Bitcoin Forum

It occurred to me that if I wanted to get rid of everything I'd be liable for capital gains and if The Man wanted to know the origins of those funds I'd better get my house in order as it's rather convoluted.

To those ends I've dug out all the old private keys I could find, noted forum posts for giveaways and taken screenshots of exchange histories to show to my tormentors.

Say if something like Byteball really did end up ginormous that's a lot of money for nothing coming from a mystery origin unless you have some sort of paper trail such as your forum posts or wallet backup.

Are many people here doing the same thing? It may pay off a long way down the line so it's worth a few hours of notation and tucking those things away.

If your savings in bitcoins, then no one can make you accountable, but if you will change your bitcoin into Fiat currency that all your transactions are received into the Bank account can be tracked. Why to do unnecessary work. Maybe you just want in the future to write a book "How I made my first million".

I am keeping tracks of my crypto records and even i am filing Income tax returns on my income from signature campaign and other sources which i am earning through bitcoin. So i am not afraid if in future it gets legal in my country.

Um, no. I don't want my balls nailed to the wall if I had to cash out to finance my sex change. In this day and age you might well have to cough up details of the origin of your money. It's not sexy but that's how it is.

A couple of hours of filing might save you an awful lot of future heart ache.

To keep this kind of history I use websites like CoinTracking (https://cointracking.info) and KryptoTax (http://kryptotax.com) (awesome website to include cryptocurrency in your tax statements) to keep a record on when and how much I profited from Bitcoin investments and trading. This way you have something to prove the source of my earnings if at some point I have to clarify where I'm getting money for the government.

I not only do this to secure my earnings from the government but also to keep a record of my history in the blockchain world. That way I can show my sons how I was a early bird and bought coins for a few dollars when they are now worth thousands.

No. It's a waste of time.

Origin - freelancing on the Internet.
Total amount - current wallet balance.
File tax form and get my fiat.
Happy ending.

How do you go about explaining bigger than your stated total earnings expenses in Fiat? There are real
limitations mate & we all face them while trying to stay say 90% tax free.

I've been keeping records of transactions. Purchase prices, etc. Mostly for my own knowledge of what I've invested and what I've gained/lossed. But I know it'll serve me well when the Feds start screaming about stuff.

Also, you should be aware that if you use an online wallet, they're probably tracking your transactions and will instantly offer it up if their local Federal government declares they have to. Not many companies are willing to die on their sword...if only more were!

This site may be of some use to anyone interested in taxes on bitcoin: https://en.bitcoin.it/wiki/Tax_compliance (https://en.bitcoin.it/wiki/Tax_compliance)

It really depends on whether you are afraid of the tax department or not...

I wouldn't go to these lengths, only things like buying or selling of large amounts of bitcoin. It is a total waste of energy and time if you wanted to document everything you do and turn it into the government. Plus, you are going to sacrifice a lot of privacy. If they really wanted to know, everything is available on the blockchain. Just let them know all the addresses you used and let them figure it out, lol.

Also i wonder how the tax department is going to track people down on assets like XMR. It'll be a real pain in the ass right now.

I keep a daily spending diary to keep track of where my money goes, be it in bitcoin or Fiat.Keeping a daily spending diary is an easy way to take control over your spending and to identify some less than desirable spending habits.

Also as an added bonus, by keeping a daily spending diary, you're already halfway there in creating your own personal budget.

Tax-wise, it's your income, not your spending what's relevant. You have to be able to prove where did you get your money from, not where you spent it.

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OP: good thread and good advice. Although I doubt that, at this point, HMRC accept private keys/blockchain records as evidence, not to mention reports/screenshots from defunct exchanges, casinos etc. Still, it's better to have something than nothing.

And if you want to be 100% legit and law abiding citizen, you should declare your signature campaign earnings. In the UK, these would have to be declared as other income (you'd need to file annual tax return) rather than be treated as capital gains (even if you don't convert to fiat).

I'm not keeping any records nor did I ever think of doing so but I think I need to develop a habit of keeping my crypto records it might be useful in the future. Thanks for drawing our attention to keeping crypto record.

