Bitcoin Forum

(I am in the USA)

Hi all, I won a decent amount (multiple coins) and don't have any clue what to do. I am unemployed and dont have any income this year outside of the unemployment that I had coming in. I turned a $100 deposit into a massive gain. The casino is totally anonymous like I said so there's no record of me actually doing any of this.  

Okay, so: I want to sell 2 btc sometime in the near future. Maybe in the next week. Is this safe? Can I just do this and then talk to a CPA? Or does my situation leave me screwed? I can just sell these coins and claim it as what though? Do I say I won this gambling? Do I say I bought them? I have record of buying a decent amount of coins over the last few years. I would just gamble them and break even, gamble and break even, accumulated over years. Just a bit of entertainment and what not, but constantly breaking even meant I had a few transactions.  

However, most of these were on localbitcoins.com and not a real broker or otc or whatever.  

Can I just say I bought the coins on localbitcoins over all these years and now I am selling it? Or would that just royally fuck me as capital gains? But then I read if I have under 40k income I pay 0% capital gains. So does that mean income before I sell my bitcoin? Or would that mean if I sell 40k in bitcoin I am now over that 40k threshold?  

ANY sort of advice at all is appreciated.  

(MY BIGGEST CONCERN IS ALL LOCALBITCOINS GIVES IS A SPREADSHEET WITH DATA AND THAT JUST STRIKES ME AS USELESS BECAUSE OBVIOUSLY A SPREADSHEET CAN BE EDITED. IS THERE SOME WAY TO REQUEST SOMETHING MORE OFFICIAL FOR TAXES?)  

(HOW DO I CONVINCE THE GOVERNMENT I AM NOT LAUNDERING MONEY?!)

First of all, are casinos legal where you live? is it legal to use online casinos there?
if I were you, I would pay  all taxes and report the truth, that I won it in a casino.

Be careful before sending money from casinos to exchanges in USA, specially coinbase. Your funds might get frozen. I would make a few transfers before sending them to an exchange.

You will have to ask someone who lives in USA about  taxes policies, because they are different from one country to another.
Where I live (Brazil) you are able to sell 0.3 BTC per month without any tax. But, as I said, I would pay some to avoid trouble.

If you can do it, make it a P2P trading with individual so the money doesn't have to go through financial channels that could raise some eyebrows. And if you do it, make sure that you do not blow all the money on shit you do not need, forget the wants for now and focus on looking like you only can get by for some weeks.

Damn I was ready to sell on Gemini. Are you saying that is a bad idea? I don't know how I'd manage to sell to someone in this amount. I have sold small amounts before, but what am I gonna do with all this cash?

You can lie and hide your winnings and potentially lose everything and go to jail (it does happen), or you can suck it up and talk to a CPA and pay whatever taxes need to be paid and enjoy the winnings without worry. Your choice.

Are you that sure it's "totally anonymous"? Did your deposit to the casino come from a source that cannot be linked to your identity?

If you purchased Bitcoin from somewhere using your personal information (or even from ATMs without KYC) and then deposited on the exchange without trying to break the link between your coins and your identity (through CoinJoin or mixers), then you might not be as anonymous as you think. Your IP, the address your $100 came from etc all help with your identification unless you've taken maximum precaution.

If I were you, I'd either hide it all or tell the truth. Declaring the winnings through false statements could get you into an even bigger issue than not declaring anything at all.

Talk to a CPA. From my personal knowledge, capital gains are only paid when you either sell your cryptocurrencies for fiat or purchase goods/services using it. So if I'm right, if you ever sell your BTC for any fiat or purchase anything using it directly, you should pay taxes.

I don't think there's a problem as long as what you declare is the truth. But talk to an expert who also knows stuff about cryptocurrency earnings and see what their opinion is. Especially as you said you have massive gains, it may not be worth it to act based on some strangers off the internet when you could just spare a few dozen/hundred bucks to find a 100% legal way to do it.

I know how hard it is in the US to hide big profits. If you had 1k USD to withdraw I would just set up a p2p trade and buy myself something nice with cash, but in your case it's a lot of money. Even if you withdraw it anonymously it's going to be difficult to hide, unless you want to hold cash somewhere in the house and spend a few hundred every month.
A one time win like that is going to be classified like money laundering. People often win similar amounts in casinos and you have a clean record (I hope). I'm sure that once you pay your tax you'll be able to enjoy the rest.

You can seek guidance from a CPA or a lawyer to hide your winning, IMO, its not necessary to report is as in the first place you won it in an anonymous casino, I'm pretty sure they know how to handle that kind of winning that will make you safe from any tax liability to the government.

