Cryptocurrencies

[Jamo]

With tax return season coming up, now I just need to work out how to report this...

Yeah, same. According to advice on bitFlyer (https://bitflyer.jp/digital-currency-tax/capital-gain), it should be taxed as either income or capital gain (flat 20%?), depending on the individual's purpose for making the sale.

[adamu]

Yeah I real that article, but it doesn't help you do the calculations. I was planning on just printing off all the data and taking it to the tax office.

I'm not sure how to do the calculations. We could calculate the tax per sale, in a similar way to a tax-reporting account at a broker. Or we could do it when we withdrw JPY from the trading account. But in the latter case, it's not clear how much of the transfer represents gain/income/loss, so maybe it's going to have to be per-trade...

edit: I need to fix my spellchecker...

[Jamo]

Yeah I real that article, but it doesn't help you do the calculations. I was planning on just printing off all the data and taking it to the tax office.

It's worth a shot, those guys seem to love paperwork

I'm not sure how to do the calculations. We could calculate the tax per sale, in a similar way to a tax-reporting account at a broker. Or we could do it when we withdrw JPY from the trading account. But in the latter case, it's not clear how much of the transfer represents gain/income/loss, so maybe it's going to have to be per-trade...

My guess would be tax per trade. Yen is yen, whether or not it's in the trading account or your personal account

Something I'm unsure about is, say for example I buy 2 btc at two different prices. Then I sell at a different, higher price. Which btc is sold? Can this be controlled? The same goes for shares.

[adamu]

Something I'm unsure about is, say for example I buy 2 btc at two different prices. Then I sell at a different, higher price. Which btc is sold? Can this be controlled? The same goes for shares.

I think you would have to calcualte the profit for 1btc at the first price, and 1btc at the second price. For people that make multiple trades a day, this must get unmanagable very quickly...

[Jamo]

I think you would have to calcualte the profit for 1btc at the first price, and 1btc at the second price. For people that make multiple trades a day, this must get unmanagable very quickly...

So what if I only sell one of my two btc? Calculate the average of the profits?

[adamu]

I have no idea...

[RetireJapan]

I think my Rakuten account takes the average purchase price when selling. That would make it manageable to calculate at least. Be interesting to see what the tax office say

[Jamo]

I did a bit of searching and found a couple of ways that can be used to calculate gains/losses for multiple purchases/sales of the same currency or stock: FIFO (first-in, first-out) and ACB (adjusted cost base). ACB appears to be the most appropriate so I decided to go with it to calculate my gains and losses from here on, using a spreadsheet. I'll see what the tax office has to say when I hand it in - I don't have that many transactions, at the moment...

As the name suggests, ACB involves adjusting the basic cost after each transaction, so you always have an adjusted cost in order to calculate a gain/loss.

There's an explanation of how to do it here: https://www.adjustedcostbase.ca/blog/ho ... tal-gains/

[plumenator]

I'm interested in knowing the tax implications too. What happens if I miss the deadline to pay tax on my capital gains? Can I pay them next year?

[Jamo]

I'm interested in knowing the tax implications too. What happens if I miss the deadline to pay tax on my capital gains? Can I pay them next year?

I'm sure there would be some way to. But you may incur a fee... Not sure.