Capital gains problems (USA)

So as the market shows signs of on the verge of taking off in the next 6 months or so. I wanted to remind everyone on taxes. Even more capital gains and problems they might run into.

​

First in the USA if you hold over 12 months it is counted as long term, and it is taxed way way less. The actual numbers change year to year.

​

Next, it looks at gains and not inflation. This is where the problem comes in. Lets say there is a 5% inflation year over year. And you held for 1 year. Lets say it went up by 4%. You will be in the red because

1. You lost buying power when compared to inflation
2. You are taxed on that 4%. Meaning you actually lost money since during the time you invest it you couldn't touch it. There is a short video that explains this in a ELI5 level https://www.youtube.com/watch?v=DIxxeOpCiT8

BTW 2 is a major reason why many including some political people in the USA want to kill off capital gains tax.

​

Note if you are dealing with staking, reflections, and mining. This is income tax at the time you can use the crypto.

​

Other things to note is previous year loss can deduct from future years BUT ONLY SO MUCH. I think it's $300 or whatever, but this can change year over year. But current year losses can be deducted.

Transfer fees, trading fees, and things like this is deductible.

​

If you got $3m worth of crypto you don't want. Like in the past some scammers sent high value crypto to wallets and the plan was the fee would mean you couldn't actually cash in on that and it would eat your BNB or whatever. So in reality it is worst than worthless. If you don't accept it, then it isn't taxed. Basically, don't use it and don't plan on using it.

​

Note, this is based on memory. I'm not a tax person, and it is always recommended you to talk with a tax person about your situation. So this isn't tax advice.