Great post! Thank you so much for providing your continued insights. You provide a great blend of theory, examples, and exercises such as this to help cover so many aspects of smart position trading and profit retention.
I have a question in regards to the tax aspect of taking profits. I am considering converting profit coins to dollars and taking out this year into an account outside of trading. Have you taken out and deposited in a bank account? If not, have you researched this and decided how you would approach come tax season? Boring question I know! But this is something I hope you could shine some light on from your experience as a trader for many years. I know that it is a grey area right now in crypto, but I would prefer to be safe than sorry in case law becomes more solidified as the market is being looked act by larger institutions for investing. Trying to do this with all angles covered. Thanks!
It will depend on your country. Here in Canada, I declare any coins that I switch to fiat, as regular trading income. However, I do believe for most investors, they would be able to declare the profits as capital gains, and then you pay tax on only half the profit and the other half is free and clear.
Like you I would rathar be safe than sorry, so I declare all coins that get converted to fiat as income.
Ok thanks. I have read different perspectives, such as how if you buy bitcoin with USD, then when bitcoin rises you purchase an altcoin, you would have to capture those gains in your tax return for that year. I also know the perspective that you only need to capture gains if you convert to fiat. Could be this year or in a few. Since exchanges are constantly changing, your gains or losses can't be presented as a proper picture until returned to fiat. Also using other examples, if you sold a house, then bought another house, you aren't taxed on same asset type. Does this make sense? You trade a lot as your charts show, there is no way I could see you being able to capture every gain as you convert one crypto to another. I know Canada has a different tax code than US (where I reside), but believe there are similarities to how the timing with both. Thanks again for your time, the past month or two has been a great learning experience and trading philosophy that could perhaps change many lives that see your method. As a side I researched into several including Neo, and when I saw the rebranding from ants and a couple other points I bought in, only a couple weeks ago but that's all it took, man things go fast.