Exactly the way you are talking is good but your bitcoin could be also come to low.If you change your half of bitcoins into Fiat currency then it can be best way for you.It can protect you from lose of bitcoin and also protect your current record in a market so it's better to change our half of bitcoin into fiat currency and half of bitcoin left in a bitcoin to create a records.

You doing this because of the way your country's law is structured as it relates to crypto currencies. In my own case here when it comes to capital gains shares are exempted which we can say bitcoin falls under the same category and aside that our laws does not even cover crypto currencies which means we are enjoying our tax free income until when the people saddled with the responsibilities of law making wake up and make such laws.

Yep, I've made sure that just incase the government wants to come down and try to make my life a living hell they won't be able to without some sort of fight on my behalf. I have all the records of my crypto trades, investments, and activities. While it isn't much, it is nice to know that I've got everything documented in a worst case scenario.

Wow, that's pretty bright of ya bud. Wouldn't want the tax man fucking ya.

I file for taxes when I am ready to convert Bitcoins to fiat sent to my bank account. What is there to explain?

If you convert significant amount, you should expect to be asked for the origins of your bitcoins.

And no, saying 'I've done some freelancing on the internetz' won't cut it. You could get a bit easier treatment, since cryptocurrencies are new concept, but generally - no one cares what you say, you have to be able to prove it. Otherwise money laundering would be a child's play.

And (depending on your jurisdiction), if you undertake any continuous business activities (such as freelancing), you'd be expected to register as a self-employed and be liable for corporation/income tax rather than Capital Gains tax. Makes no difference whether you take $/BTC/live stock as a payment.

I think I be doing these too, I am still a beginner so I can make my records complete. This will be a good answer for some people that might question your source of income especially when you became rich.

So basically you are worried that the taxman will be coming to haunt you that you had been trading in Bitcoins and that you did not pay your taxes, I don't think I am worried as there was no law that I had to pay taxes and I am not going to pay taxes, as simple if I wanted to, I would not buy Bitcoin. Even if we hide all the history, our IP address can be traced back to us any way to get rid of that. I keep on deleting from my mail box Bitcoins mail. That's the only thing I know.

To be honest, I haven't thought much about keeping records of origins for crypto that I obtain.

I do, however, maintain simple bookkeeping on my earnings and, when significant, my "diversification". I can't really say that while keeping a serious face, though, as the majority of my alts multiplied in value many times, but as I held next to nothing, I have several dollars worth of a lot of alts.

Simple excel sheets and a txt file are what hold all my information on crypto though. So I roughly know how much I've earned and where I keep them.

When I was new to crypto I did became careless and being less knowledgeable didn't help. Lost some few coins because I didn't kept back up files. Not much but maybe around 0.2 btc all in all. Now I am tracking all my crypto with records and lots of back up files. Tt's very good to see some of these coins you think are shits but at now at material value already.

No I am not really keeping a records of my crypto's,
I mean I don't see why would I save some of the history of my transaction.

Have you reported your Bitcoins earned here from campaigns or any other side gigs to the tax agency? I guess not.

Hello There ! i'm not keeping any crypto record . when any one include with crypto trading here is all history shows . When i buy or sell and all details show in my crypto account so no need to records.

Irrelevant. My actions don't constitute the law.
You can be sure as hell, that if you ever run into trouble for not declaring your income, "b..but pawel7777 from the forum also didn't declare those" won't serve you well as a line of defence.

Really? You wrote a lengthy list of guidelines and all I asked you about is if you are doing these yourself. I have already consulted a specialist in my country so I know what I have to do. But do you oh fellow keyboard warrior (specialist)?  ;D

Till now i have not made any records what so ever,i am yet to join an alt coin signature campaign that provides coins and all my investments are still in that respected coins,so i am not worried about anything now because it is not a very huge amount,until i start cashing out i can do what ever i want. :)

When a country accepts bitcoin, it puts it into the legal and taxable system, which is a bad thing for all of us. On my own, I prefer a freer bitcoin, freedom will make it easier for us to work with bitcoin, and we will be more comfortable. Although when governments adopt bitcoin, its value will increase higher, but I do not want to be managed.

