Bitcoin Forum

Well this is interesting..I have 100 btc ...bitcoin cash came out.....so I made like say 70,000 usd when
(BCH)guessing at $700 usd when BCH, hit the world. Thus according to my CPA and the link below, if you are a US Citizen you need to pay taxes on this supposedly) In that IF you held bitcoin more than 1 year and 1 day at 20% capital gains. If less than, 1 yr and 1 day its at 40% capital gains.

So again, say BTH hit the world at 700 bucks ..that is 70,000 usd and I'd owe the IRS on this pump of money
out of thin air 14,000 usd at 20% capital gains...even if within the week it drops to $12.

link

https://makebitcoingreatagain.wordpress.com/2017/08/02/bitcoin-cash-and-taxes/ (https://makebitcoingreatagain.wordpress.com/2017/08/02/bitcoin-cash-and-taxes/)


MY strategy is to 'ignore' this....in that I HAVE NOT MADE A WALLET YET and as far as income
goes for mining...if it has not hit my (not made yet) bitcoin cash (BCH) address and wallet...that don't exist.


Otherwise, stuff like byteball (based on airdrop of btc address) and say bitcore...or other air drop'd
coins would simply...add value to my account without my knowledge...and then dump after the pump.
With you 'unknowingly' holding the bag...till the nice IRS man told you such :(

AGAIN THIS IS EVEN IF IT GOES TO NOTHING IN THE FUTURE...STILL, OWE ON THE INITIAL PUMP.
..again this is w/o any action on your part or you making a wallet. Nor any control on alt coins or
further bitcoin forks ...making money on a nice pump and dump racket, at your expense.

Myself, I am going with the idea, that if BCH has not hit my Bitcoin Classic (BCH) address wallet..yet (virgin)
..(does not exist) ...it is NOT income yet (like
mining...taxed when it hits your wallet and btc address, not the instant is it mined) because I shall claim 'cluelessness' of BCH existence until say in the future it is pointed out by the nice IRS man that I DO have free money. I will then 'gush' thank you and pay the taxes
if it keeps value, or I grovel, bit time,  and pay the above taxes, even when or if it dumps to 12 bucks.

This to me seems the ONLY sensible solution, otherwise....EVERYONE with any significant BTC will go to jail I guess..especially if the coin tanks to 2 bucks. I can't see a lot of people mentioning this to their CPA etc.

Can you imagine Satoshi coming out to the world and as soon as he claims from say one of his 100,000 btc wallets,
a previous never used, BTC wallet (if he is a USA citizen) the IRS coming along and saying, hey Satoshi, you also owe on a further 14 million
dollars of air drop'd BCH Bitcoin Cash out of the 700,000 BCH windfall...we will take a 14 million dollar check :)

Anyway, these are just my thoughts. I agree it is unlikely and unworkable, but the IRS is suing coinbase for ALL its customer base records, 
so that does not mean they will not try to be this stupid about this...this would be a great way to keep your job at IRS ..stupid or
not..all that shiny money to the IRS coffers! :)

Thoughts?

(Again all this is speculative and unlikely to amount to anything...but does get one's attention) :)

Thanks for reading this unlikely horror story and rant.

Take the poll, please.

If that was true....mining would also not be taxed. The catch is you are getting FREE money out of thin air. The IRS
does NOT take kindly to that, only taxed when it hits your wallet address.

 Also the article above, I quote also makes my point, so it is NOT just me)

I suppose it could be taxed as a 'gift' that would be worse.

I hope you are correct. Just saying this is another wrinkle in taxes with crypto that will be looked at by IRS.

But again, I hope you are right and the IRS does look at this like a 'stock split' ..you don't touch it ..you are OK and
no taxes owed...till you spend it ...like purchased crypto.

I would hodl your btc and bcc and don't convert to fiat usd dollars. So there is no capital gain untill you sell it. Let's hodl it :D

Again, hope you all are correct. BUT it is free $$$....but I take everyone's point...

LIKELY, you would not be in any trouble till you wanted to spend it.

But then again, I never expected the IRS in 2013 to call (for tax purposes) bitcoin and crypto LAND either.

that's the catch...they are NOT imho just gonna let the 80,000 it was worth at the pump if it goes to say 12 bucks ...tax burden go away (the IRS I mean)

thus what is the senario if you get FREE money...I did not buy it and I did not mine it

Again the article I guote takes the position that you are under the gun on this and just have to cough up the cash...

I guess my new question is..how does the IRS treat this 'heavenly crypto gift" ..... I feel I missing a further angle on what they could do.

Usually we just have to pay taxes on realized gains as it is normal income subjected to a particular tax rate, we don't have to pay taxes on 'paper gains' as they are not real, but in USA can be different, you should look for legal advice if you're worried about this.

Perhaps BCC can be considered as dividend...

Hope your house is less value than your cypto. As much as they spy on its citizens, I am sure they have already logged your ip. DUMBASS.

i don't quite get it, though. there's been no actual transaction. and you don't have a BCC-compatible wallet, so you don't even have access to the funds. you don't possess them and never did.

this CPA seems pretty dubious.

