I’ve been following some threads on taxation etc and I’m confused and concerned.
I keep hearing that if I move my ETH to a cold wallet, the IRS will see it as income. How exactly will they see it as income? It doesn’t make sense unless I convert it to USD and transfer the money to my bank right?
When I first started, I bought ETH on PayPal because I was a noob and it was relatively cheap at the time. Then I learned more and saw this wasn’t a game but a serious way to gain wealth and I sold my ETH on PayPal. (That’s a taxable event…I get that) and bought on coinbase.
Then I learned more, transferred to Coinbase Pro and started buying there to save on fees. Haven’t sold a thing.
If I transfer to a cold wallet, I still haven’t realized any gains and could potentially lose everything if ETH plummets to zero. I don’t see a taxable event here. In fact, it will likely cost me money to make the transfer. Where is the taxable event?
As I said somewhere else, that would be like taxing anyone who moved a gold coin from one pocket to the other.
from Ethereum https://www.reddit.com/r/ethereum/comments/q7a221/worried_about_moving_my_eth/