<prompt> Human: Hey guys, I would really appreciate help on this as I have not been able to find any answers yet through my research. I am a resident of the USA and never cashed out my assets to USD - Say in December 2017 I invested 500 in various alt-coins - Assume that by December 31st, the value of this investment had gone up to 10,000mini crypto-crash happens in January-Febuary- So in the present day this investment is now again worth just worth 500Since taxes are based off profits in 2017, would I seriously have to pay 30 taxes on 9,500? Thats almost 3,000 of tax for an investment now only worth 500? I would really appreciate some help as this seems really terrible and I honestly would not have the money to even pay that amount that the moment. Thanks guys. Edit: Thank you guys so much for the help, this has been extremely informative Assistant: If you did not actually sell or trade to a different coinasset when they were worth 10k then you do not owe anything. Capital gains tax requires there to be a real capital gain i.e., you actually sold or traded something. Not just an increase in value without selling.Human: Thanks for the replies. Say 500 was invested in Coin-A. After a week that investment is worth 10,000. Then 10,000 worth of Coin-A is traded for 10,000 of Coin-B. Present day, that investment in Coin-B is worth only 500. In that scenario, no capital gain is realized, am I correct?Assistant: No, you will be taxed on 9500 for your gains on Coin-A, since you completed the round trip of buying AND selling.When you sell Coin B at 500, then you can claim 9,500 as losses and adjust them against your gains. Remember if you dont sell Coin B, you are still taxed on your gains for Coin A.Human: So theoretically if that trade between Coin A B were made in 2017, and Coin B was worth 500 in 2018, I would have to pay nearly 2900 in 2018 taxes correct? This is insane to me. Assistant: Thats right. When you do sell Coin B this year, the capital gainloss for this financial year will be calculated accordingly. Human: And hypothetically if you dont have the 2900 to pay in taxes, what would you do?  <response>: You owe the 2900. You will need to pay this. You can set up a monthly payment plan with the IRS. 