Many online casinos which accepts cryptos are not allowing people from USA to play there, so first of all you need to withdraw the funds into a freshly created wallet before your account getting blocked for violating their terms.

Then you have no other choice than going with P2P, or find someone locally is the best option. If you are not in a hurry then just cashout funds partially from time to time so you won't get caught for big capital gains tax violation.

0% capital gains rate for adjusted gross income (I think that includes the money you get from selling coins but I am not an accountant) up to $40,000.

So if you're selling a couple coins and that will be most of your income: sell one this tax year (before Dec 31), and one next tax year, so your income is below 40k both years.

Declare the sales as capital gains; claim that you bought them on localbitcoins years ago at a low cost basis (e.g. $209 per coin).

You are extremely unlikely to get audited, and if you are audited, the IRS person is extremely unlikely to question your cost basis or care about exactly how you got the coins. They are looking for people who claim losses instead of gains, or who don't file returns at all.

I am sure that there are anonymous ways of exchanging bitcoin, for example, for real money in a personal meeting, that is, they are not sent to the card, but are issued in person. Tracking transactions most likely occurs through bank cards, so the government is unlikely to know about your cryptocurrency transactions. And this is just one of the possible ways. In general, I would like to see a screenshot as a confirmation of winning in a casino.

Avoiding tax responsibilities is not a good idea specially if you are living in USA in which taxation is really strictly well monitored by the government but if you want a fully peace of mind like avoiding jail then the best way is consult a CPA or any lawyer because some of them will advice you on what to do on avoiding big tax responsibility in exchange for their professional fees or maybe you can send your BTC to your trusted fellas outside the country in make them sell your BTC less of tax for you.

I am against tax evasion in general, especially in a country that has strict tax laws like the United States. As long as you say you won a lot of money in the casino why do you pay taxes? I do not know how much tax costs in the United States, but if you do not want to pay the tax, I think you should use the services of a bitcoin mixer such as ChipMixer, this will make the Bitcoins completely anonymous, and then Bitcoin can be converted into dollars via a broker, thus avoiding taxes completely.

The first real thing is to get the coins into a wallet you can control. Then start studying a way of using them. I know it's not life-changing but you could buy loads of gift cards and be content with it.
Anyway, before that, make sure you withdraw your money. Then in one way or the other, you'll find a way to use the coins.

So your main problem right now is just creating an excuse just you earn your Bitcoin on another way besides from the truth which is gambling? I don't think you have to worry about anything if you just reported that you bought it in a direct p2p manner. Also just skip the part where you bought your Bitcoin and just hold it for years since obviously there are dates that are recorded on blockchain and the taxing authority can verify the date on when you have received the 2 Bitcoin. If they don't have the chance to verify on who the sending address is I think they will just believe you that you bought your Bitcoins directly from person to person.

If I were OP I'd rather just be honest and declare everything as is. That's to avoid possible legal repercussions in the future. It's hard to provide clear proofs on things that didn't actually happen.

The man/woman is living on unemployment for a year. So I guess it is even harder to claim that he/she bought the 2 BTC through P2P. For one, he/she has to provide proofs that despite being unemployed he/she is still capable of buying BTC. Plus, of course, the documents supporting the source/s of funds should also be provided. And, finally, the blockchain is transparent. It is impossible to make up transactions.

so you won 2 BTC after deposit 100$ that was crazy bruhhhhh if i were you i mn not gonna withdraw all the money if you scary just don't withdraw all of it deposit into your wallet not exchange and withdraw like 200 buck or something

I think his main is his winnings coming from a "anonymous" gambling site which chances are might not be registered or allowed to operate in their country that is why he is having problems telling the truth, they might just confiscate his winnings just because he got it from an unregistered gambling website. I'm just giving him some kind of excuse which makes his winnings a little bit easier for him. Either way he still have to pay taxes which I believe he would still have to pay his capital gains on the time he is claiming in buying it.

Well all together you will have to convert your BTC into usd. So try Paypal because paypal is worldwide acceptable and there will be any need of to pay extra taxes on your amount . Because paypal will already deduct the amount and the rest of the amount you will get paid. We as a honest citizen should not cheat govt. so paypal will be the best option to get the money without any trouble. Because you already provide your kyc document for verification.

For me personally I think you are back into the corner here since chances are you are playing on an unregistered gambling site that is not allowed to operate in the US and you want your earnings to make it look like it is not laundered somehow. In this kind of situation I think you must come clean just admit that you won your cyptocurrencies in a anonymous gambling site which you need to provide to them, I don't know the legalities here whether you will pay a fine or they will confiscate your winnings but you must just face it head on.