Bitcoin Forum

 :D

Protip one: Don't reveal on this forum you're loaded. Now you will get friendly advice with links in them to get your ip-adress, then targeted hack attempts..

I am not a tax agent and bar far not an expert however I have a theory on this.

Since no government (I think) has acknowledged Bitcoin as currency, so long as you hold it in BTC, it essentially does not exist. When you cash it out, it's like receiving a lump sum cash payment form someone, which would need to be declared as income.
So at worse you would only pay tax once, unless you declare the BTC at it's fiat value as capital and have to pay capital gains tax.

Lots of q's around this obviously but with the right accountant you should be able to limit to paying tax once.

Take small bits into buying a existing internet business, and use that as a solid source to use as for taxes.

Or sell its portions for cash and get into stocks that can be justify as a income source for your house etc.

Bottom line, your trying to clean out your money. Prevention is better then a cure.

is it all mined? if so then you have generated new cash right? how can that be an investment if you have not paid for it? the mining hardware is a capital investment sure.
If on the other hand you bought into it and made profit then it would be no different to any other commodity such as gold, silver or other.

That's great. Sadly not everybody is that careful! :)

Best wishes!

In my country money earned from sex is not taxable. Just saying  ;D

You sayin' he should start pimpin'?  ;D

let's stay on topic guys.

yes but is it mined or purchased btc? if you mine it, I can't se how they can consider it anything other than the money invested in hardware and when you finallt convert it to fiat.
If you purchase Bitcoin then fair enough, you've invested in a commodity.

See in Australia lottery winnings are not taxed, nor are other prizes. So, if you could extend that to "I won a block" then is it winnings, investment, capital or other?

I thought most wont even consider an audit since we just laid off a lot of IRS agents lol.

Buy the rental property in bitcoin directly!

No cashing out required!


The real cashing out is actually not having too.. 

Either that or (Very off topic) perhaps taxation should be simplified and be made fair across the bord. Like a flat value added tax on everything.... The rich, corporations, the poor, anyone pays the same % on every transaction.

Back on topic, you can buy any asset that is taxed very little sell it at a slight loss (smaller than the other tax) to an interested buyer (pre-arranged). The item would be any such thing you can buy for BTC although at this early stage that would be quite difficult an asset such as a certain amount of gold or silver could be used.

You use BTC to get the gold, you give it to whomever who buys it for fiat.

BTC to Gold to Fiat....

Difficult? more like impossible, the person selling you the property will have to declare the sale to the government and how much money he sold it for and to who and it can't be hidden. So even if you purchase it off the bitcoin you'd still have to pay the taxes for, buying bitcoin, selling bitcoin and most prolly for purchasing the property too.

I hear its about to get alot easier!
http://www.coindesk.com/smart-property-colored-coins-mastercoin/


http://www.businessinsider.com/this-home-can-be-purchased-with-bitcoins-2013-12?op=1
 

Well that's true it will leave out the sell btc tax and I think that's the best option, everything else would be a bit illegal. But it can still be tricky you might also have to detail them on where you got the money to acquire that much BTC.

maybe i mined it? maybe i spent $1000 on BTC when the price was at $2?

Yeah you could say that you bought it real cheap in the market when it was $2 but I don't know if they will ask for some proofs regarding that or not.

Do you have to cash out, all at once? If you released smaller amounts every year, it would be a more manageable tax bracket.

And I agree with you, once it's converted to fiat, it's taxable. {Capital gains etc}

You should go speak to them, and negotiate a reasonable payback rate, and factor in the tax, you would have to pay, and subtract it from your coins.

Trying to evade tax, would just end up wrong for you.

I would buy stuff for friends at discount, and cash in on the favor later.  ;D

just to be clear, i'm not trying to evade paying tax. i want to pay and be in the clear. i just want to pay the least amount that's legally possible.

This is correct. If the IRS thinks you are in the wrong, it is on you to prove your position. It is also on you to keep records and so if you can't show the source of your income, they will treat it as the maximum possible tax rate.


If this is treated as a barter then you will have received income of the value of the property, which will be taxed as income and might be more than using long-term capital gains.

If you originally mined your coins, then it's going to be income, but if you said you received them when the price was low then that's good news as your income will be low. However, between now and then the price has risen so there will be capital gains taxes to pay.

If you bought them at a low price, again, if you cash out you will owe capital gains taxes. The rate is banded depending on how much and how long you've owned them. But since it sounds like it's been more than a year, depending on your other income, you'll be able to get up to approx. the first $400k at 15% tax, and anything over will be 20%.

