk to your CPA, especially when it comes to amending returns.
Yeah, I think it's easiest if you have losses.
Robinhood gives you the documents right there,
so you just throw it in with your taxes, essentially.
If you have TurboTax or whatever, you can just chuck in,
and it'll do everything for you.
So I think it's a good idea.
In Robinhood, you can sell crypto also
and buy crypto and all of that stuff will be...
I believe they'll give you some document
for all that stuff.
So if you do all your trading within Robinhood,
it's actually relatively easy,
but you still should do it.
Even if you have losses, you should do it.
Especially if you have losses,
you should do it actually
because then you'll be able to offset that with,
presumably at some point in life, we'll have gains again.
All right.
Let's get Slacker up here.
Hey, Slacker, how's it going?
Yeah, yeah.
Oh, sorry, I was transitioning.
Hey, how's it going?
Thanks for having me up.
It's me with the big tax problem going on.
Not problem, but massive confusion um so i have
another question i talked to you last time and um here's a question so the tax function in my
contract when it reaches a threshold it releases ethereum to both tax wallets but it also adds
liquidity so when i take that liquidity i break it and then I add it to other assets, whether that be lower or whatever.
So how does that work? If you know, if you don't, I understand. I'm just curious on that.
Yeah, it's like I think I remember you from the last session as well.
I had to look, it seems like you have like a, as I remember, like you have like a business, you know, you, you raise some funds and stuff like that.
I had to look into your business.
It's hard to give you an answer here, unfortunately.
I know, man, it's, it's complicated.
Well, how do you feel about this?
Because how do you feel about people putting their wallets in, in trust, like a real trust,
like, like, like as a, like as a holding company right you start a holding
company on your name let's just call it uh whatever tax tax company 101 holding company
and then you put that wallet under under that holding company under another trust
are you familiar with doing stuff like that have you heard of people doing that uh what's your goal
that uh what's your goal listen man i'm not going to get deep into this i appreciate you
into this but uh i started this a long time ago and and i didn't do it for money but i've operated
it like a business you understand so my theory was when i set the taxes, that those were revenue streams.
And I operated it every day for almost 900 days like that.
And I've never taken any profits.
And I've lost money, not just from crypto, but in my real life.
You know what I mean?
So this is as close, in my opinion, and this is my opinion, and I don't care what anybody says.
This is as close as you're going to get to some novel business where this can be translated into the future you know what
I mean this is this is like some we're in the middle of change right we're in the middle of
economic change so I've operated it in good faith with no regulation I've always done the right
thing by investors and how I've operated you know what mean? So it's a real business as if you were opening a hotel.
It just has a real use, like the token itself is a use case.
You know what I mean?
It works.
Everything, it's been built for three years.
But like, you know what I mean?
I haven't registered anything as a business yet because I've been working on it.
Because I didn't know exactly how to go about it, nor did I have any funds to really do
this and or time. So this is this is as if it's a real business or and I'm really leaning towards
I'm really leaning towards I've always been going to do this, but it's probably going to be
like the first business LLC, whatever thing I do is I'm going to open a holding company, man,
and I'm going to put all this stuff under trust. Because I talked to some other people
and I've always been interested in trust
and how they work
because that's what all the wealthy people do.
Even the banks, they put their stuff in trust.
Are you interested in
the advice for taxes related to that
or just if this is a good idea?
Yeah, dude.
I have a lot of transactions, bro.
I have a lot of transactions on wallets man and
they're all a lot of specifically for the last three years they're related to this and obviously
other crypto transactions but there's a lot of transactions here man and there's a lot going on
and there's a lot that's been going on so like I I mean I'm just trying to gauge man because I
really think I need lawyers I think I need a lot of people to really look at this because I just think it's really novel
because my end goal is to whatever happens, man, to all markets will like,
to take these funds because of what I did for the last three years
and to build a real business and get people real jobs.
You know, like people should have been doing it and said it still feels funny.
