I Have To Start Over From Scratch, Again.

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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.

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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!

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57 comments
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(Edited)

Your support means a great deal to me, I truly appreciate it in these times. Makes my "comeback" easier. Thanks ikran! ;)

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I am afraid I could be in this position at some point in time. I have some money set aside that I am going to use to pay taxes, but if I have to go all the way back to the beginning it could get messy. Like you though I should be able to cover any outstanding debt with my crypto and not have to touch any of my traditional funds for it.

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About as crazy in America. They’ll nail me at some point but right now I have no idea how I’d even start figuring out what I might owe. Tens of thousands of transactions. What a mess.

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Indeed. The regulations where even worse in the beginning, but they sure have some catching up to do.

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Whatever its worth, its "only" 30% tax.
Denmark have a tax of 57% on Crypto x)

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Oh, shit.. That would probably have put me on the streets.

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Well, its only the crypto tax xD

Kinda why I haven't told them about my crypto yet, waiting for that tax to get normal

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Taxes are a bitch and your story is even worse than the ones I heard over the years. I mean if I was forced to backtrack my log to when I first owned crypto and calculate all the profits/losses that would probably be impossible.

I know that many people use crypto tax calculator for this stuff so maybe that can help in the future.

I also don't want to alarm any regulators but if you ever need to slide something under the table Monero can be a good friend.

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Teach me how to dodge the virgin IRS agents daddy.

I've heard of tornado cash too. I don't believe I should be taxed at all on crypto so I'm all for this.

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There is a certain Reddit thread where money movement and taxes with Monero are explained within the subreddit rules.

KYC'd transactions need to be reported but no one had a comment on non-KYC transactions. A lot of removed comments should give you an idea.

Also, I hear that some people create their own tokens and rug themselves which counts as a capital loss unless someone figures out what you did.

Creativity plays a key role here as far as I can see.

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I've talked to galaxy-brained people and here's what they told me:

  1. Create nfts, sell those NFTs to yourself at a massive loss, buy them back, sell them, wait to you get traction and other people buy your shitty nft, profit.

  2. Put your crypto as collateral on a decentralized lending platform in an over-collaterized ratio, take out loans to live off of, give middle finger to IRS.

Thank you for the link and the bantz fellow pepe.

Have a pepe :) signal20211229092209.jpeg

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As long as everyone is informed on the risks I have nothing against creativity, even if it means wash trading NFTs.

Ty for the pepe

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Thank you. I might as well start to educate me even more for the future. I appreciate it!

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I hope 2022 is a better year for you. I think someday, there will have to be a new country created for all of the crypto people who want to opt out of interacting with corrupt (or at least inefficient) governments.

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I'm sure 2022 will be better. These last couple of months have been really crazy. It's a mess at work with bullying and an overall crappy work environment, a colleague killed herself by jumping in front of a train, this whole crypto-tax craziness and on top of it all, I've been sick for the past 3 days and had to go test myself for Covid earlier today. Still waiting for the result.

That being said, I don't need much in 2022 to have a better year than this.

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Wow, sorry to hear all of that! I hear you! 2021 wasn't fun for me either. My mom died of ALS in April, I found out my brother has the gene that causes ALS (I might have it too), and my wife and I got separated. It was a pretty good year financially, but overall it wasn't so great.

I also got a Covid test today because I've been feeling vague symptoms, but several people at a job I worked for two weeks tested positive.

When life hands you lemons, say fuck the lemons and make !PIZZA

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Oh man, that's awful. I feel for you.. :/

What are you going to do about the ALS gene? Are you going to find out if you have it too?

This covid-shit is getting out of hand.. Well, it has been out of hand for a long time already, but I'm so tired of it. We've recently started to work with protective equipment and stuff again.

It's hard going around with face masks and other things for 9 hours per day.

  • Fuck Covid, 2021 & lemons.

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I'm going to pay a tax preparer or learn how to become a tax preparer. Taxes on crypto levied by pedophile adrenochrome enthusiasts is fucking dumb and gay.

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Yeah, I wish I knew more and a lot better before I decided to pay taxes.. It has been a living hell.

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The tax laws are similar elsewhere and it is an accounting nightmare. They treat the buying and selling of crypto like a security, ala stock. So each transaction is a taxable event.

This, of course, gets absurd for those who are doing a lot of swapping. It is why so many are ready to opt out of the system.

Personally I think there needs to be a few areas where privacy is provided and then it is game over.

We will see what developers come up with over the next couple years.

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How about just having to pay taxes on the actual profit at the end of the year or whatever. That would make things much easier. All this other crap makes it near impossible.

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Damn, they are as bad, maybe even worse than the U.S. and that is saying something.

Glad you are on the road back to normalcy.

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Thanks, I appreciate it. Yeah, it has been a nightmare.. But I guess I'd rather learn my lesson now instead of in a few years from now.

