Bitcoin is taxed as a collector's item

Because there has been practically no interest for years, many are looking for alternatives. And some are tempted to go into real assets, such as jewelry, antiques, coins, but also gold, silver or even crypto currencies such as bitcoins. The advantage: If these things increase in value, no capital gains tax is due on them, such as on fixed-term deposits or stocks.

On the other hand, these investments are very speculative - and under certain circumstances taxes are still due when they are sold: If you get hold of the valuables too quickly, you have to pay income tax on the profit. And those who give the impression of acting on a commercial basis are charged by the tax office with sales and trade tax.

We have therefore summarized the pitfalls when selling private valuables for you:

1. Speculation period of twelve months

If you have owned valuables such as precious metals, jewelry, antiques, works of art, vintage cars, coin and stamp collections for more than a year, the sale is always tax-free. The same goes for bitcoins and foreign currencies. The purchase and sale within twelve months, on the other hand, is a taxable private sale transaction. Make a profit of at least 600 euros from all transactions of this kind, you have to pay income tax on it - on the entire amount, not just on what exceeds the 600 euros.

Taxes are based on your personal income tax rate. If you exceed the 600 euro limit, you will automatically have to submit a tax return for this year. You carry the private sales transactions as “other income” in the Annex SO a. Anyone who does not state taxable profits may be on the line for tax evasion or at least for a milder “frivolous tax reduction”.

If you make a loss reselling it, you can offset that against your winnings.

2. What applies to a loss?

As I said: Such investments are speculative. Currencies and precious metals in particular fluctuate greatly in value. The price for gold fluctuated in the last twelve months between 1,200 and 1,550 euros per troy ounce, and that for Bitcoin between just under 3,000 and a good 12,000 euros. So you can easily make losses.

If you sell within the one-year speculation period, you can lower your taxes with the loss: Apply with a cross on the cover sheet of your tax return that the tax office should determine a loss and submit the completed Annex SO.

You may only offset this loss against a profit from another private sale. The good thing about it: If you did not make any profits that year, you can offset the loss against profits from the previous year - or reserve it for future profits. One then speaks of a loss carryforward.

3. How to calculate a profit or loss

With foreign currencies or crypto currencies, it is often the case that you accumulate assets over a certain period of time. If you then debit an amount from your currency account, for example 100 dollars, then of course the question arises, which 100 dollars you spent. The ones you deposited at the very beginning or the ones that may only have entered the account a month ago.

The answer: The tax office assumes you are spending the $ 100 that you deposited at the very beginning. The method is also called “First in, first out” (FIFO method). Realize that you are not just selling your dollars or bitcoins by exchanging them back for euros. Even if you use it to pay for something, it is in fact a sale on which taxes can become due within the speculation period.

In order to calculate the profit, there is no avoiding the time of each purchase and sale, the number and the price of the coins and the fees. There is now software that helps.

You can deduct the acquisition costs and fees from the course profit - as well as other advertising costs.

4. Commercial sale

Valuable things can also be easily sold via portals such as Ebay, rebuy or classifieds websites. The boundaries between private and commercial sales are fluid. Tax investigators regularly search online portals for commercial traders who do not pay taxes. You can use a complex presentation, frequent sales, a lot of new goods and if you are selling for third parties as indications for this.

It can be problematic, for example, if you sell a lot of value after an inheritance. Or when you dissolve a large collection. Basically, the sale of a coin collection, for example, is considered to be the last act of the collecting hobby. But if you take the opportunity to sell your friends' coin collections as well, it will be difficult.

If it is a business, you must state the business income in your income tax return. The costs of the sale are deductible as business expenses.

You also need to register a business and a Business tax return submitted. If the trade tax profit remains below 24,500 euros, no trade tax is due. If your income is permanently below 17,500 euros, you do not have to pay any sales tax.

But as long as you only sell things for everyday use, there are no problems. Incidentally, this also includes the car.

5. Bitcoin special case: mining

Some earn virtual money by "mining" (prospecting), for example from Bitcoins. They provide computing power to solve complex mathematical problems that create bitcoins. As a reward, they then receive bitcoins.

If the taxpayer operates the mining more often and with the intention of making a profit, the tax office can call such activities as commercial activity classify.

To the advisor

Tax editor at Finanztip Consumer Information GmbH - a company of the Finanztip Foundation, Berlin. Before that, the business graduate with a focus on tax law wrote for various business and specialist publishers such as Handelsblatt, F.A.Z.-Verlagsgruppe, Haufe-Lexware and Vogel Business Media - 14 years of which he worked as editor-in-chief of specialist magazines. Udo draws the relevant judgments for tax savers from the complex tax law.

Was standing:

Tax editor at Finanztip Consumer Information GmbH - a company of the Finanztip Foundation, Berlin. Before that, the business graduate with a focus on tax law wrote for various business and specialist publishers such as Handelsblatt, F.A.Z.-Verlagsgruppe, Haufe-Lexware and Vogel Business Media - 14 years of which he worked as editor-in-chief of specialist magazines. Udo draws the relevant judgments for tax savers from the complex tax law.

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