So that's always been one part of it.
I didn't build this thing for money.
It's just how things have developed and
how things happen. So my real questions are related to taxes because I, because
you can't like, you can't even tell me, right? So like, that's my, that's a
concern of mine. And I think I'm just sitting in some weird spot because nobody
really, anybody who's ever had a tax token, they don't last or they scammed or
whatever. Like I've really run this legitimately so i'm just just trying to figure it out but i mean i understand if you don't
understand it's very complicated i know how complicated it is with all the regulations
but it's definitely related to taxes and and i hope it helps people in the future whatever's
going on me so people you know it just seems like the tax thing it like crypto spaces isn't regulated
and the irs is taking advantage of taxing crypto people.
You know what I mean?
So it's like we're in this weird spot, I feel like.
I'm not like, I've always paid my taxes.
I'm not that guy.
I definitely agree that taxes on crypto are really annoying and confusing, which is why we want to do the space,
crypto are really annoying and confusing
which is why we want
to do the space but also just
have
some idea of
what to do in certain situations.
It does sound like your situation
really
needs a tax professional to look at
it closely
that we can't really do in this
space just because
it's very complicated.
Yeah, I know. Thanks, man.
Appreciate you having me, Alpro, always.
Yeah, but yeah, good luck.
And I hope
it's, you know,
if you're not making any money, I hope
you don't have to owe a bunch of taxes from, like,
random transactions and stuff because it's
silly in my opinion. It's all good,
man. I don't really care.
Dude, I don't care about the money.
And I'm not trying to be up here talking about my project.
You know what I mean?
I don't really care.
You know what I mean?
I don't care about the money.
I'm trying to figure it out.
That's all.
And I was just, you know.
So thanks for having me up, dude.
And I fucking love you guys.
Sorry to get the curse, but thanks again.
And I appreciate you trying to help.
I don't know how to say, Sheehan.
Thank you, man. I appreciate you. And I'm probably going to use your CoinTr't know how to say, Shihan, thank you, man.
I appreciate you. And I'm probably going to use your CoinTracker app, but thanks for having me on.
Yeah.
Thanks for coming up.
Let's see what we have.
Can I just say something real quick now that he's gone?
You can add something to that. I just want to say something real quick.
Yeah.
I just think this is a good space, and, you know,
the reason why I'm bringing up the issues with my taxes is because, like, I told you I legitimately have issues and I'm actually just not reporting it.
So, I mean, if whatever CoinTrack or Sheehan or whatever is willing, we can set it up in both the Robinhood and in the Coinbase because, dude, a nigga is down bad.
I don't mean to swear. I'm just saying I'm down bad. I am down bad.
I don't mean to swear.
I'm just saying I'm down bad.
I am down bad.
Well, yeah, I mean, again, in your case, if you have lost money, make sure to report that to the IRS so that in the eventual magic future where we actually make gains, you don't have to pay taxes on those gains up to the point of where you lost money.
I'm not saying I don't have gains. It's just I'm focusing on the down bad
because we're all down bad.
That's what we need to focus on.
Nobody's here to brag in this space.
Not at the moment, no.
Okay, so Sian, I had a question about...
Actually, I had this question multiple times,
and maybe it was even last time,
but it was about the chances of no capital gains on crypto in the future
and what you thought of that in general.
Yeah, so we keep hearing that.
I feel like these are talking points and mostly rumors.
I haven't seen any official documentation that even, not even like a draft,
that say that something like this could happen. So so yeah i mean that that's where it is and if you guys have seen any official
documentation i would i would love to see it yeah my my personal opinion is believe it when you see
it and don't like count on it like don't plan around it uh i would plan by paying taxes on the years that i know that
there's taxes for and not like imagine in the future that there's definitely going to be a
world where we don't have capital gains taxes because uh yeah it's we haven't seen it and it's
not written down anywhere and there's no plan in place that I can tell other than people saying stuff. So that's my opinion as well. Just like it's a great talking point but until we actually
see it just don't plan around it. I had another question that said are crypto taxes applicable
to all or is there a threshold before you get taxed? It is applicable to all transactions
and there's no threshold.
