Quote:
Originally Posted by Skillet83
This is a literal cash generating machine.
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Cash in crypto, or USD cash? It's my understanding that all of these cryptos are very difficult to convert back into dollars, and then (legally) have to be declared as a capital gain on the tax returns. On this year's return, there is a question as to whether you have invested in crypto over the previous period. That would probably be a big audit flag for the future, I would think?
As I understand it, the reason the NFTs were so popular is because they were paid for in crypto currencies that couldn't easily be converted to US dollars (also without generating a taxable event). It remains to be seen if a purchase in Bitcoin (of an NFT or any tangible object) would be a taxable event.
PayPal sat (and still does) in this grey area for a long time as it is not a bank, but acts like one. I can't recall what PayPal reports to the IRS - distributions (withdrawals?) either...
-Wayne