[lkbm]

Could the IRS do me a solid and send me what the capital gains on my crypto currency are? I'll pay the taxes--I just don't want to have to calculate the taxes.

I know, I know. Intuit and H&R Block refuse to allow that to happen, but if we could stop prioritizing entrenched industries, that'd be really nice.

[awalton]

> I'll pay the taxes--I just don't want to have to calculate the taxes.

You, me and most everyone else reasonable. In some countries, taxes are as simple as the tax agency sending you a bill or a check. But, America's love of excess capitalism means our tax code is needlessly complicated and pretty much insists on as many third party businesses to be involved as possible - every company you work for, plus anyone holding your securities, plus Intuit or some other tax preparer, and so forth.

The most sensible requirement, since we're not going to get sensible tax reform ever, would be just making legal exchanges operating in the US have to send out a 1099 variant (maybe 1099-MISC could cover it? Or they could create a new one) so people aren't left scratching their heads all the time. But we'll see if that ever happens...

[Rescis]

> But, America's love of excess capitalism means our tax code is needlessly complicated and pretty much insists on as many third party businesses to be involved as possible - every company you work for, plus anyone holding your securities, plus Intuit or some other tax preparer, and so forth.

I don't think it's fair calling this capitalism. Capitalism is the idea the the production of goods is controlled by private entities, whereas what you are talking about is a government over complicating/regulating an industry at the behest of a company. In a capitalist society, regulation is not a thing, whereas in the corporatist society I believe we live in, regulation harms the citizens through capture and reduction in effeciency.

[adventist]

I agree, this isn't capitalism but more like crony capitalism or better yet -- corporatism. Government should not pick winners or losers, much less requiring them.

[user5994461]

In France, taxes are impossible to calculate. Every accountant will give you a different number for a few percents.

If the state didn't give a bill, you couldn't figure out what to pay.

[em3rgent0rdr]

I'm curious to hear more about this. And how much of the population gets their bill prepared by the state?

[otoburb]

>>Could the IRS do me a solid and send me what the capital gains on my crypto currency are? I'll pay the taxes--I just don't want to have to calculate the taxes.

Unlike stocks which seem to be entirely traded on exchanges, bitcoin could have been obtained through mining (unlikely, but possible) or a true person-to-person trade/barter. In order to calculate capital gains, one needs to know the cost-basis (i.e. the price you paid to acquire the asset). If bitcoins are deposited into your Coinbase BTC account, there's no way for Coinbase to know what you paid for them, hence difficult/impossible for them to calculate the capital gains.

[jmalicki]

"Unlike stocks which seem to be entirely traded on exchanges" - no.

You could have bought stock directly from the company, in an IPO or secondary offering (where it does not go through an exchange), from an individual or broker not intermediated by an exchange, etc.

You can keep stock certificates in a safe deposit box, and then later transfer them into your brokerage account, they have no idea what you paid for them.

This is a solved problem, cryptocurrency is not special. If they have the cost basis they can tell you, if not, they can leave it blank.

[otoburb]

Thanks for the clarification. To whit, the few retail equity US and Canadian trading platforms I've used (Schwab's, Interactive Brokers, Scottrade before they became TD Ameritrade, Questrade) also do not provide an explicit feature that purports to calculate capital gains, so Coinbase seems to be exhibiting feature parity with equity retail exchanges. Coinbase and other retail equity trading platforms do provide an easy to calculate gains/losses made from your trades, but as we are both saying, gains/losses shown in the accounts may not necessarily correspond to the actual capital gains at the end of the year in certain situations.

>>This is a solved problem, cryptocurrency is not special. If they have the cost basis they can tell you, if not, they can leave it blank.

We're in agreement - this is a solved problem that the retail investor or their accountant needs to calculate manually via aggregation of the entire lifecycle of the asset(s) to properly account for capital gains (or losses).

[patio11]

To whit, the few retail equity US and Canadian trading platforms I've used (Schwab's, Interactive Brokers, Scottrade before they became TD Ameritrade, Questrade) also do not provide an explicit feature that purports to calculate capital gains

You should probably call the IRS tipline and say "I think [Schwab] isn't filing their 1099-Bs, you know the thing which reports cost bases and short-term/long-term capital gains for retail investors, and accordingly they're on the hook for billions of dollars of penalties, but to keep the math easy just write me a check for a billion dollars rather than what the law actually says you owe me for this hot tip."

Or, in the alternative, you could look again.

[otoburb]

>>Or, in the alternative, you could look again.

I checked again, and you're right. Interactive Brokers is the only platform I still infrequently use but it does have a list of pre-filled tax forms available for download. Worksheet 8949 is also pre-filled, but this is probably where one would need to submit a revised version if previous cost-basis amounts need to be adjusted as in the specific edge cases we're talking about above.