Technically speaking, even if you have a $1 worth of gain,
you technically had to report that
and pay you a fair share of taxes.
So yeah, right now there's no threshold.
Yeah, I think it's just like any other asset,
where if you hold it for less than a year and you sell it,
if you had any gains, it's just considered income
rather than long-term gains.
And then if you hold it for more than a year,
it's long-term gains.
At least that's how I understand it.
But yeah, it's just money so treat it like
most other things
I actually had a question
related to
I guess harvesting losses
there are short term
losses and long term losses
do you know if the
long term losses can't apply to short term the long-term losses can't apply to short-term gains
and vice versa or can both apply to both? So you can offset simple as you can offset
like those two different buckets of losses with each other. The technical answer is this. So
whenever you had to do this whole calculation there's this
thing called like a netting procedure so first you had to offset your short-term gains with
short-term losses and then then you had to offset your long-term gains with long-term losses and if
there's a loss still remaining and there's a gain, then you can kind of offset those gains with each other.
So that's the ordering that IRS wants you to follow.
And obviously, if you're using like a tax filing software, this thing happens like in the background.
Okay, gotcha.
So basically, if you have long-term losses, then they offset against long-term gains first.
Correct.
Before you can offset the short-term gains,
which might be more beneficial for you.
Correct.
Yep.
Got it.
Awesome.
Let's see.
So there's another question about services
that don't have an extremely low limit on transit.
So this is more about someone asking how to manage their crypto taxes.
They don't want to pay more for the service than they have in crypto value,
which I assume if you have like under $100 in crypto,
if you have like under a hundred dollars in crypto I don't know how much you would really
need to calculate I don't have you have an answer for that for people who have like very low amounts
of crypto but they want to make sure they're doing their taxes correctly yeah I mean look I mean if
you have like less than hundred dollars worth of like gain or loss I I mean, I want to say that you should probably be able to
calculate your gains like manually, or maybe you did all your transactions in like one
platform like Robinhood and Robinhood kind of reports that information to you.
So yeah, so I don't see a situation where like you have100 worth of gains, but you had 1,000 transactions.
Then there's something wrong, if that's the case.
Well, I don't know. I don't know about that. I think that's very possible nowadays.
much with a lot of
transactions that are
off, like in your own
wallet rather than
on Robinhood or on
Coinbase or something like that.
That's an interesting
problem.
Let's get
Jay up here.
Spin, spin, spin.
How's your day going, Shihan?
It's better than yesterday.
Market is green.
I don't know for how long.
It's green.
It is green, actually.
It was green yesterday in the morning, too.
I was excited for a little bit.
Oh, nice.
It is green.
I don't know.
Watch Guru is saying President Trump authorizes a 90-day pause on tariffs.
I don't know.
Maybe it's true.
I haven't seen the source yet.
Oh, wait, really?
Wait, hang on.
I'm going to actually look at this if this is...
Oh my God!
Everything is shot up.
Okay.
Yeah, we'll see if this is one of those fake outs again.
But I guess we'll have to check after this basis about why everything went crazy.
I think I know why.
I think it's because Trump got elected and he's the same guy who launched the crypto in January.
I think the whole market is bullish.
Yeah, we swing sometimes, but still, dude, if the president is launching it, we're bullish.
This is the greater market, so I would assume it's something tariff-related.
No, sorry, my bad, my bad, my bad.
100%, though.
I'm just saying, like, geopolitically, you're right, though, yes.
Let's see.
We got...
Aix.
Aix, I guess Jay couldn't connect.
Aix, how's it going?
Hey, thanks for letting me up, y'all.
Long-time listener, first-time speaker.
Thanks, y'all.
Okay, what's your question?
No question, I'd just like to interject with my expertise being in this space for so long.
So continue.