I really dont have anything to worry here, my government doesnt take into account money earned on the internet, there is no way they can keep track of it, there isn't any system to do that at all. so no need to keep these records for me, i would if there was gonna be a price though. lol

I haven't wrote a single 'guideline' and stated multiple times that I'm not an expert.

Again, my actions/inactions are irrelevant to the topic. You're derailing and inflaming discussion to earn some easy money from your sig campaign. That's all there is.


You haven't consulted shit, you're just spouting nonsense because it makes sense in your head. Lets verify it, what "specialist" was it? Care to provide his details? Which country are you based in?

since i use coinbase to convert btc to fiat and visa versa i just print out a buy/sell list from coinbase and hand it to my accountant.

i sold more that i bought last year so i had to explain what mining was, as thats were the bulk of my coins come from. i can prove it by printing my wallet transactions showing weekly deposits from nicehash or whatever pool ive used for that year.

so basically ive paid taxes to the government best way my accountant knew how to figure it.

figure if the irs comes after me ive done my best to do the taxes right and ill have my accountant to back me up. might have to pay some if the accountant did it wrong but at least i cant be accused of trying to avoid taxes.

edit: my accountant said he had one other person claim bitcoin on his/her taxes. and my accountant does hundreds of returns.

Not really, everything is already on blockchain. Simply seeing the history of the address says it all. But I really don't think that they are putting tax on cryptocurrencies. In my country, they are just taxing the exchanges. Regular bitcoin users are paying no tax at all and they are not required to pass any form of income tax. At least that's the case for now, it can all change one day when the government wakes up and thought that it might be a good way of corrupting more money if they tax bitcoin users especially those that have made millions. It will be such a slap in the face when that happens but whatever.

Like the previous guy said, if you earned a couple of bucks from a sideline, will you include that in your report? Of course not. Bitcoin is just like that but sometimes your earning from trading and signature campaigns blows up that you're not sure if they count as a "sideline" anymore.

you mean bookkeeping., for tac purpose, then nope.
i dont make that much from crypto coins trding so have not done anything about it., if btc reaches 20k then i might have to do something about it.

Why would we keep them are you crazy? there are companies dedicated to destroy all the links between you and your bitcoins a good example is Bitmixer, no government on earth could catch you on any transactions sent to mixer or received from them because you are literally and intentionally giving away your coins in trust of the mixer though and receive them from an anonymous end.
Stop scaring people to give in so easily.

Eh?

If you end up with several million dollars in your bank account should you want a house or something, the likelihood is that someone somewhere will politely enquire how you came to own them.

What are you going to do? Shout' Bitmixer' and jump into a lake and stay submerged until they let you keep all of your money?

I cannae believe the level of naivety on here sometimes. Just because it's 'on the internet' doesn't mean you're somehow let off all the crap that everyone else is subject to.

Crypto profiteers may feel that they're special cases. The Man will not agree with you and enforce that in a rather distressing manner unless you have your shit together.

For me I don't record my crypto records because it still small amount and easy to remember for now, I just list my bitcoin wallet addresses and url in case I forgot of those wallet.

I keep records to an extent, some sites went down and lost logs cough cavirtex and the sort, but have legacy sites
Others have losses like btct bitfunder havelock that besides burnsides and havelocks old logs some data is missing.
So the records cover it to an extent.

In my country you get tax exemption up to a specific amount, so you do not have to pay tax on that income, if you do not exceed that amount. I just make sure that I stay within the guidelines of these tax exemptions provided. You also pay tax on Capital gains, so you move within fiat systems, between the allowed parameters. I do not mind paying taxes, but if they allow for tax exemptions and it is within the "rules", I will use it. ^smile^ 

So far not, but I rely on the transaction records in that is in online. So far I am not paying tax no records needed. Because I can see all the transactions I made online, I can see them all there so if some one ask me where did I get my money I can let them see my records online just give them the account address or where ever they can see the details of where I get my money.

