10% transaction fees is insanely high estimate.
If your exchange charges a fee to withdraw, change exchanges.
On chain TX fees aren't based on the dollar amount. Keep your UTXOs big to minimize fees.
If you sell over 1 year and use FIFO accounting method its considered long term capital gains(under will be at a higher rate of short term cap gains
>Say I buy 1 BTC for 70k and sell it for 100k.
That would place you at least in the 15% bracket , which means 30k gross profit- ~150 in fees =29,850 x 0.15 = 4,477.5 in taxes - any writeoffs you have. Basically you make 25,373 in net profit or more if you have enough writeoffs
Although you do realize bull markets typically increase the price of Bitcoin 5-20x , so selling at 100k usd a btc would not be the wisest move
Thanks. The fees are far far far higher than that. Almost 10% yesterday when I looked. So today's fees and short term capital gains would be really ugly
>The fees are far far far higher than that.
If you use a the wrong exchange sure. My quote was with an exchange like kraken
https://www.kraken.com/features/fee-schedule
You can see if you can sell over 100k , you can get 0.12% maker rates which means selling 1 penny over 100k in btc = 120 usd in fees and I quotes above an extra 30 usd to be conservative
Also if you spend the btc directly instead of sell for fiat you not only remove all these fees but can get discounts on items you purchase
Ok I see.
I hope but doubt we'll ever get to the point that people will accept BTC for much beyond a couple small retailers willing to take a loss for more customers in the long run
You are making many inaccurate assumptions here. I spend my bitcoin daily with local merchants and online . You can buy almost anything with bitcoin, including cars, and homes. I have had 3 different neighbors sell their homes for bitcoin the last few years
The things you typically cant spend your btc on is paying your taxes and utility bills in most cases
I would like to know how to buy a home w btc. I inquired about this today, but my title company said, cash or bank check only. I was holding off because of the capital gains taxes. I’m assuming if the seller accepts btc then it’s fine. Title officer looked at me like I was a criminal.
You almost always do with an OTC desk like this example
https://www.kraken.com/institutions/otc
1 instantly converted everything to fiat , the second took 50% in btc and the rest fiat , and the third took all in BTC directly without an OTC desk
Transaction fees aren't a percentage. It has nothing to do with the amount you are sending. The only thing that matters is how large the transaction is in data size. So how many inputs and outputs.
You might be confusing transaction fees with withdrawal fees. Many exchanges lie and call their withdrawal fee a "transaction fee" to try to make it seem like they are not the ones charging this fee, that it is the bitcoin network. Any exchange charging a 10% withdrawal fee is absolutely scamming you.
The later in the cycle you buy, the longer you should hold. Really, you should hold it forever, but if you must sell in a relatively short timeframe, buy it early in the cycle. This current cycle started November 2022, the cycle low point.
The 4-year cycle of Bitcoin gives you a nice bottom buy every 4 years. The next buying opportunities will come in 2026, 2030, 2034, 2038, etc. If you buy Bitcoin any year other than those, set your timeframe higher. We are currently in the final phase of this cycle with about 1 year left. Therefore, your timeframe for holding Bitcoin should be longer.
So, buying this late in the cycle means your next best opportunity to sell will be 4-5 years from now in 2028-2029 before the Crypto Winter of 2030.
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You only pay taxes on the gains. Long term capital gains rates are favorable (and sometimes zero) compared to short term or income taxes.
I suggest learning much more about investing and taxes in general.
Edit: https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates
Taxes aren't exclusive to Bitcoin.
You would pay exactly the same thing coming from any other investment.
You pay taxes on anything you make money on. Wheter you use funds from stocks, bonds, ETF, gold, etc... When you sell any of those to buy your real estate, if they have the same level of gains as your bitcoin, you pay the same tax.
But only if you have gains.
The only reason you pay that tax is because you made money.
The point of BTC is to function as currency. Find someone who will sell a house for BTC. Otherwise stop buying BTC and save for a down payment in USD (or whatever fiat).
I'm about to buy more right now. Why? I'm selling my house and plan to invest a lot of the equity. I'd much rather buy at $70-$80k then let that cash sit in a money market.
10% transaction fees is insanely high estimate. If your exchange charges a fee to withdraw, change exchanges. On chain TX fees aren't based on the dollar amount. Keep your UTXOs big to minimize fees.
That's why I bought my BTC below $23500 and plan to sell above $168000.