Okay, well, let's bring it up.
I guess I did have one question, if that's alright.
We'll see.
I'm having the Remove from Speakers button in my sights, but go ahead.
Okay, don't worry.
Don't be thrown off by the voice.
We're all here together.
My question is, this is kind of reminiscent to me,
at least, this crypto crash,
of the 2022 crypto crash
and where the Fed increased the interest rates.
Kind of similar to the tariff situation.
So my question for this esteemed group of speakers is,
is this recent crash an opportunity?
Or is crypto dead again?
Well, this is a space about taxes rather than whether or not we have any idea of the market's going to do any good.
Fortunately, I can't answer that question.
Well, crap.
I am hoisted by my own petard.
All right.
Have a good one, sir.
Wait.
I love you. Thank you. We brought up a hi up here hi what's
your question hey how's it going guys yeah so my question is revolving digital assets like nfts
and stuff like that are you able to claim those um losses on the coin tracker yeah if you bought
an nft and if you sell it at a loss, that is a capital loss, and you can use CoinTracker to calculate it and generate the forms and file it to the IRS.
Awesome. Sounds like this application is very promising. I'm interested. In general, it depends on if you've done a ton of NFT trades.
If you've done quite a few NFT trades like I had done in the past,
something that calculates all the different cost bases and stuff is very helpful.
If it's just one, you might not need a tool, but it depends on what you're doing.
Oh man, I wish I lost on only one. That'd be fantastic.
Yeah, that's probably a lot of people from 2021 trading.
Let's see.
I appreciate that.
Yeah.
I got Maximilian up here.
Hey, GM, GM, can you hear me okay?
Yes, we can hear you.
Oh, fantastic.
Okay.
So thank you so much for having this space.
I feel seen like my prayers
have been answered and I'm definitely go back and listen to the recording. I want to thank everyone
who's sharing your knowledge and your time. Thank you so much. So my question is, it's actually a
two-part question. Question number one, and apologize if you've already covered this, but I know that I haven't done any proper formatting of like I'm organizing.
So let me just stop by saying I'm a crypto artist.
So I spend a lot of money on buying different currencies because I'm using it to like launch art and you know that kind of thing so I
have so many wallets so many probably even more than than maybe the average person who really
loves crypto so and I spend a lot experimentally I'm always devving around and doing stuff so
so my stuff is really scattered and I want to get it together in a way that makes sense. But I also want to educate myself. But also I'm a bit of a hacker mindset.
So I'm not trying to master the whole ecosystem. But where's a good place to start for me as a crypto entrepreneur?
Where's a good place to start to educate myself so that I can come up with a good system to stay organized with my wallets and my collections, because the only way that I can think of is like it seems so archaic to like create a brief like a profile for each of my collections.
Because like I do look at each of my collections like its own brand because they each have all those same needs.
And eventually each could stand on its own and be its own like entity.
And eventually each could stand on its own and be its own like entity.
So I do treat them separately.
But if there's a place that I could start something that I should read or a podcast I should follow, could you please let me know?
My pen is ready to write down whatever you say.
Yeah, sure.
I'm glad that you're kind of thinking about this right now, I would say if you Google like crypto tax guide 2025 by
CoinTracker, that would be a good place for you to start because it kind of explains like
everything in layman terms, what you need to know, what to avoid and etc.
So I would take a look at that.
And if you have like a lot of wallets and exchanges, I would consider opening like a
CoinTracker account and kind of aggregate everything in CoinTracker so you can keep
track of them and figure out the gains and losses and kind of do your business taxes.
Yeah, I think it's really difficult when you have a lot of different wallets and a lot of
different tokens kind of scattered all over the place
i know my my personal accountant uh basically was like hey with the new um what was it it's
like there's new rules or guidelines coming out about um which wallets you or the timing
tracking yeah yeah maybe it's something like that. But he basically was like,
hey, consolidate everything into one place
would be your best bet.
So I went and moved everything
that I had into Coinbase after that.
