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RE: "0.04% Of IRS Filers Reporting Bitcoin Gains FUD" - File For An Extension If You Need To
Unless Coinbase and Binance work together and provide customers with detailed annual reports, I don't see how I could report any gains/losses *but even then, I don't see how its possible). When I covert ETH to an alt coin on Binance, it's not like a stock trade, there is no cash involved, no loss or gain...cash goes into the initial coinbase then goes to Binance and gets traded into various things and mixed together, and back to cash in the end, but I don't see a way to track gains or losses in any manner. What am I missing?
The basic idea, as I understand it and as most people seem to interpret it, is that every single trade is a potentially taxable event, and the basis/gain/loss is computed using the fair market value at the moment of the trade. Whether a transaction is taxable or not has nothing to do with whether the transaction involved fiat.
You sell 1 ETH for 1 TOKEN on Binance: you're exiting an ETH position and entering a TOKEN position. If you bought that 1 ETH for $50 and then it's worth $500 at the time you traded it for the 1 TOKEN, then you have a (roughly) $450 taxable gain.
Of course, I'm not a tax adviser and this isn't tax advice. Just trying to be a friendly helpful person.