Bitcoin and Taxes

[dualstow]

Totally forgot to report a 2021 purchase I made with bitcoin given to me by Marc on this site once upon a time. Oops. I don't do my own taxes, but I happened to see it on the extra copy of my completed tax return. "Virtual currency." Oops. I'll need to fix that.

[Don]

Totally forgot to report a 2021 purchase I made with bitcoin given to me by Marc on this site once upon a time. Oops. I don't do my own taxes, but I happened to see it on the extra copy of my completed tax return. "Virtual currency." Oops. I'll need to fix that.

I wish that I had your problem, dualstow.

[dualstow]

I know what you mean, Don. Sorry it couldn't be unlocked.
Well, I just received an amended return by email. I guess he wants to take care of it now.

[ochotona]

I got into Bitcoin at $10,500 and Ethereum at $250.

BTC quadrupled on me, so I donated an amount equal to my initial spend to a Fidelity Donor Advised Fund, thereby recovering my original value in a tax-free manner (I get to control where the DAF sends charity donations). So my downside is $0 even if BTC goes to $0. I only have upside. It's like a call option with zero strike that never expires.

I gave away some Ethereum as gifts to my kids. My kids sold the Ethereum near $4000, I bailed at $2500.

I'm still long BTC, but I wonder about the digital gold narrative. I'm liking Jurien Timmer's technology adoption s-curve models. I think if it gets up to $47,000 by the end of 2023 I'm out, because I have to pay attention to IRMAA limits as I get close to Medicare age. Too much of a capital gain and I'll get hit with Medicare premium surcharges.

I feel really sorry for people who got in near the top. That's the FOMO hitting. It makes you crazy.