For this one case, would my Bitcoin-to-fiat conversion be tax free?

Question

The situation:

I currently have 1 BTC left. I originally had many more.

Over the years, I have spent a total of $14,648 USD to buy Bitcoin every now and then.

According to Swedish tax rules, I have to pay 30% on the profits when selling Bitcoin for fiat.

Does this mean that, if I sell Bitcoin for fiat amounting to exactly $14,648 USD, that will mean $0 "profits", since it's the exact amount that I've spent in fiat to buy Bitcoin, meaning I have to pay $0 in taxes this time?

Of course, from that moment on, I have to pay 30% on the total sum I "take out" in fiat from my remaining Bitcoin.

Have I understood this correctly? Is this not completely reasonable and fair? I could really use $14,648 USD right now, and it would actually be sort of a "relief" in a way to know that from that point on (assuming no further Bitcoin purchases), I have to pay 30% on the total amount and I don't have to think about how much the "profits" are.

To make it clear, I have never once in all these years sold any Bitcoin. I bought most of them when they were very cheap, then lost tons of them, then bought small amounts relatively recently. The point is that it's a big mess of purchases and lost coins, so I'm trying to clear things up by first "taking out" the mentioned sum which is all the fiat money I have spent over the years to buy Bitcoin. If I didn't do this, it would be very unclear how I should calculate the "profits" each time I sell some amount of Bitcoin.

If I ever had to explain this, and I told the "IRS" (Skatteverket) exactly this information, they would not throw me in jail or fine me or anything, would they?

Once again, I want to make it clear that this is a one-time thing, largely to just "reset" the profits rather than me requiring that exact amount right now. The point is mostly to make future Bitcoin sales easier to calculate, since I will simply be giving 30% of the sum I get in fiat to the vultures at Skatteverket.

Answer 1

No it is not tax free.

Whenever you buy you add the cost to the "omkostnadsbelopp"-amount (let's call this OB-amount for short). Whenever you sell or use (for example buying something for bitcoins) you use the share of the OB-amount as cost basis. The difference between what you sell for and this cost basis is profit or loss. The OB-amount is then deducted with this cost basis and will be used as input for the next transaction. Example:

1. Buy 1 bitcoin for 1,000 SEK. Total OB-amount: 1,000 SEK.
2. Buy 1 bitcoin for 10,000 SEK. Total OB-amount: 11,000 SEK.
3. Sell 1 bitcoin for 100,000 SEK. Half of you bitcoins is sold. Use half of the OB-amount i.e. 5,500 SEK. Profit is 100,000-5,500 = 94,500 SEK. Remaining OB-amount 5,500 SEK.
4. Buy 1 bitcoin for 90,000 SEK. Total OB-amount: 95,500 SEK.

The only way to "reset" things is to sell or use all of them, until then you might be asked to show your full history every year you sell or use bitcoins.

Answer 2

I currently have 1 BTC left.

I originally had many more.

This is the key to the answer being -- in my opinion -- "no".

Over the years, I have spent a total of $14,648 USD to buy Bitcoin every now and then.

But how many BTC have you purchased?

According to Swedish tax rules, I have to pay 30% on the profits when selling Bitcoin for fiat.

Does this mean that, if I sell Bitcoin for fiat amounting to exactly $14,648 USD, that will mean $0 "profits", since it's the exact amount that I've spent in fiat to buy Bitcoin, meaning I have to pay $0 in taxes this time?

The real question is, "how much did I pay for that one remaining BTC?"

Hopefully you've been keeping track of purchases (and the price) and sales (and the price) using the FIFO (First In, First Out) method so that you can determine the cost basis of your current BTC holding.

If you've bought and sold bits over time, the one BTC might really be the aggregate of many purchases, so there might not be one cost basis for that single BTC, but multiple cost bases (one for each purchase that hasn't been cancelled out by a subsequent sale).