If you have only owned the coins for a year or less (or traded them during the year), then it is going to be taxed as income, up to 39.6%.

If you can't prove your cost basis in an audit, they will take the worst case, i.e. income.

There is no simple tax avoidance scheme if you just want the cash now but your accountant may be able to come up with ways to defer taxes depending on where you put it. Transferring into trusts, for example.

i heard about long term capital gains is taxed less, but are you sure it's 15% for the first 400K ?

trust's have not been discussed and i have no knowledge how they work, can you provide an example?

why would you need to tax it?

sell them at localbitcoins.com

get them in cash, no taxes ;)

who says you have to report your coins to the IRS?

you can report it to any taxing agency in the world. they all want your money. it's stateless money. create a virtual office in Ireland and open up a bank account there and deposit all your exchange fiat into it.

Long-term capital gains are taxed at 0% when your income is less than $36k (for a single person), 15% when it's less than $400k, and 20% thereafter. Income is anything you have earned.

For example, say you are paid $20k/yr, you can have about $16k worth of long-term gains taxed at 0%. The next $365k of long-term gains is taxed at 15%. Anything over is going to be taxed at 20%. So if you had $300k long-terms gains in one tax year, you'll pay about $42.6k in tax. (all this is approximations because deductions, exemptions, etc will change the value and if you're married, the limits are higher).

Trusts, donations, contributions to retirement, are all ways to defer taxes but typically because the money isn't for you or now,. It isn't a way to avoid taxes for you but is if you are planning to save or give money away.

You are going to pay taxes somewhere. Long-term gains rates (assuming your coin are long-term) are a good deal.

i noticed if your filing status is "head of housedhold" instead of "single" you can report up to 49K. gonna look in to how you can qualify for that filing status. i don't have children but i am the caretaker for my grandmother.

Does anyone know how this works in Europe? I've been cashing out a couple of bitcoins now and then and til now no one has said a word about it. Should I tell the people responsible for taxes that I am cashing out bitcoins?

You only get to use long-term gains if they were long term (you owned the coins for more than a year - and can prove it), and it was in the year you cashed out. If you are cashing out in 2014, it's income for 2014.

You don't get to use previous years allowances if you never received the money. However, if you did cash out last year you should have reported them already (or filed an extension), or amend your return to include them.

Your accountant will be able do all this for you. You need to just let him deal with it.

Most countries treat gains made from Bitcoin as capital gains. The rules depend where you live. Likely and technically, you should be reporting gains. However, some places like the UK, for instance, have a personal allowance where the first £10k gains are ignored.

just talk to lawyers and accountants that specialize in reducing your taxes down to zip. 

i recommend Orrick (http://www.orrick.com/)

not gonna happen

you'll be losing out. it's common practice among the wealthy. some even renounce their citizenships to avoid paying taxes. that's what edwardo co-founder of facebook did after he received his share.  and there's nothing illegal about it.

http://www.forbes.com/sites/briansolomon/2012/05/11/eduardo-saverin-renounces-u-s-citizenship-ahead-of-mega-facebook-ipo/


hey it's your money and your life. good luck.

i really doubt anybody is going to be able to reduce my taxes to nothing. even if i pay the federal government nothing on capital gains i still have to pay on acquisition and 5% to my state.

that guy was not born in the US and he now lives in singapore. most people do not want to flee the country. i don't think you fully understand the depth of what you are suggesting.

who cares if you are born in a country or not. citizenship is citizenship.

go give the government all your money! the IRS needs it to piss it away. make sure you give them every penny you have. or they may just can you.

i don't want to flee the country.

you're not being helpful and you are acting like an asshole.

I think it's fucking dumb not to leverage legal means to reduce the amount of taxes you owe.    That doesn't mean you need to 'flee'.

you are being an asshole you also posted in my thread about KNC not refunding people saying we won't get our money back. who the fuck are you? go crawl back in the hole you came from. nobody gives a fuck what you think.

Usually the people that get scammed don't end up getting their money back.

I don't live in a hole. But it seems like you're about to.

piss off

LOVE U 2!  :-*

faggot

Still love you!  :-* :-*

Calling people faggots isn't nice.

being an asshole isn't nice and it's not exactly good PR for somebody who is trying to create a BTC marketplace. somebody as smart as you should know public relations is pretty important for a startup business.