So I only have one wallet.
Are you talking about your assets?
But I mean, so as an artist,
my wallet is a way to compartmentalize like my different collections and stuff like that.
So, you know, it's not only about like where the assets are living.
Right. But it's also about like if there's a great habit or a practice that I should use to stay organized, maybe something you'd like to see your clients do that nobody ever does.
like to see your clients do that nobody ever does i would love to be that someone
I would love to be that someone.
yeah this kind of goes back to a concept called like wallet hygiene like especially if you're
running like a business um i think if you read the guide i think that's a good starting point
um after that like feel free to reach out to me on dm um i can kind of guide you to like some other
like wallet hygiene related posts and maybe maybe you can follow some of those practices.
I appreciate the question.
Let's see, let's get the unhuman.
Yes, the unhuman.
Hello, the unhuman. the unhuman how's it going
oh no oh hey good morning good morning
I would just like to ask how does tariffs affect crypto prices like they are it's not stock market that you know supply chains and
all that how how is the crypto market affected because of tariffs of you mean just like what
causes the crypto market to go up and down yeah like is it anywhere related to the tariffs that
trump is imposing how is it related like directly the tariffs that Trump is imposing? How is it related, like directly, proportional, inversely, or anything like that?
I mean, the way I understand and how to understand these markets, there is just people buying and selling or bots buying and selling or institutions buying and selling.
So there's an agreed upon price, which people buy and agreed upon price which people sell and then that's
kind of what you get in the market.
So the crypto market is a much more speculative market.
It's almost entirely people's faith that these things will have value and go up in a certain
way and some minor amount of actual utility which I don't know the price
is mostly comes from speculation as far as I can see so yeah it's yeah go ahead yeah no just to add
to Billy's point what tariffs are doing right now is it's adding uncertainty into the market, right?
So whenever there's uncertainty in the market, investors, they want to move away from like
risk on assets like stocks and cryptocurrency to like more safer assets like bonds.
So that's why we see like people are like removing liquidity out of the stocks and crypto
and putting that
liquidity into bonds.
And just now, maybe like half an hour ago, there was a news saying that tariffs will
be paused for like 90 days.
Now the markets are going up because all that bond money is coming into risk on assets like
tariffs and stocks.
So this fundamental thing is that it's just like this tariff story affecting how people are making investment decisions.
And that's what drives the prices, you know, ups and downs.
Yeah.
I mean, people will say things like, you know, Bitcoin's a hedge for blah, blah, blah, or
whatever.
But the way that the markets have reacted historically is just that crypto is a risk
asset um and actually kind of follows tech a little bit in terms of like whether or not things
are risky but yeah this is getting into the weeds of like stuff that i don't know anything about and
that you shouldn't listen to any financial advice from anybody uh specifically but you know do do
your own research on this stuff but yeah, if you follow the markets long enough,
you'll kind of see patterns.
And at the moment, crypto seems to follow the market
in a lot of ways.
Let's see.
Yeah, we got Jay again.
Jay, are you able to talk this time? No, no, Jay. Hey, how's it going? Oh, Jay,
you're here. Yay. How's it going? Spaces glitch out sometimes. I appreciate it. No problem.
Just very quickly. My question is more about mining. How do miners manage their crypto tax?
Good question.
Yeah, good question. So mining income is taxed as regular income when you earn those mining rewards.
So tactically speaking, what miners do is they would have like, you know, I don't know, one or two mining wallets. They can connect those mining wallets to Cointracker
and then Cointracker can calculate the income
every time you receive mining rewards into your wallet.
So that's generally how miners
kind of take care of their crypto taxes.
Yeah, it's basically whatever the exact price is
at the moment when you mine it and get it into your wallet, that's the tax burden that you have.
So, yeah, I think I did a lot of mining back in 2013 when none of this stuff was worth anything.
So, yeah.
So, luckily I didn't have to pay much tax on that,
but I will when I sell that stuff
as long-term capital gains.