Wow you are so rich by now! You literally made something out of your bitcoin you are hodling. This is why cryptocurrency is great. And you own 100 bitcoin? Wow that is so good. The ratio for 1 bitcoin is also 1 BCH right? So if you are owning 100 bitcoin, you will get 100 BCH also. Well it is a free money so cheers for it. And there is another giveaway but I am not that much aware of it but there is. Wait for some announcement for that. And thank god there is a split! Thank you bitcoin fork.

Miners do that as their job therefor they will pay income tax. If you make money from trading or investing then you will only pay capital gains on your profits once you cash out or this is how it works in the UK at least but I assume it's the same in the States.

so if your BTC is vaulted on Coin Base and they never support it(bch), what happens ? still have the liability and never received the Gains?

people who will get bitcoin-cash bcc those already has bitcoin in their wallet more bitcoin you have more BCC coming , newbie as me has no chance to gain a lots of $$$$

You apparently don't understand even the very basics about bitcoin. There is no such thing as address/wallet "exists" or "doesn't exist".


Three is no such thing as "making a wallet".


The same nonsense.


Not surprisingly you don't understand how mining works either.


So you just publicly declared your intent to commit a crime.


There is no such thing as "claiming" bitcoins.


Another nonsense. In reality IRS is being sued for its subpoena being abusive, harassing the taxpayers and not reflecting on the good faith, and so far the court rulings have been favorable.


Yes, I have a thought. You sound like a 12-year-old.

What is the difference between an employee who receives company stock or stock options (that does not have to pay capital gains or income tax until they sell stock) and a miner that does not sell mined btc?

I've been legal since day one and mining 2013. Been contacted by SEC 2x by banks. I'm legal as hell. Thus the CPA. The only way to mine and move $$$ to btc in usa

To those pm'ing me on how to hide assets. Figured I'd also reply here.

Yeah I think this is the correct assessment. And I believe this is the same in the UK, and some have experience already with gambling winnings (which are not taxable anyway, but if you cash out to fiar then...). Things change when you convert to fiat, the fiat value is exposed to VAT in UK and corresponding exposure in the US.

I think I will extract my new BCH convert it to LTC and hold for a while. I always take a few thousand and get gift cards from gyft for places I like to eat and places I enjoying at like amazon walmart and sears etc. I figure I need to buy stuff anyway. I know that don't really address what your talking about but you could do this to whittle the total amount down some to help "ease" the tax burden. 8)

But the gains arent realized until actual conversion to capital. As stated earlier in the thread, converting this to fiat over time, or simply not converting this to fiat at all and turning it to a usable crypto should spare you the brunt of these taxes*. Capital gains tax always punishes quick gains (why the government effectively penalizes people for trading well, I do not know)

*about this. Ive been playing with this idea for a while, as someone that gets paid in crypto for a salary. If you never convert the coin to fiat, but realize value from a transaction, are you subject to anything more than sales tax? For example, if you could purchase food with btc directly, or via a crypto debit card. since YOU never made the conversion to fiat (the merchant does) and sales tax was paid (also a merchant responsibility), it seems like a property trade of equal value, a swap if you will. i havent seen a law about penalizing swaps, but, they tend to take some interesting interpretations of tax law, if it suits their case ;)

To be legal it has to be denominated in sovereign currency, you can pay people in bitcoin but you will pay X amount of euros in bitcoin, and that's what's in the receipt, euros, not bitcoin.

SO I see that in US IRS will have nice mind fuck what to do with that stuf ...
With IRS everything is possible but taxing paper gains is stupid.
Until you get real $ in pocked i don't belive in any taxation becouse anywane can prit price like 10000$ per coin and what ?
You will never able sell for that price but you need to pay tax from that opportunity come on...

I would do nothing.

If you convert to fiat pay income tax. Yes it's more than capitol gains but... it works out better for cryptos this way to not encourage the government trying to fiddle with something they have no purview with.

For all intensive purposes BTC and BCC are another "state" outside of the USA (and all countries), so long as they cannot provide basic services for them. And the reality is they can't ever really do that until they have a majority of miners. That or the government needs to have huge reserves of BTC/BCC to compensate lawfully judged court cases and claims. Yup, they can't do any of that. There is a reason none of this has seen any real challenge in court. At some point the USA may decide the value in aggressively seeking to steal capitol from cryptos with unlawful actions, or expecting to prosper from the economic gains by allowing them to flourish... This is where everyone needs to be politically active and aware.

I'm not saying I know for sure how the IRS will come down on all of it, it's not as if the government has never done any wrong.

Frankly it's literally impossible to audit all the crypto movement. For the same reason regular stock trading has "wash" rules where so long as everything stays in the exchange then it doesn't fiddle with capitol gain/loss concerns. However that is easily tracked because despite the high volume, individuals are not making a gazillion trades 24/7 like with cryptos. Plus regular stocks cannot be infinitely divided. Sadly there is "wash" law for cryptos. At best they can exist in a gray area of no-enforcement (unless CoinBase starts handing over profiles). They need to tax businesses in the USA like CoinBase, as they operate within the purview of the state fully.