Web Slicer, I suggest you stop attacking the people of whom you are asking advice and accept it or leave it. you are not helping your cause by being so grumpy and abusive.

are you kidding me? this guy is telling me to leave the country i'm being dumb and to give the government all my money to piss away. he is being a dick so i treat him like a dick.

hey i never called you names. i just disagreed with your actions. if i were you i would seek the best legal method to nullify my taxes or reduce them as much as possible.  orrick is the best lawfirm in the business to accomplish this. their lawyers aren't cheap ($600-900/hr) but they get the job done. i've worked with them in the past on a IP case. they also specialize working with tech companies.

i already had a startup business and sold it. and had to deal with the same tax issues.  now i live retirement.

edit: i never told you to leave the country. i just told you what one wealthy billionaire did to avoid paying huge taxes to a single government.  there are legal methods to reduce your taxes, sometimes down to zero.

and yes, our government (i'm a US citizen) pisses away a lot of my tax money on things I do not support, like bailing out the horrendous US auto industry. i like to believe the fittest deserve to live, the weak deserve to die. clearly the incompetence of the US auto industry caused it to self destruct and I find it criminal they can get a bailout from our government -- using OUR tax dollars.

look, i know what you're saying. but you post here as if i haven't been doing my homework and you know better than the 3 CPA's i've talked to. you are right you didn't name call but you are being arrogant and then you top it off with don't take my advice go piss away your money. common dude, that's not very cool either. what kind of response do you expect? you don't have to name call to be a dick.

you may find my posts arrogant, and sure they kinda are, but your topic applies to everyone mining and investing in bitcoin. bitcoin and taxes. so maybe my posts will help another user. just saying.


and about knc scamming you and not sending you a refund, well, that happens all the time. most people scammed lose their money forever. i lost a lot in mtgox and i don't see it ever coming back.

i'm just saying, if you don't like his advice then ignore it. but you are publicly asking for advice.

he is right, that is an option, I was reading that people are denouncing citizenship in droves from the US government. there is those islands where you can buy land on the island to get full citizenship and get full access to all eu countries.
can't recall all the details right now but it is something people do and you don't have to leave the US physically to do it. and yes it is all legal and above board.

EDIT: here you go: http://passportsforbitcoin.com/

Edit2: and more http://en.wikipedia.org/wiki/Renunciation_of_citizenship

well, i'm glad you can admit you can be kinda arrogant. that makes me feel better. truth is, i can be an asshole too. but i don't talk to people like an asshole unless they have given me reason to. try not to be a dick to people who have not given you reason to. your go give the government all your money to piss away comment crossed the line a bit. it was not necessary at all.

and i know what you mean, shit happens people lose money and life goes on. but what really got under my skin was you being a smart ass in this post and then you start posting in my other thread to be a smart ass there too. it's like common dude don't follow me around and dig in my ass. nobody likes that.

good advice, but my problem wasn't his advice. it was his arrogant/smart ass comments that got me going. but whatever i am over it. i'm not trying to keep it going. peace love and all that good shit.

here's a kissy face for you too.   :-* :-* :-*

now that i am over your arrogance and looked at this i don't consider your advice smart but it is amusing. i honestly don't want to give the government shit. but i don't want to give up my citizenship or flee the country either.

what's even funnier than your advice is the wiki says even if you renounce your country the US charges a fee to do so and you have to liquidate all your assets and pay income tax on it before you leave - LOL

so realistically, if somebody is really considering this, renouncing your citizenship is pointless, it's best to just leave.

best of luck to you.  i suggest you talk to lawyers instead of accountants. accountants obey the law and organize. lawyers flex and bend it while introducing new ones.

i'm off to see the new transformers movie. i hear it's pretty good.

edit: rotten tomatoes tells me it sucks. never mind..

lawyers don't introduce new laws, but i know what you're saying. i have a criminal lawyer but he told me it's not his thing talk to a CPA. what kind of lawyer do you suggest i talk to?

Try this tax attorney. Free initial consultation. Couldn't harm.

http://www.bitcointaxsolutions.com/

LOL - thank you sir. i'm gonna call this guy tomorrow and will let you guys know what he has to say.

Be sure to let us know how you go. I for one am very interested in how this pans out.

for sure

Our previous investors at DFJ referred us to Orrick for all legal proceedings. For taxes,

http://www.orrick.com/Lawyers/Charles-C-Cardall/Pages/default.aspx

They are very high-tech and high-end.  Work with all major entities in the valley.

Imo taxation will kill BTC

not. would be contrary

i have been calling this guy for a week. i sent emails and left messages. no answer and no response.



this guy said he only works for non-profits and government agencies. i asked him if he can recommend a colleague who can help me. he said they don't really work for individuals they specialize in big corporations. he also said his hourly rate is $900 an hour and his colleagues rate will be the same. his advice was to talk to a CPA cause they can probably better help with an individuals taxes for under $500.