Is buying a loaded Casascius coin a taxable event?

Hey, can someone clarify this for me? I'm in the US and looking to buy a loaded Casascius coin with 1.1 BTC. If I buy it, and the seller cashes out the BTC right after, do I owe capital gains tax on that amount or does the seller? I'm super confused on the tax stuff.

From what I know, you only pay tax when you actually sell the BTC for fiat. If you buy the Casascius for 1.1 and sell it for the same, there’s no gains to report. Unless the BTC you used appreciates in value before selling it, then you might have to calculate gains based on that difference.

Exactly, you’re buying something, so gains don’t hit you right away. If you just send the BTC to them, what they do with it afterward is irrelevant to your tax situation. Just keep in mind that this isn’t legal advice, but generally until you sell for fiat, you should be good.

But if I bought the coins from an exchange, won't they report that I sold my BTC to someone else? Thanks for any help.

Honestly, the IRS is pretty clear; you owe capital gains tax on the increase in your BTC’s value from when you bought it to when you traded it for the Casascius. What the seller does with your BTC doesn’t change your liability. Plus, the exchange might report that you withdrew BTC, but it’s unlikely they’ll know what you did with it afterward.

But how would they know if I sold it to someone? Is the coin still with the exchange or did I take full custody?

Not sure where you’re from, but in most places, it’s not taxable until you actually make a sale. Just be aware of your cost basis when you buy that physical coin; that’ll affect your capital gains tax down the line. It’s not a locked-in thing right now.