Technically, yeah.

It is obviously best if you keep track of every transaction that you make, note down every change address that you use so that if there was some sort of tax problem with you having bitcoin then it can be solved quickly by providing these necessary proofs.

What I do is i keep notes of basically what each transaction is spent on on my wallet. This way, i am able to keep track without keeping every online receipt which is really quite a hard task to achieve.

But still, i've seen many people that don't keep track at all - it is extremely rare that the government is going to chase you down for bitcoin related taxation issues, because there are so little people using it atm that it's not worth it. I haven't heard of anyone personally, either. Most of the times they don't even know that you're using btc unless you're blatantly transacting thousands from your bank account to coinbase daily.

Yes that's true, even me I don't track keep track of my bitcoin or other crypto-currencies for now and I just let my bitcoin wallet provider to do such thing of record keeping of all my bitcoin transactions.

I'm living in a country where BTC isn't taxed, The tax system itself is indirect putting the taxes on items and goods rather than taking it directly from the citizens, so I am already paying these taxes whenever I buy, Of course there are regular tasks on jobs and house property rent, but nothing else.

To spend right, being it bitcoin or fiat one needs to keep expenditure records which will definitely prevent wastage and panic buying. It also aid asset valuation since you might not remember the prices of items you bought several years earlier and their selling price currently.

And which country is that? Funny how people share all those amazing stories from their countries but shy away from naming them.

Your post doesn't make much sense. If the tax is included in the price of goods/services (VAT?), then, if you provide goods/services for bitcoins, you'd also need to charge tax (unless your government is sabotaging themselves by specifically exempting cryptos).

And not having personal income tax, doesn't mean you don't have to prove the legality of your income.

Bitcoin is made to create your records.But you said about the history of my transaction.Then you should need to know what's going on with that is it safe or not.Because it is up to you how your skills are according to bitcoins

It will definitely I do to save the data, at least screnshot of the proceeds we get so far, big or small amount of money to avoid things we do not want in the future.

I'll say that I never saw bitcoin as a thing that I would keep records of them !
After reading this post, started to notice that it might be a thing to do eventually,  to have all of it accounted and if someone asks from where it came, you have the answers for that because you recorded it all! With cryptocurrency i bet most of the people don't think of keeping records, but it might be something that should be done, so we can keep track of every ingoing and outgoing btc from our accounts.

I'm also taking screenshots of my transactions doesn't matter they're big or small in volume. I also take notes about my important trades. Exchanges gives some lists but they may disappear in future.

Interesting website but I don't understand which option I should use when I sell some Bitcoin for example. When I buy I choose Trade (first option), but when I sell which Out option should I use?

https://i.imgur.com/skhmED1.png

Yes right, this is the best era for cryptocurrency investment, I know cryptocurrency about a year ago and still keep records.

I use a website which calculates all of my gains and losses and acts as a portfolio for me.

Yes, I kept records of all my crypto currencies especially bitcoin although my wallet will always shows records of transactions and when ever I exchanged to fiat I recorded the amount of money received, this had been really helpful for me to know how well my trading moving.

there is no reason to keep tracking your altcoin, because every single of them will go to bitcoin as a final result you are better off tracking your bitcoin activity

which is not a big issue, you have all the records,in your exchange, and there is the blockchain anyway that can prove your money, but i would not reveal my cold storage in case of declaring

bitcoin itself is not taxatable anyway, just records your dumped bitcoin

I haven't had to do any tax reporting yet, but I'm using cointracking.info to keep track of everything. Pretty pleased with it.

But I'll soon get to to the point where I can no longer use the free version and will need to decide whether to upgrade to the Pro version.
Pro version is about $130/year. I think this is a bit steep. I'd happily pay $70/year though.

Does anyone have any recommendations for alternatives to cointracking.info?

Of course, certain records on crypto currency are kept, I duaia, everyone. They must be orderly so that they can be used. Special attention should always be given to secret keys. In the paper version, they should always be reliably hidden, regardless of whether they are often treated or not. Because if they get into bad hands, it will be very bad.