Coinbase seems to have sent 1099-K documents to eligible customers which isn't as detailed as 1099-Bs since I believe the Ks only report gross transaction volumes over $20K[1].

[1] https://www.irs.gov/businesses/understanding-your-1099-k

[jmalicki]

Your memory may be due to this information being new as of 2011 for most brokers.

https://www.irs.gov/businesses/small-businesses-self-employe...

[sbierwagen]

First result for "schwab 1099-B": https://www.schwab.com/public/schwab/investing/retirement_an...

[mcherm]

> To whit, the few retail equity US and Canadian trading platforms I've used (Schwab's, Interactive Brokers, Scottrade before they became TD Ameritrade, Questrade) also do not provide an explicit feature that purports to calculate capital gains

I cannot account for the discrepancy, but I use Charles Schwab, and it absolutely DOES calculate and display capital gains. In cases where I have moved a security into the account (rather than purchasing it directly within the account) I have had to provide original cost basis information for them in order for the calculations to be correct.

[godelski]

Couldn't you use the cost of operation? I figure you could either keep track of it yourself or use a standard depreciation rate on equipment and electricity costs (since probably few people tracked that). Would be like running a business, which you kind of are as a miner. But you do make a point that this is a difficult thing and coinbase can't really track it.

BUT from what I understand, people leave a lot of coins on exchanges and never transfer them back to personal wallets. Coinbase can track that.

[jmalicki]

"Couldn't you use the cost of operation?" - that's pretty inconsistent with other IRS rules... you probably need to convince the IRS you're mining bitcoin as a business with the intent to profit with all the proof that entails, and then it's likely deductible as a business expense, not a cost basis, similar to how margin interest is not part of your cost basis for buying a stock.

See "Basis of Assets" https://www.irs.gov/pub/irs-pdf/p551.pdf and "Investment Income and Expenses" https://www.irs.gov/pub/irs-pdf/p550.pdf

None of that covers cryptocurrency directly yet, but looking at how more traditional investments are treated can inspire you to try to do your taxes in the spirit of the rules to avoid likely problems.

[panarky]

It's the taxpayer's responsibility to substantiate any cost basis greater than zero.

[AboutTheWhisles]

"How much do I owe?"

"How much do you THINK you owe?"

"...Hmm, if I have everything correct, I think I owe this much"

"WRONG! Time for consequences!"

[pembrook]

Time for consequences 2 years later when our system finally processes your return and you've long since forgotten where you put that receipt for an $8 taxi ride.

One of the biggest frustrations of modern life is knowing how efficient and easy things could be if these systems were designed better...and then realizing that nothing will be done about it because entrenched interests hold all the power in American government.

[styfle]

Worst user experience ever

- Comic book guy

[kerng]

This. It could be so simple. Have the IRS suggest what they think I owe - they can have all the metadata, and I'll happily just pay the taxes. If someone doesn't agree, they can do their own return. The current system is so inefficient and wastes a lot of people's time.

[klenwell]

> Have the IRS suggest what they think I owe - they can have all the metadata, and I'll happily just pay the taxes.

What's funny is that they will. After the fact. I got a notice last year from the IRS about some back taxes I owed because I forgot to include some stock I sold in my taxes for that year.

They were right. I had overlooked it. But their figure for what I owed was a little higher than what I calculated it to be. I sent back a revised tax return with a check and an explanation for how I arrived at my number and the matter was closed.

So just to reaffirm: the obstacle is more political than technical.

[skellera]

That creates a one way correction relationship. You will always let them know if you owe them less but never if you owe them more.

[ceejayoz]

I'd imagine there'd be a "do you have unreported income or other unusual situations to disclose" step that'd open you to prosecution if you deliberately omitted stuff. It's not like they wouldn't do audits any more.

[Legogris]

What OP is saying is that it's in the government's to keep things as they are, since if you overestimate your taxes by e.g. missing out on deductions, they won't have to make a correction on that.

[Analemma_]

[citation needed]. The IRS has asked repeatedly to introduce return-free filing, only to be blocked by Congress after their paymasters at Intuit and H&R Block voiced discontent with the possibility of their revenue stream being shut off.

[em3rgent0rdr]

> "they can have all the metadata"

How about instead of big-brother style "hand all your metadata over to the state", that instead the state releases an open-source program you can run that collects & analyzes all your metadata and then produces the bill?

[godelski]

Just a note, but if you don't hold on to them for more than a year then you calculate them like normal income. Long term assets (>= 1 year hold) are calculated at the reduced rate.

But I also agree that you shouldn't have to calculate it. I'm in favor of return free filing.