Does that make sense?
Or did Jay...
Oh, Jay dropped.
Alright.
I'll bring JetLin back here.
JetLin, how's it going?
JetLin! Jetlin back here. Jetlin, how's it going? Jetlin.
Hi, Billy.
How are you?
Hey, how's it going?
Going well so far.
I'm not upset about this market.
I cannot be upset about this market. I cannot be upset about this market.
Oh, today seems good.
Yeah, yeah, it is. I always actually enjoyed this space when you talk about this space. And thank you to Shannon Sheehan, right?
Sheehan, for giving us all the knowledges, actually.
I haven't spoke to you for a long time, all right?
I haven't joined in your space for a long time, but I have a couple questions, actually.
And the first one is that is tariff is going to affect the crypto very badly or it's not?
I think she had answered that earlier, just kind of with crypto being a risk asset.
Some people might put money into Bitcoin and think that this is a safe haven if tariffs are going to cause dollar destabilization or something like that.
And some people aren't. So I think you'll just kind of see volatility and ups and downs.
I see. So one of the thing is that I do have some cryptos, but I don't use for anything else.
It's just I'm holding into the account.
Is it going to be a big thing in future for centralizing and using people just like a dollars?
Or is it just for fun?
We are having it.
I don't know.
It depends on which coin that you're holding right i mean from a tax point of view
there's nothing for you to worry about because you're just hodling um hopefully whatever the
coins that you're holding it's gonna appreciate in value because that coin finds use cases or
more people gonna buy it in the future so from a a tax point of view, there's nothing for you to worry about.
And I hope your coins, you know, go up in value.
Yeah, in my opinion,
it will really help unlock crypto
if there's not a whole bunch of complicated tax stuff
on tiny transactions.
So you can actually use it for buying things
without having to worry that
every single time you make a transaction, you have to calculate the basis that you got it for and the basis that you're use it for buying things without having to worry that every single time you make a transaction,
you have to calculate the basis that you got it for and the basis that you're selling it for
and which percent piece was what you bought it for at a certain time.
Because that's really annoying.
But in our current world, without all those regulations,
the nicest thing to do is just to buy and hold and not worry about all this tax stuff
because it's kind of complicated.
Oh, thank you.
And are we allowed to use them some places or people are already accepting cryptos?
I don't see anything in my neighborhood.
Yeah, you probably won't see it in your neighborhood but there are places that accept crypto i mean even like tesla accepted uh doge for some items and stuff like that
uh so it's it's i don't know if i would say it's growing because it it goes in waves kind of like
how crypto always goes in waves but i've personally seen some places accept crypto i think in new york
uh there's a place that accepts dogecoin, like a pizza place that I've heard of.
But again, if you use those services from a tax perspective, if you bought the Doge for $0.04 and then you're buying a pizza for $3 when Doge was at $0.12, then you have to pay the difference as a gain to the tax man, or at least keep track of that.
Right.
And, you know, I realized that, like, in the back, when Bitcoin was very low and people bought things by Bitcoin, probably.
I'm not sure they bought it or not, but they used the Bitcoin or gave it to someone,
say, for instance, even a $10 Bitcoin.
Now that $10 Bitcoin is worth a lot of money.
So when I was thinking of that point, and I'm realizing that maybe it's not a good idea
to give anybody the crypto.
Those cryptos might be very valuable someday.
Who knows?
Right?
I was just thinking of that.
It's just up to you.
I don't know if you have any additional comments.
Yeah, I mean, it's up to you.
I mean, personally, I see Bitcoin as a store of value, as an investment.
So I'm not a fan of like spending my Bitcoin,
but that's just me, but yeah, it's up to you.
But if you gift someone crypto,
that's not a taxable event, right?
Yeah, that's right.
So it's a good thing to kind of touch on.
