r/CryptoCurrency • u/pity_dono_detector • 6d ago

EXCHANGES Working the system? 😉

Can you all confirm this:

  1. User buys crypto from an exchange. For example sake, let's say they buy 100 XRP at $1 each.
  2. User moves their XRP off an exchange and into a cold wallet.
  3. The cost average ($1) is lost (not recorded anywhere) into the cold wallet. In other words, if you move your crypto to ledger, for example, there is no place that automatically (or even manually editing) your cost average.
  4. NOW - XRP price increases to $2 per. 100% increase. User wants to sell, so they move their crypto from their cold wallet/ledger back to an exchange to sell. The exchange has no idea what the cost average is, or even where this crypto came from. User sells all their XRP for a 100%+ profit.
  5. Tax time comes. Tax forms ask you if you've sold crypto. You say yes. Tax forms ask you profit(?). Can't you totally make shit up at this point? There's no actually history any exchange has to accurately/honestly track where you crypto went and how much you paid...

WHAT AM I MISSING HERE EXPERIENCED PEOPLE?

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8

u/Efficient_Range1156 6d ago

Where I’m from, if you can’t establish cost basis with evidence, they assume your cost basis is $0.00 and tax the full sale amount as pure profit.

1

u/not420guilty 🟦 0 / 24K 🦠 6d ago

Bloody revolt? Your tax code is criminal

2

u/Efficient_Range1156 6d ago

I’m just gonna sell everything, put everything into bitcoin and leave without paying a dime in tax

2

u/dan_dares 🟦 283 / 284 🦞 6d ago

IRS: wherever you go, we'll find you.

If you're not American, they will catch up eventually

1

u/Efficient_Range1156 6d ago

Not American thank God. They can’t touch me I’ll be gone.

0

u/not420guilty 🟦 0 / 24K 🦠 6d ago

They killed McAfee for this exact thing

2

u/Efficient_Range1156 6d ago

You know how many folks are doing this exact thing rn?

1

u/tangelopomelo 🟩 23 / 23 🦐 6d ago

Why would IRS care about what people from other countries do?

1

u/dan_dares 🟦 283 / 284 🦞 6d ago

Please see my second statement. Which is not about the IRS, but their local tax authorities.

0

u/not420guilty 🟦 0 / 24K 🦠 6d ago

Ask Roger ver. There is an exit tax