I can’t find any answers anywhere everyone seems to be confused on this.
Stakeus is a sweepstakes casino. You buy coin packages with crypto and they give you sweepstakes coins along with the gold coins.
The sweepstakes coins can be used to play games to win more sweepstakes coins and be redeemed into crypto.
If someone were to take their sweepstakes coins and redeem them for a crypto such as litecoin how are taxes filed for this? ex. purchased a coin package with $20 of LTC. Win $5000 sweeps coins, redeemed for $5000 of LTC, sold for $5000 usd. How would taxes be done since there is no cost basis?
Posted by Bondagelove25
1 Comment
You need to follow the regular gambling/crypto/income rules
You should ideally consult with an experienced tax preparer. The nuances of what you did and what assets you had control over and what transactions happened will dictate the tax effects/impacts
Generally, you put in money and win more money, that’s gambling income; your basis in the asset you receive (i.e. the crypto) is the income you recognized at FMV when you received it
So in your example there is in fact a cost basis. You wagered $20 and won $5,000. You report net gambling winnings of ~$5k which is now your basis in the assets you received
You transfer/trade/sell all for roughly the same $5k. You have some minimal gain/loss on those crypto transactions