[agumonkey]

If IRS all over the world would act as a tax assistant instead of pure penalty seeker I'm sure everybody would love it. Wasted energy IMO.

[User23]

The IRS is actually quite helpful, you just have to ask. For example you can request that they give you all the information they have on you. This can make filing or amending old returns significantly easier.

And in my experience at least, their customer service people are courteous and genuinely helpful. It's nothing at all like the standard substandard DMV experience.

Another cool thing is they have an absolutely fantastic record for providing real opportunities (not just busywork) to disabled persons.

[AboutTheWhisles]

In many other countries they do act like that.

[agumonkey]

Ha, surprised, I've seen more prowess in seeking high difficulty tax evasion from small people than help so far.

[cmpxchg]

It's not just Intuit and H&R Block. A lot of us small business owners don't want the IRS knowing every detail of our businesses in order to just magically send us a pre-filled return each year.

The current tax system places responsibility on you, the investor, to tabulate all of your gains and losses, but it also gives you the freedom to invest in complex and unusual transactions like coins in the first place. Don't be so quick to assume you could give up the one without giving up the other, were it not for those pesky TurboTax lobbyists.

[Analemma_]

> A lot of us small business owners don't want the IRS knowing every detail of our businesses in order to just magically send us a pre-filled return each year.

For the 99% of us who aren't small business owners, the IRS already has all our information: my W-2's, 1099's, etc. are already sent there by my employer/bank/broker. Making me do my tax returns anyway is literally useless, just busywork for its own sake.

> The current tax system places responsibility on you, the investor, to tabulate all of your gains and losses, but it also gives you the freedom to invest in complex and unusual transactions like coins in the first place.

As people have explained countless times, letting the IRS compute your returns for you in no way precludes the ability for you to do it yourself, if you desire. That is how it works in every other country - most people just accept the government's return, the people who have complex financials file their own. Stop making the rest of us do pointless work just because of your paranoia.

[s73v3r_]

You're saying that like they don't already know those details.

And your second paragraph makes no sense whatsoever.

[lovich]

That sounds like you're arguing that you want the ability to continue avoiding taxes by not letting the IRS know the whole truth. That's fine, but if I have to pick one entity to extract money from me id rather it go to the government which at least has a tiny chance of benefiting me rather than going to a private company who has no reason to do anything to benefit me

[deelowe]

Odd. The majority of the things I consider crucial to keeping my current standard of living comes from private entities.

That said, pretending the IRS doesn't already know what taxes to collect from you is definitely naive.

[lovich]

The majority of things I Co Sider crucial to keeping my current standard of living comes from private entities as well but that set of private entities is not the same as all private entities.

If my choices were to pay the tax man directly or pay a third party to calculate my tax for me because it's too complicated to do myself in part because of that third entities lobbying, then I am always going to choose to cut out the middle man

Also I agree the the IRS can figure out the taxes you'd need to pay if they ever cared to look at you, but I was responding to the parent comment implying that they shouldn't get more information so that they could go outside the regulations

[chanfest22]

The IRS won't, but tools like https://www.cointracker.io can

[pault]

Are you affiliated with cointracker? I only ask because you've linked to it three times in the comments here, and if you are you should disclose that fact. If you just love the service, no worries!

[detaro]

Given that they submitted their Launch HN, seems like they are a cofounder of it.

[colecut]

Bitcoin.tax seems to work ok at 10% the price. Cointracker is nice but expensive if you really trade.

[lkbm]

I've actually been meaning to look into https://github.com/robertwb/bitcoin-taxes but I'll check cointracker.io -- thanks!

[jjeaff]

I'll calculate my own taxes thank you very much. If big brother doesn't agree, then I'll show my work and sources. Otherwise, the less they know the better.

[zimzam]

Big brother already has all of most people’s tax information. Your taxes have already been withheld (for most employees).

The current system is like having to write your own credit card statement, mail it in to the CC company, and getting penalized if you get it wrong.

[elif]

Having been there, big brother doesn't care to see your work.

They just send you another bill, plus interest.

I think you'd need to get a lawyer for them to even look at your work.

[jjeaff]

No, that's exactly what an audit is. They want to see proof. Sometimes you just need to send a letter to the IRS explaining your reasoning. If they don't agree, and you think you are right, then you should probably get a cpa. If they still don't accept and you want to fight their decision, then get a tax lawyer.

[omni]

Having also been there, this was not my experience. The IRS sent me a bill for $1500 claiming I had taken an early deduction from my IRA. I had, but it was only to correct a mistake I made right before of contributing too much for a given year. I filed paperwork with my brokerage at the time to reflect this, but apparently the IRS didn't get that.

I replied to the bill with the relevant paperwork and a 1 page letter explaining what happened, and the IRS agreed I did not actually owe them anything. No lawyer required.