Short Term Capital Gains Tax

Do I have to pay short term capital gains if I have less money than I originally started with? Turns out I'm really bad at swing trading...

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report it as a capital loss then
??

>Do I have to pay taxes on gains that don't exist?
Do you see where you went wrong?

no, it's plus minus zero until you are under water then you don't pay anything because you didn't make any profits

and no, the system wont pay YOU in the situation

This is my first time filing taxes because I've been a NEET since I've graduated college. Do I get gibs for reporting a capital loss?

You can write off like 3500 of capital losses against earned in come per year (earned income = your job). So lets say you lost 35000, you have 10 years of write offs against earned income, or 35000 of write offs in a year if you have massive short term gain taxes.

No, you could first use those losses to offset any capital gains that took place within the same calendar year.
Then you could use up to $3000 to offset taxes owed on any ordinary sources of income like paychecks from a job.
Then the remaining balance of your losses are carried over year by year where they can be used up to $3k/year to offset ordinary sources of income.

If in profit
Total profit - Total losses = net profit - taxes (you are taxed on net profit if you are daytrading meaning wash sales are fine as they only care about net. Usually you'll just add this to your average cost.)

If in losses just report as losses and deduct it from your income. However if you're reporting losses against your income you can't have wash sales.

Basically you're fine it you kept more than half your total gains if day trading. If not you'll have to pray.

If at a loss you can write off 3k against income unless it's a wash sale. If you're in Canada it's a bit shittier but still fine if you're in profit.

Great, thanks bros.

Isn't a loss limited to $3,000/year for 3 years? At least that's how it works with stocks. Shit system, I know. That's why incorporating to trade crypto would be the best so it's considered income and you can reduce that I come entirely by losses.

Sorry for lacking the specifics, just trying to let OP know he has options, he'll have to find the exact details

It's 3k per year indefinitely as far as I know. It's even shittier in an inflationary environment because 30k now is a shitload more valuable than a 3k right off over 10 years where 3k will be worth 1k today.

No you don't.
It has "gains" in name for a reason lol

If OP was swinging he was daytrading as a classification. It's a simple as he writes off his gains against his losses.

Here's another question for you, since you seem to know this process well. Is reporting short term capital gains (as a swingtrader like you said) as simple as input plus output, or do I have to list out every single trade I've made along with the gain/loss attributed to that action? If so, what tax form is it that I have to write all that bullshit down? (For amerifats)

Yo user save your shit and invest on gem like Sylo that offer a great staking apy too. instead of blowing your shit on swing.

anything under 40k, shouldn't have to even worry about it

I thought that only applied to Long Term Capital Gains?

Report all trades anyway. Seriously just get some tax software to do it for you and give your docs to a cpa when it inevitably fucks up a few things. The piece of mind is worth it. It really is as simple as input - output for daytrading. Remember you're taxed as regular income as a daytrader. So basically
>make 100k year at job
>make 50k in crypto total
>lose 20k on crypto total
>130k total income
If the tax guys give you a hard time just have your proof of trades from your exchanges. It's even funnier if you have a grid bot and your proof of trades is over 100 pages long of 13 dollar scalps

Thanks user. Any tax software you recommend?

I used Koinly but it fucking sucks at tracking fiat on ramps and missed a bunch of shit calling it a 0 cost basis.

>and no, the system wont pay YOU in the situation
Capital gains taxes should go to those on the losing end of the trade, especially women and people of color