Yeah, you can gift a crypto like Bitcoin
or any other coin to other,
like unlimited number of people
and you don't have to pay any taxes uh and if it is less than uh i believe 19 000 you don't even have to
report that to the irs so oh that's nice yeah yeah so if you want to you know give to relatives or
whatever for christmas who won't appreciate it you can can be like, hey, I got you some cryptocurrency,
and they'll be like, thanks.
Unless it's worth a ton of money later,
or if it's worth a ton of money later,
they probably won't even think about you.
They'll just be like, oh, yeah, I'm so rich now.
Woo-hoo.
Right.
I gave millions of Dogecoin to my family.
You gave millions of Dogecoin to your family?
For Christmas.
Dogecoin.
Oh, my God.
The Dogecoin, actually. And the Shibas.
And it was fun to give it to them and then teach them what is what kind of thing.
It was fun. It's not a problem.
To give millions of them, they would be in pretty good shape right now.
I know.
And then, so other thing is that somebody was talking about that like to buy crypto and so many different wallet or account they have, different crypto platform they use.
Is it a good idea to do that?
Or do you guys have something because you guys are very knowledgeable about this?
Do you want it to put in a certain account
that you don't have to think about
too many accounts to deal with?
Or do you have some specific crypto platform
that you use?
It has better values
or does better for you and safer?
I have a lot of opinions on this, but if you want to take this first.
Yeah. I mean, it depends on, on, on, on you, right?
Your goals and et cetera. I mean, I'll, I'll share like my,
my personal view on this. I think you should have two,
at least two accounts, right? So one account,
like account or wallet where you kind of keep your crypto for the
long long term like you don't touch it so that could be like a ledger wallet like like a hardware
type of thing uh and then the second wallet or exchange that you can keep like i don't know it
depends depending on your net worth and everything like like that's kind of like your hot wallet
right you know like you probably want to use that wallet to like send people gifts and then
buy stuff and et cetera. So I would have just, yeah,
like one wallet or exchange for long-term and then the other one for like
short-term and just like daily, daily stuff.
My personal opinion is if you're just buying it to hold it,
I would use something like Coinbase
or Robinhood or whatever,
like one of those established places
where you just buy it and don't have to think about it.
But everything's a risk.
So even if you have it on Coinbase,
Coinbase can go belly up and, you know,
like FTX went belly up, right?
You can not gain anything from it.
Not to say that Coinbase will.
It's been around for 10 something years,
but it's just like it's not FDIC insured.
It's all a risk.
So it's just one of those things where
if you're not doing anything with it
other than buying it and just having it as an asset,
I personally would put it with every other asset that you have.
If you're doing a lot of trading and stuff,
or you want to hold it and you don't trust anything but your own ability to
remember your, your, your seed phrase or whatever,
then you can have your own wallet and do it like that.
But there's no place to put your money where it's perfectly safe.
You have to rely on either yourself or people not hacking you or,
you not clicking on nefarious links,
you know,
that these businesses will be around in X amount of years.
historically the space has been very treacherous and,
you know,
it's,
it's kind of your risk, your potential reward or not.
Right. Do you know what it is? I found it when I, I don't understand too much of this wallet
as part of it and then keeping in the like a Coinbase normal account. What's the big difference between those two,
putting in the wallet and putting in the normal account?
What is the difference between that?
There's a phrase called your keys,
or not your keys, not your crypto,
which was very popular in the early days of cryptocurrency,
which basically said that
if you aren't holding your own tokens and coins in your own wallet that you know
the the key to and no one else has access to if you don't do that then it's not yours technically
it's uh and at that time um a lot of the exchanges uh got ftx a lot of them a lot of them went down
this is back in like 2013 2014 when I was first in the space.
It has gotten somewhat better, but bringing up FTX for the third time, this stuff has
happened where people have lost their money by keeping it on exchanges or on other businesses
to have it.
So it's nice to just have your own keys and have it for those sakes.
So it's nice to just have your own keys and have it for those sakes.
But I've also had friends who have their own keys and have their wallets under some kind of password protection and encryption.