A day may come where you actually need to do something. As is they can track it all, if so inclined. But that doesn't mean they want to, the returns they are looking at are not pretty by going crazy on everyone.

The only thing you can hold hostage is your sausage!

BTW. Provocation increases tolerance. Duck! Enemy in the head.

No they won't. I'm not a US citizen, resident or anything else to do with the US. Never have & never will. So the IRS can go and shove it where the sun don't shine  ;)

My guess is that the IRS will not care, as long as you are not converting your BCH to fiat. Once you convert it to fiat, then you are liable to pay taxes as ordinary income (unless the transaction qualifies as long term capital gains).

In time (if not already) the IRS will definitely care about crypto-to-crypto capital gains. But their resources are limited, and it's easier for them to go after big fish leaving paper trails in the legacy banking system.

In this situation, I really don't see what all the fuss is about. If you don't at the very least import your bitcoin private keys into a Bcash-compatible wallet, I don't see how you have "realized" anything, or how any "transaction" has occurred.

Further, there could be millions of different forks of bitcoin that copy the UTXO set. We can't possibly know about the vast majority of them. If you move hard forked coins (and more importantly, exchange them for another currency), then we can talk...

It really depends on you will use your Bitcoin Cash. Obviously we all know it came out of nowhere and it is free we can explain that it is really not income. Or the best thing to do is to be quiet about it and learn how to do out books, assuming that you have 100 Bitcoin you may have a good business also you can fake receipts and much the value of Bitcoin Cash you converted to Fiat its that simple.

This would be my assessment as well. For a comparison, you can look at how stock splits / bonus shares are taxed in the US. I doubt if they will be taxed until you actually sell them. The same should apply to Bitcoin Cash as well.

I don't understand what you're even talking about here. Law doesn't work like that even in the US, where it's completely weird, if you ask me.
First of all it doesn't matter what the price was when BCC hit the exchanges. All of their deposits and withdrawals were blocked, so only a very small amount of coins were available to sell and even after that you needed over an hour for a single confirmation ( some exchanges required 20 before they showed the balance).

Another problem is the acceptance. Just like when you're inheriting something you can accept or forfeit it. Some people didn't install a BCC wallet and never did anything with their gift, so we can assume they haven't accepted it or don't know it was given to them.

Finally, addresses aren't linked to your real identities, so although the government can demand taxes, enforcing this demand is impossible. We all know that law that can't be enforced becomes nothing more than a fun fact we can mention at parties.

This is the clearest explanation for why no taxable event has occurred. You can't realize gains if you haven't even acknowledged the receipt of an asset. And most precisely, an airdrop/giveaway seems to most appropriately be seen as a "gift." Gifts are not taxable in the US. Rather, the donor of a gift may incur tax liabilities by giving to others. But the mere act of receiving a gift (and not realizing any capital gains on that gift) should not trigger any taxable event. Not an attorney, but the OP makes no sense to me.

One aspect of the IRS guidelines that people often overlook, including many CPAs, is that the rules cover "convertible" assets. Most altcoins and especially forks are in no way convertible to fiat or goods/services. You can't place a fiat value on something that is not directly convertible.

In the case of BCH, many people have no way to convert it unless they sell it for Bitcoin and then sell that Bitcoin for fiat or goods/services.

If I forked bitcoin on my desktop computer tonight and sold .00000001 of the new fork coin for $100 bucks, would that mean suddenly every holder of 1 BTC suddenly owes taxes on 1 Billion dollars in "gains?" There is a real lack of guidance in what constitutes as a convertible digital currency at this point. With so much variance in market availability, liquidity, and price discovery there simply is no way to reliably or fairly determine tax obligations on these sort of things.

Ultimately, if the IRS wants to achieve maximum compliance and avoid litigation, swapping should be considered a "like-kind" trade and all digitial currencies should be taxed at the value they are given when converted to fiat or used to purchase actual goods or services. The cost basis will then be calculated based on how much was paid for the initial coins. In this scenario, many successful traders would eventually be taxed at the full value with zero cost basis.

That is a windfall for the IRS and a fair and simple way of gaining compliance.

After reading the first few lines of Ops submission, I disagreed with some of the salient facts there. Capital gains arises when you sell and the value at the point of sale. I did agree that 20% after one year is on the high side as in my country its 10% although bitcoin sale does not form part of it. Now in the case of BCH, technically, its not your investment rather is it your sweat its free money and asking for 20% is not too much and the 20% remains the same whether you sell for 12$ or you sell for 700$ the moment you sell, it becomes realizable gains.

Only if people like you faithfully accept it.

No government has purview with cryptocurrencies. The harder they try, the more their country loses valuable resources.

Thank you OP for this posting, it seems there is various opinions and facts out there regarding this and many other topics, It's just on of those things it is what it is I guess....

Is there a clear answer to this?  What if you never claimed bitcoin cash nor bitcoin gold?

What if you claimed it but didn't sell it. 

What about people who never bothered to claim it due to it being complicated?  Bitcoin gold i heard is very complicated.  Also there been lot of hacks in wallets due to people downloading wallet to claim cash and gold etc.