Bitcoin Forum

It is often argued how bitcoin cannot be taxed because it would be an insane task for the IRS to trace back every single transaction accurately to the people that own those bitcoins. It's just imply not possible, and in the future as Confidential Transactions, Schnorr Signatures, Mimblewimble etc get activated thanks to segwit (once we defeat the government-paid anti-segwit trolls) it will be pretty much a waste of time.

But implying that you are excempt of tax just because of that is in my book delusional. If you want to buy land with bitcoin, you cannot escape taxes, not even a car.

My question is, how would you go about it? I have a very modest amount of BTC so I wish I had those problems, but im just wondering, if you had enough BTC to buy a nice penthouse, how would you go about it? I don't see any other way out but to calculate how much the penthouse costs + taxes and cash out the BTC in some exchange (since localbitcoins is not going to have enough volume to do that, and even if you did it throught localbitcoins, it would need to be in real life in exchange of cash, and you't but real state with cash, maybe you can get away with a car, but not real state or land, and physical cash will not even exist in the future.

Anyway, my point is, you can't escape the government when it comes to important purchases.

What would you do if armed men arrived at your house, demanding money under threat of kidnapping you, or the threat of simply stealing the amount of money they would like?

When you want to purchase a home, you need to pay the welcome tax, the notary and all the feed that come with it. The best should simply convert the bitcoins you have into fiat and pay the tax associated with that income. Then pay a cash down into your house and borrow the rest with your bank.

If you are rich, you could buy it cash with your bitcoins ;)

put the deed in the name of a trust.
make sure you are not the beneficiary of the trust. but another trust is the beneficiary.
you then set yourself up as just an administrator of both trusts and take a fee for services rendered from the trust.

oh and make sure the bank accounts are set up under a foundation too. that way the fiat can flow without it evaporating. and because the funds dont legally belong to you no one will knock at your door

its how the fat cats get away with not paying tax.

I don't get it. What does that question have to do with OP's question? You are saying that police are like thieves? That is very nice but it's not going to work. If government finds out that you didn't report your house/land, as McGregor would say... "you are going to do nothing".



That method must have some risks otherwise everyone would be doing it. Why only "fat cats"? Is it expensive to set one of those foundations or whatever? Unfortnately im far from a fat cat... im a skinny cat looking for some food.

I dont think so that you could able to evade tax when you tend to buy a land/real state with bitcoin because you will definitely be charged for sure if you tend to buy one.Why would bother to use of bitcoin on purchasing those things?Its jsut simple convert your bitcoin to local fiat currency then buy and you should accept the fees and other related payments.

if it were just $50 then yea everyone would be doing it.

its not something you do just to protect your second hand car, LCD tv and apple ipad.. but if you have a new car or a house its more worth it.

see.. this UK Duke got away with £0 tax on £9billion inheritance
https://www.theguardian.com/money/2016/aug/11/inheritance-tax-why-the-new-duke-of-westminster-will-not-pay-billions

Government has the monopoly on force... there's nothing you can do if they come and demand explainations as to where the money that you used to buy the real state came from. What would you do?




Like I said before im not rich, and even if I was rich, it would be impossible to get not even $100k in cash, nobody in Localbitcoins is going to meet for such a big amount, it's just crazy, and a penthouse is usually half a million, it's just not going to happen. There's no way out other than converting your bitcoins to fiat and paying taxes.



To be honest I have no idea how any of that works. How are you going to open a foundation out of nowhere? and you mean a trust fund? I wish I could understand all that economy jargon... honestly I would be scared to do that, im sure they can end up finding out you are fucking with them.

I would do the smartest thing I could think of.

Real estate transactions always go through escrows, and seller wants fiat not bitcoin. So if escrow or seller agent wants the deal, he can simply open a coinbase account, transfer money to USD, then send to escrow. This is the same as people use bitcoin to buy cars, the seller gets USD, bitcoin is just an intermediate step.

Reason why bitcoin can not be controlled by governments is because of it being digital in nature and not relying on anything physical except miners.
You really can't buy anything with bitcoin without paying taxes, actually you'll have to pay tax no matter what currency or method you are using and anything you do to avoid paying tax is considered illegal.
So please stop thinking of bitcoin as a magical instrument :).    

Once they see its worth finding out what you've been up to the government may closely watch you later. I'm no expert but i think foundations do still have to keep a book keeper and they may have to check those balances until they find out.

why can't we just be law abiding citizen and give the government what belongs to the government.

Ok we are asking this for legal reason and what comes in my mind is if I purchase a small land for example 30 BTC or a small apartment, I don't have to declare it how I bought or should I? I know banks like to show them the transaction or something similar but I isn't reasonable?

