Q: Taxation on transfer of crypto currency across country border
I am resident of US for tax purpose (have job in US). I have transferred money from My foreign account to US account. I have used this money to buy crypto currency and sold this crypto currency in INR with profit. The money from sale got transferred to my Indian account. I transferred this money to US account and used it to purchase more crypto currency. (Repeat the same thing multiple times with profit / loss). I will report profit/loss appropriately in my tax. Am I under the radar of IRS for doing this? Is there any limit on money that I can get transferred from my foreign account? My foreign account is in India if this makes any difference. If you can help on tax issues in India as well that'll be appreciated.
When you are a US resident for tax purposes, all of your worldwide income is taxed in the US, regardless of where the proceeds are deposited. This means that, in addition to being taxed on your virtual currency transactions, you would also be subject to tax on the earnings in any Indian bank accounts, PPF accounts, life insurance (even if there aren't any distributions), mutual funds (even if there aren't any distributions), etc., and any other sources of income outside the United States. There are also various reporting forms for bank accounts, investment accounts, life insurance accounts, and mutual funds depending on certain details. I strongly suggest seeking tax advice from a tax professional who is experienced in US taxation of foreign income.
There is US-imposed limit on the amount you can transfer to the US from your accounts in India.
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