Debts Are Awful, But Taxes Are Stupid
A couple of weeks back, I briefly explained that I am back again after being basically forced to quit/leave Hive and my vision for- and with Hive and what I think we can achieve with this amazing blockchain, the outstanding communities and the wonderful people. Simply put, things where pretty much shattered.
I am not really known for giving up, but I haven't had enough energy and power to squeeze lemons to make lemonade during the harsh time I've faced so I had to change certain things. I have been powering up- and down, cashing out and I have truly enjoyed and benefited from Hive (Steem) since I first joined, but things back-fired, hard, when I tried to "do the right" thing earlier this year.
You see, I had no prior knowledge to blockchain technology- or cryptocurrencies when I stumbled upon this place the first time. With time came experience but I never started to invest in other cryptocurrencies than Hive (Steem) until pretty much last year. The year I finally decided to jump off the fence and get into crypto on a more serious basis.
That lead to some investments on a pretty regular basis. I grabbed whatever DOGE and BTC I could get my hands on. I even held some Steem, even though that should be taboo by now.
I am not looking to just hold cryptos for my entire life, because I want to use them when- and where I can, and even though I can see lots of potential, I am not convinced that crypto will change- and take over the FIAT-world like some might say or believe. That leads to selling (cashing out) and buying. Arbitrage. Buy low & sell high. Call it whatever you want. After all, that's basically what got me into this whole "make money online"-thing in the first place. I bought services and sold them to others.
Anyhow, things where looking pretty great, until I somehow realized that I need to be serious if I am going to be serious so to speak. I wouldn't say that it was my biggest mistake in life, but it was definitely the biggest mistake I could’ve made this year, because it wiped me out completely. And I doesn't mean that financially, even though I obviously took a huge blow.
Here's the thing. Sweden is messed up when it comes to crypto-taxes and I happened to be "one of those guys" who got caught with my hand in the cookie jar. Long story short, I was forced to back-track my "crypto-adventure" until the day when I first owned crypto.
- That was in July 2016.
This is what it says:
If you have sold, exchanged or paid with a cryptocurrency, you need to report this to the Swedish Tax Agency in connection with you declaring. If you have made a profit, you must pay tax on your profit, and if you have made a loss, you may deduct part of it. Cryptocurrency is also called cryptocurrency, virtual currency or digital currency.
Nothing wrong here. You pay 30 percent in tax on your profits.
Here's the second part:
When should I declare bitcoin and other cryptocurrencies?
If you are a private individual, you must declare your cryptocurrencies if, for example, you have:
- Sold cryptocurrency.
- Exchange a cryptocurrency for one or more other types of cryptocurrencies.
- Exchange a cryptocurrency for a FIAT currency, such as USD.
- Paid with cryptocurrency when buying a product (for example a pair of shoes) or a service (for example a taxi ride).
- Lent cryptocurrency.
- Used cryptocurrency as a gaming stake.
I am not familiar with other countries and the tax regulations, but to me personally, Sweden's regulations made things extremely difficult, unfortunately.
There might be someone who knows a lot about this, and someone who knows exactly how to handle a case like the one I had (have), but I was stunned and didn't have much to say at the point, so to make a very long story short, I have been forced to pay taxes for cryptos all the way back to 2016. For various reasons:
I have sold crypto, I have exchanged (swapped) one crypto for another, I have exchanged cryptos to USD, I have "lent" crypto because I have sent crypto to other individuals and I have used cryptocurrencies to gamble. Both on Hive and outside of Hive.
Needless to say, one thing lead to another and I was pretty much stuck in a complete shitstorm. I can't put all the blame on the Swedish Tax Agency though, because I was the one behind all of the actions. I transferred crypto here and there, I bought and sold, I cashed out. I did all of those things but because I was looking to do "the right thing", I got caught big-time and no one was there to help me. They just told me to pay up.
I have to pay a few more grands until I am out of this hole but the "funniest" part of this, is that I am paying taxes on my profits, but I have also been paying those taxes with my profits. It's a tax-debt now though, so I am paying back money I owe in taxes, but I do that with crypto.
- Weird. To say the least.
Anyhow, I am here with more experience and I'm digging my way out of the hole again. This time, I won't be so ignorant and just "believe what others say" though, because there's nobody but me who's here for the consequences and to clean up the mess. Crypto is cool and all, but things would've been a lot easier if I had more knowledge going into this. That's on me though.
- 2022 will be different!