And then they can't remember their passwords.
So they've lost a lot of money that way, too.
Exactly. I did the same thing.
Yeah, so there's plenty of ways to lose your money in this space.
And yeah, that's a whole other topic than taxes.
But if you just lose your money, I don't think that's tax writable is that is that true shihan if you just if you just
lock up your your crypto in a wallet that you forget the password that that's right it's just
like you know you you know you lost your like you know physical wallet with hundred dollars like
in it like there's no write-off like that's's your negligence. So there's nothing you can do to get any tax benefit, just a personal loss.
Do you know what happened that the Coinbase, they had this wallet thing. So I said, Okay,
great, then maybe I can put it in there all of my money. So I didn't do the all of it,
just put a half of it. And I believe that it was
a Dogecoin and Shiba and a few other things were there. So I posted there and then they have so
many password and what is called this two-factor identification and all those things. And then
it has so much complication, unbelievable. And I wrote it down everything very carefully.
And still, when I tried to go there and I said, oh, this is wrong, that is wrong.
And I'm so frustrated about that.
I'm still trying, trying my best to get in there.
But I don't know.
You need to work with one of their support people.
If you have money there, it's still, I think, under your name legally.
So you should be able to retrieve it somehow.
Is that right?
I think so.
I'm not sure. Does that make sense sense i'm not sure to be honest i'm gonna try though i'll do the tax spaces
i don't know anything beyond well actually i don't know anything about taxes either so
right and then then go to the crypto.com and same thing they're always forcing me to go for the
two-factor identification yeah
and i don't do that and they lock me out it's a good it's a good idea to do two-factor
authentication for any of this stuff because i don't remember you don't want people
well two-factor authentication you just need to keep your same phone number for the for the most
part yeah but yeah it's a it's all it. I have one more question for you guys.
Okay, this will be the last question because we're at the top of our.
I appreciate that, your time.
And that is the one thing is that mining things.
I don't understand nothing about the mining things, do you know?
People are always asking to go in it.
What is all about this mining things?
And how does it tax- wise, how does it work?
So I know we are almost out of time, so I'll be very concise with my answer.
So mining is the way that new cryptocurrency, like the proof of work type of cryptocurrency, enters into circulation.
So whenever you mine something, you get these like freshly minted like you know coins and and that
is considered income at the time you're receiving it so that is a tax implication
and the last is be careful like you know there are a lot of scams like in this phase like if
do your due diligence before you join anything right the like fake mining things are one of the largest scams that I've seen pretty commonly.
There's like real ways to mine and there's these like weird things you can add to your
browser that pretend to mine and actually just take all your stuff.
So be really careful.
Just like the old coins do the mining like a Dogecoin or Bitcoin? Everything does something like staking or mining.
They're slightly different in execution, but in tax purposes they're the same.
Where if you stake or if you mine and you get some money in your wallet,
then you have to pay taxes on that value at the time.
Let's wrap up real quick.
So, Shion, is there any last bits of things you want to say?
Yeah, so real quick.
So April 15th, like next Tuesday, the tax filing deadline.
If you had any crypto-related swaps, trades, or anything like that,
make sure you use CoinTracker to figure out your gains and losses
and file your taxes on time so you don't get penalized by the IRS.
Yeah, and my final thing to wrap it up is,
you can see posted up there,
since I'm working with Cointracker right now,
if you'd like to use Cointracker or you're curious about it,
you can use the code BillyM2K and you'll get 20% off
for the first time to use it. If you
have a whole bunch of transactions in your wallet
I recommend it because
if I didn't use it
before I would have no idea
where to start because it's so
so much
paperwork to do.
So yeah, thanks so much, Sihan, for
coming and
talking to everybody about taxes.
And thank you all for listening and some really great questions.
So I appreciate it a lot.
And until next time, good luck with everyone's taxes.
And let's see why the market went crazy.
See you.
All right, bye, everyone.
Until next time. Thank you.
