What If You Can't Pay Taxes on Your Crypto Gains?

Publié le by Coindesk | Publié le

Your attempt to get clarity around crypto tax brainteasers can result in some surprising and unexpected tax liabilities at this time of year.

As we've seen through the CoinDesk crypto tax series, there's a whole new realm of tax considerations that didn't exist four years ago.

Maybe you're caught in a crypto squeeze play, wondering how to pay tax liabilities by liquidating the crypto you don't want to liquidate.

Perhaps you're finding out that some crypto you received at its highest historical price is taxed as ordinary income and now it's worth 30 percent of its former self.

If you need more time to gather information for your crypto tax calculations, you can always file an individual extension on April 17 for tax year 2017.

Generally speaking, if you made estimated tax payments for 2017 equal to or greater than your 2016 tax, then you're in the safe harbor for that big tax payment on your once-in-a-lifetime gains until the April deadline.

If your 2016 tax was $30,000 and you estimate 2017 taxes at $150,000, you should have paid 2017 estimated taxes of at least $30,000, which leaves you needing to pay $120,000 on the April due date.

What if you can't pay or don't want to pay the tax at the moment penalties and interest start accruing?

You're an individual with a $150,000 tax liability, so you painfully pay $100,000 and then finance the remaining $50,000 by using and managing future cash flows and crypto appreciation.

You make several monthly payments of $800 each until the crypto market explodes later in 2018, allowing you to sell for big gains while paying your tax in full with a smile.

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