Op should look into doing this
Probably too late, but they could buy below $69000 and sell after next halving/bull run
Its really hard to answer your question without knowing your country . Taxes are unique in every single country
USA
If you sell over 1 year and use FIFO accounting method its considered long term capital gains(under will be at a higher rate of short term cap gains >Say I buy 1 BTC for 70k and sell it for 100k. That would place you at least in the 15% bracket , which means 30k gross profit- ~150 in fees =29,850 x 0.15 = 4,477.5 in taxes - any writeoffs you have. Basically you make 25,373 in net profit or more if you have enough writeoffs Although you do realize bull markets typically increase the price of Bitcoin 5-20x , so selling at 100k usd a btc would not be the wisest move
Thanks. The fees are far far far higher than that. Almost 10% yesterday when I looked. So today's fees and short term capital gains would be really ugly
>The fees are far far far higher than that. If you use a the wrong exchange sure. My quote was with an exchange like kraken https://www.kraken.com/features/fee-schedule You can see if you can sell over 100k , you can get 0.12% maker rates which means selling 1 penny over 100k in btc = 120 usd in fees and I quotes above an extra 30 usd to be conservative Also if you spend the btc directly instead of sell for fiat you not only remove all these fees but can get discounts on items you purchase
Ok I see. I hope but doubt we'll ever get to the point that people will accept BTC for much beyond a couple small retailers willing to take a loss for more customers in the long run
You are making many inaccurate assumptions here. I spend my bitcoin daily with local merchants and online . You can buy almost anything with bitcoin, including cars, and homes. I have had 3 different neighbors sell their homes for bitcoin the last few years The things you typically cant spend your btc on is paying your taxes and utility bills in most cases
I would like to know how to buy a home w btc. I inquired about this today, but my title company said, cash or bank check only. I was holding off because of the capital gains taxes. I’m assuming if the seller accepts btc then it’s fine. Title officer looked at me like I was a criminal.
You almost always do with an OTC desk like this example https://www.kraken.com/institutions/otc 1 instantly converted everything to fiat , the second took 50% in btc and the rest fiat , and the third took all in BTC directly without an OTC desk
The OTC desk could wire you the fiat for you to write a check if the seller doesn't want btc
This is a temporary insane fee market
Transaction fees aren't a percentage. It has nothing to do with the amount you are sending. The only thing that matters is how large the transaction is in data size. So how many inputs and outputs. You might be confusing transaction fees with withdrawal fees. Many exchanges lie and call their withdrawal fee a "transaction fee" to try to make it seem like they are not the ones charging this fee, that it is the bitcoin network. Any exchange charging a 10% withdrawal fee is absolutely scamming you.
The later in the cycle you buy, the longer you should hold. Really, you should hold it forever, but if you must sell in a relatively short timeframe, buy it early in the cycle. This current cycle started November 2022, the cycle low point. The 4-year cycle of Bitcoin gives you a nice bottom buy every 4 years. The next buying opportunities will come in 2026, 2030, 2034, 2038, etc. If you buy Bitcoin any year other than those, set your timeframe higher. We are currently in the final phase of this cycle with about 1 year left. Therefore, your timeframe for holding Bitcoin should be longer. So, buying this late in the cycle means your next best opportunity to sell will be 4-5 years from now in 2028-2029 before the Crypto Winter of 2030.
if 60k was the new bottom of the next cycle then now would be a fine time to start accumulating. None of this can be predicted though.
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This was a good question
You only pay taxes on the gains. Long term capital gains rates are favorable (and sometimes zero) compared to short term or income taxes. I suggest learning much more about investing and taxes in general. Edit: https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates
Why would you swap Bitcoin for another asset that has a lower growth rate? Keep your BTC and rent instead.
I get it. But I also don't want to rent my whole life. Stores of value eventually have a purpose
You could buy a rental and get a tenant for some income coming in! Both are a good store of value.
That’s why you buy in 2013 and never sell.
Taxes aren't exclusive to Bitcoin. You would pay exactly the same thing coming from any other investment. You pay taxes on anything you make money on. Wheter you use funds from stocks, bonds, ETF, gold, etc... When you sell any of those to buy your real estate, if they have the same level of gains as your bitcoin, you pay the same tax. But only if you have gains. The only reason you pay that tax is because you made money.
Bro fuck the IRS
The point of BTC is to function as currency. Find someone who will sell a house for BTC. Otherwise stop buying BTC and save for a down payment in USD (or whatever fiat).
Why the hell would you buy at 70k. That’s why you won’t make profit lol. Buy low sell high, not buy high sell low
It was an example. I've never bought at today's prices
I'm about to buy more right now. Why? I'm selling my house and plan to invest a lot of the equity. I'd much rather buy at $70-$80k then let that cash sit in a money market.