A Californian-based college student, who decided to follow a friend’s decision to invest in Ethereum, in May 2017, is drowning in self-pity after receiving a mail which stated that he currently owes government tax, valued at 400,000 dollars. He made this known on Reddit on Nov, 2 where he sought for the community’s guidance on the next step of action.
Based on his post, he had invested 5,000 dollars into several altcoins which yielded up to 880,000 dollars, in December 2017. But then, the portfolio devalued due to the sudden fall in the price of most crypto assets in January this year. His portfolio which went as low as 125,000 dollars, could also be attributed to the losses he had made by investing in non-profitable ICOs.
The “clueless college kid,” as he called himself, claims that he had never withdrawn the profits he had made to his Bank and therefore, was not expecting to pay the mandated tax levied on transactions in certain countries. He also stated that, before his trading, he was uninformed that there were certain legal requirements he needed to understand.
While responding to his post, users of the community stated their opinion based on what they felt was the proper thing to do, especially if they were in his position.
One of the users said,
As a CPA my advice is to find a qualified CPA immediately. This is a complex and potentially dangerous position to be in and shelling out for qualified help is the best position. Also if you do owe tax, interest is going to start eating you alive if you don’t get ahead of this. Hope it works out but seriously, get a tax professional and stop wasting time trying to get free advice.
The student who is now wishing that he had cashed out the money without waiting for it to reach a million dollars, is also wondering if this could be the end of his life.
He also stated that;
I’m a student and I work part time making $12/hr as a retail associate at Barnes & Noble. I haven’t paid any taxes or filed any returns for 2017. I wanted to but I have no idea where to begin.
As proof of the tax levied on his account, there is a 1099-K Coinbase report linked to his post. However, the post on Reddit was updated a few hours later, notifying the community that he has sought the counsel of a legal aid that specializes in cryptocurrency and other digital assets.