crypto - cost basis and fair market value for taxes

Oracle mehhh
Jan 6, 2018 10 Comments

Trying to understand the new crypto taxes. Apparently with the new tax reforms, every crypto trade is a taxable event, whether it involves fiat or not. So, to trade alts, one would

1. Buy ETH on gdax - this established cost basis for ETH which is the value of ETH-USD pair on gdax.
2. Transfer eth to binance
3. Trade ETH for ENG - this established selling value of ETH and cost basis for ENG.

Now, if ETH appreciated between buying on gdax and selling on binance, it's considered capital gain and taxable. But how do you determine the selling value of ETH in USD? We can determine price of ETH on gdax since there's a ETH-USD pair, but how would you do it on exchanges with no fiat pairs?

Same quandry for determining the cost basis and fair market value of ENG for the buy and sell events as well.

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TOP 10 Comments
  • Lyft tickets
    It is not considered a taxable event when you exchanged ETH to ENG. It's only taxable when you go to/from Fiat.
    Jan 6, 2018 3
  • And you think the IRS is going to audit these kinds of trades?
    Jan 6, 2018 3
    • IBM fmDG24
      Good thing there's now a public ledger that makes it very easy to audit
      Jan 6, 2018
    • Oracle mehhh
      OP
      Well coinbase was recently ruled to give away profile info of all users who transacted more than 20K USD. And that's not a lot. Even if you just moved 0.5 btc into and out of the exchange 3 times as you were buying altcoins or whatever, you've already exceeded 20k worth of transactions as far as coinbase is concerned. In any case, as much as I hate it in it's new form, I still want to pay whatever I'm due.
      Jan 6, 2018
    • Twitch Blahblah
      If the irs wants the taxes so badly why don't we get better guidance from them?
      Jan 6, 2018
  • New zgBx36
    Pls explain ENG further
    Jan 6, 2018 1
    • Oracle mehhh
      OP
      What about ENG do you want me to explain?
      Jan 6, 2018

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