Rags To Riches To Back Again
The unnamed student, who is a resident of California, stated that he opened an account in Coinbase and invested about USD 5000. He made a few good choices in trading and saw his amount soar “all the way up to an $880,000 portfolio in December 2017”. The student posted that he had only done crypto to crypto trading on the platform and that he never “ever cash[ed] out to fiat and transfer[ed] any USD into my bank accounts from these tradings.”
The student’s luck, however, gave away. Like thousands of other crypto traders, he saw his investments plummet at the start of this year. He saw his portfolio sink to around USD 125 thousand in 2018.
Tax Man Knocking
Eventually, the college student saw himself viewing a notice by Coinbase that informed him “This important tax information is being furnished to the Internal Revenue Service” and that “Penalty or other sanction may be imposed on you if taxable income results from this transaction and the IRS determines that it has not been reported”
The obviously panicked student has done what every other college going child does: turn to Reddit for help. He posted his dilemma online, seeking help on how to proceed. The boy was given different advises, from the strict one of getting a “tax professional and stop wasting time trying to get a free advice” to the motivational one of the situation “not be a high point in your life, but you will get through it”.
Nonetheless, the poor man’s only hope is to go to professional accountant who has expertise in taxes and find a solution to his problem as he has more to pay and less to pay from. The student does a USD 12/hr part time job at Barnes and Noble and it would take him years to pay off his debt.