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Yeah. I have been dreading this very thing. Unfortunately dreading doesn't fix the problem :-(

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That is very true. I'd rather go through this thing now instead of in a few years though, but it has been a shitstorm.

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I am glad I don't do a lot of trading on KYC exchanges but I wonder if I will get hit with a tax bill in the future in all of this. Good luck paying off everything and I am glad I don't exactly trade off crypto a lot on the fiat off-ramp exchanges.

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If I knew this would happen, I would've done things very different in the past. Even though this obviously sucks a huge D, I'm trying to remain positive and see things from a different perspective. I mean, this could've happened a few years from now instead, and things would've been a lot worse.

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I'm sorry to hear that man.

I'm afraid something similar will happen to me but I guess I'm safe for now because I avoid doing too man transactions on KYC exchanges and the regulators in my country are lost when it comes to crypto but I think eventually things will get just as bad

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Let's hope your country continues to be lost in terms of crypto taxes. That would make things easier. :)

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Could you do another post explaining what you had to do to figure out your taxes relating to crypto? And also how you have taken care of the situation regarding the back taxes? Sounds like a nightmare...

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Haven't thought about that actually. Not sure I'll be able to make a good enough post explaining things, but I basically had to calculate my crypto transfers, since july 2016 until now.

The "good" thing is that I haven't used too many exchanges or a lot of different currencies, so it was rather easy to find all the transfers I had made.

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I really hope 2022 is different. Medical bills are horrid.

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I don't have any direct personal experience about that as we have more or less free healthcare in Sweden.. But I've heard some really, really depressing stories.

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Sweden. I know it exists. It just seems like a magical place.

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30% tax on crypto is way too much, you have gain experience now and must know how to navigate past the tax now.

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That's true. I wish it where easier to pay taxes though. I mean, I'm doing things because I want to be a "good citizien" or whatever.. So one would think they would be happy with whatever they got.. But nope.

They needed my entire arm because I gave them my hand.

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Oh gosh, that sucks! I was afraid for this for a while as well, thankfully (the upside of it lol) I didn't have much to begin with, this is the first year that actually should mean something tax-wise. But thankfully I discovered after carefully consulting my accountant that here we only mention the part we have cashed out and pay a percentage of this part. Very easy.

Not sure how next year in Spain will be, I don't expect it to be this simple everywhere (and for years to come).

Sorry to read that you have to start over, but in a way it's also funny that you're paying them with the crypto earnings :)

Hopefully, you can come back quickly and do it the right way from now on.

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But thankfully I discovered after carefully consulting my accountant that here we only mention the part we have cashed out and pay a percentage of this part. Very easy.

That makes total sense to me. I wish Sweden had the same regulations. I mean, come on, why on earth should I include information about me lending someone crypto? That's just ridiculous.

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I agree, I know in my home country, it's different as well, I believe you have to declare how much crypto you own at January 1st or something like that. The rules here are super simmple, clear and I honestly partially fear the change next year as I believe it will be more of a headache.

Sweden seems to make it quite difficult, hopefully, you find a way to continue crypto though. Would be a shame if you are put off by government regulations.

Good luck!

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Taxes are insane, it seems more a way for governments to rip people off. Keeping under their control. People who don´t have much money are much easier to control.

I hope you can pay them off soon enough and are able to make your profits again instead of having to give it all away.

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Crypto taxes seem to be a fact nowadays and when taking profits out of them we need to pay the government as well, even if they did nothing to help us. Lucky enough in my country I only need to pay 10% and I might that some profits in 2022 before that changes.

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Wow, 30% is a lot, in my country it's 10% out of the profits you make. And it is considered a profit, the second you transfer your money into your bank account. I am so sorry for you, honestly, it's quite harsh.

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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.

It's not your fault that the governments and bureaucracies have messed everything up. Stay strong.
Best of Luck!
!PIZZA

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Taxes in crypto? I'm really shocked to read the above. I don't know why the Swedish Tax Council will come up with such outrageous percentage - 30% looks extorting. Well, they may have their reasons.

You didn't include the consequences if you fail to pay the 30% tax

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I think paying 30% tax is good than declaring everything to the government as well as selling everything because the government is planning to ban it, here in India

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So sorry to hear this. Income taxes are immoral, but governments use them because they, too, are immoral. Praying you get out of this hole and prosper in spite of the government.

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Well the reality of the situation is that most people in crypto are just like you. Unfortunately they also don't understand that the majority of these cryptocurrencies probably including this hive chain are unregistered securities. So projects like bitcoin myk which i spearhead is working on moving to nonprofit organization status.

However regulation will crush and destroy most of these projects. The problem is most people are so quick to try to make money and get rich they don't research or study. It's alot to know and it's too many people with the wrong info and pushing the wrong illegal projects that confuse everyone.

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