Aren't all of those conversions taxable events?

Regarding GDAX in particular, in my experience they are not charging for outgoing transfers of BTC. Could save a step in the process. I do usually convert to LTC when possible, if there's a transfer fee.

Technically yes, but it would probably vary widely with daytrading tax laws. You would owe on selling the bitcoin for usd and then get a deduction for buying ltc. I’m not an expert on tax laws but they seem kind of archaic and nonsensical when applied to this process.

What?

As to archaic and nonsensical - No one ever said tax law (or any law) had to make sense. Doesn't mean you don't have to pay.

Well it's obvious you don't know the first thing about tax law, let alone being an expert.

Everything else about bitcoin is measured in USD, including the entire investing frenzy surrounding it at the moment, seems kinda dumb to pretend that transaction fees are the lone exception because it makes you feel better about how absurdly expensive it is now to move coins.

Another way to think of it: as bitcoin has grown against USD, the amount of bitcoins you would send someone for a transaction has shrunk considerably (or is <item you would pay for with bitcoin> still worth the same number of BTC it was when Bitcoin was ~$20 USD?). So the fee, which itself has probably risen over time as demand for transactions has increased, is now a significantly larger percentage of the average BTC transfer size than it was at lower USD levels.

Please explain it to me then instead of criticizing.

only place i've ever purchased crypto is coinbase, where can i buy BCH and not wait a million years?

I like my fees expressed in %

What about people using pounds, euros, or yen? In fact, USD is not even the predominant currency being used to buy bitcoin.

It isn't that complicated and these rules have been around for many years and did not change with bitcoin. If you are a U.S. citizen it is treated the same as other traditional foreign currency transactions, which means the IRS considers it "property". Gains are measured in USD at current exchange rates at the time of the transactions. It doesn't matter if you trade BTC for ETH and dollars are never involved, it is still a taxable event if you gain value measured in USD. It doesn't matter if you never convert your crypto back to USD, anytime you have a sale where your USD exchange value is higher than when you bought what you are selling, that gain is taxable. Normal short-term and long-term capital gains rates apply.

Yes, you pay Capitol gains when you sell property and then deduct it when you buy something else.

Coinfloor

Tell me more.

Look, I’m not a tax expert. If you are please expound your knowledge.

You should consult a professional, this is not tax advice, but I believe:

Say you buy 100 btc at $100 each ($10k cost basis).

Then you sell 10 btc for 400 eth at BTC = $10k, ETH = $250. You also sell 10 btc for $100k USD.

Later you buy $50k LTC at $250 with USD.

Tax year ends. (BTC = $20k, Eth = $1k, LTC = $500)

Your gains are:
$99k from sale of 10 btc for 400 eth ($1k cost basis, $100k sale proceeds)
$99k from sale of 10 btc for $100k USD.
The LTC purchase is irrelevant for that tax year (what you said about "deducting what you buy" is wrong)

So your gains would be $198k, whether it is a long term or short term capital gain depends on if you held for > 1 year. This can make a pretty big difference depending on what tax bracket you are in.

You would have unrealized gains of:
$1,592,000 on your 80 BTC (1.6MM value, 8k cost basis)
$300k on your ETH ($400k value, $100k cost basis)
$50k on your LTC ($100k value, $50k cost basis)

This assumes you are not a professional trader (They use mark-to-market accounting).

Ok, sure but the original point of the post was how to avoid bitcoin fees. I never said anything about how long anyone had the coin or how much gains they have. I was referencing how to avoid paying a large fee on smaller transactions.

If you’re going to send bitcoin to an exchange and exchange it anyways you would still pay the gains either way. If you’re just now buying bitcoin and want to send it to ACR or an exchange just buy ltc and send that instead. My point still stands before I was picked apart by the nits.

It’s also worth mentioning that if you’re doing any type of trading like you have listed you should def be a professional trader or form an S Corp.

All of this tax stuff also reinforces me to HODL

Transferring bitcoin wouldn't be a taxable event. Claiming that you should realize gains to avoid transaction fees is what got the "nits" on to you. I'd also like to point out that this had been explained in the thread multiple times and you were telling others to stop asking "dumb" questions when the answers are in the thread. At least it wasn't giving out the worst possible advice imaginable.

The whole entire thing was in reference to new traders and hodlers for smaller transactions. You guys started talking about tax and large sums on gains. At no point was I ever referencing anything close to that or giving tax advice.

Taxes with regards to selling your primary residence and buying another one are a lot lot different.

If I sell apple stock for a 50k profit and turn around and use that 50k to buy stock in coke I pay captial gains taxes on the 50 k profit -i have nothing to deduct with regards to buying stock in coke.

50k is now my cost basis for my stock in coke if/when I sell it.

If I bought 1000 iota coins at 1 dollar and sold it at 4 dollars I'd pay cap gains taxes on 3k profit.
Where it gets messy is you have to convert it to btc or eth first.so technically I'd be buying and snap selling Bitcoin at the same price but you should probably file for both transactions with the btc cost basis and sale price being the same.

I think a lot of people who are trading coins for other coins are going to owe a lot more money in taxes than they expect when they get audited in a few years bc they tehcncially should constantly be paying short term captial gains rates on all of these transactions.

Me:new guys you should do this to avoid paying 20, 30, 50 per xfer on $100
Nits: that’s taxable!
Me: yeah maybe but there are ways to deduct it, not exactly sure how it works. It’s comlicated.
Nits: omg you’re so wrong, while still giving no information.

You weren't being picked apart by nits-you stated something that was dead wring about taxes that could cost people a ton of money if they listened (selling one coin and deducting the price of another coin you purchase)

Yes it’s complicated, there are different tax brackets longer term holders. That’s for sure worth letting people know they need a professional but idk why it applies to new people trying to send small amounts from coinbase.

this presumably means you sell btc (for ltc) and take gains on btc. Don't see what you don't understand about that. If it's a small amount it could maybe be worth it? Is that what you were trying to say? If so that's a very narrow use case that applies to very few people here, if any.