Hi, here is for You:
32,0 m2
2500,00 € + 20% VAT
Kohtla Jarve (Estonia)
http://www.prima.ee/ru/realty/type/apartment/4105/

39,4 m2
4000,00 € + 20% VAT
google.com/maps/ (https://www.google.com/maps/place/Puru,+41551+Ida-Virumaa,+Estonia/@59.2846827,27.387996,12.29z/data=!4m5!3m4!1s0x469465ae450ee7ff:0x4f3804dcb21af218!8m2!3d59.318991!4d27.408363)
http://www.prima.ee/ru/realty/type/apartment/4184/

I don't think it's a good idea because the whole idea with BTC is so that you can't be tracked but when it comes to real estate deals there are legal processes which can't be neglected and you have to actually be there on the deal itself,It's risky if you do it over the Internet because there's a high probability there will be some things which will be not understood between the buyer and the seller which isn't good.

I think the issue if Bitcoin not taxed is being over exaggerated and needs proper explanation to get it that Bitcoin is totally immune from taxes. The only scenerio we will have that as OP has painted is if the seller of the penthouse is ready to accept Bitcoin and nothing else. Also, there is need to also say that a particular income can be exposed to several type of tax and it can be only one using Bitcoin one can be able to avoid.

I don't think is too much risky as long as the cash is delivered and the stuff is transferred to the buyer, but I prefer to deal in person, but even though the payment can be made in cryptocurrencies and the legal institutions can't see/find where the deal was made and I don't think we have to declare how we bought the parcel/apartment.

wow really cheaper compared with the rest of european union. where is the "trick"? a lot of expense for renew electric plants or whatever?
I guess is really hard to rent or find people for short staying or I am wrong?

Nothing belongs to government but they take it as their own like it's their blood right, governments around the world occupy lands and take control over natural resources in order to build armies and arm their military with advanced technology and participate in pissing contest against each other, you know how much money being spent on defensive and offensive military operations and weapons? billions and billions of dollars each year but for what reason other than their own hidden agendas and benefits and not nations?
What we need is for companies and their owners to man up and start accepting bitcoin as currency in their businesses to lose free from the prison of fiat.

ways to avoid tax whether its fiat or any other currency
1. never "live" in the same country for more than a few months of the year - you will learn why people have holiday homes, winter cabins and timeshares know this trick, david beckham (UK football/soccer) done this for years.

2. financial trusts - if you dont have yourself as a beneficiary and instead you set up a couple shell companies as trustee's and then you take a fee as an administrator and travel/accommodation expenses as a trustee.. then whats inside the trust technically doesnt belong to you, but you can as both the administrator and trustee, grant payment to yourself.

3. foundations - ever watch them posh people who arrange large banquets in the name of a foundation, or why the linux, hyperledger, etc all used foundation status.. (clinton foundation.. but shhh dont mention the clinton foundation)

4. offshore business.. this is a commercial method that mixed points 1 and 2, but done so using commercial entities rather than personal entities

5. not have funds available to be frozen by probate. by giving 'gifts' to relatives before you die thus having nothing in your 'estate' to be taxed

its their own choice to start investment on a better scope commodity or product but buying lands and real estates is actully out of the mark because nobody would accept such great amount in bitcoin and secondly everyone want to make valid paperwork for this type of property

You could avoid buying a house in the first place and just rent a nice place, but if you really want to buy a house then you will only need the owner to accept payment directly in bitcoin, you could prove you have the amount to buy the house signing a message with an address with the right amount and then give your private key of that wallet, it is risky but that could be a way.

Governments can and WILL tax all non moving assets such as land and real state. They will always be able to do so as long as the government is in power. People here implying they could be able to stop it are delusional, you can't avoid it.

Sure, some guy that has ties in royal families and is worth 9 billion is basically a god, those guys make and get rid of laws, but rest of us, the 99.99%, cannot avoid taxes on land and real state, it's just not realistic.

I think there is no chance to escape from tax if bought that expensive and valuable asset, the government will question you, it is impossible to evade tax if you bought a house, it is better to pay income tax rather than there will be a big problem in the future

Agree ! If you bought land/house or any that has a bigger value then you will know that the government will tax it and make you pay from it well all of the things has tax so how much more if that big amount and value. And also it is very impossible to evade twx we all know that so in the end you'll paying it .

Wow the 4000 euro one looks really nice. It includes all the furniture? Looks small but a really comfortable place to live. Then again, as the other poster pointed out... where is the trick? There must be one. Really convective neighborhood? Is that place in the middle of nowhere? really low building? Low possibilities to rent it? (people don't want to live there for some reason?)

I don't know anything about Estonia so im not going to risk buying real state in a country I know nothing about. It might be a very unstable country for all I know. Are they at the verge of some war? shaky geopolitical situation?... so many variables to consider.

There is no trick.
https://www.youtube.com/watch?v=SRcfwP-UmHM

Just check other prices around.
The most problem there is a low pay for the Job, the local language is not easy to learn, one need to talk Russian too.
But who have the online job, this place is OK enough.

This is not a ghetto, all people are "Europeans".

31 м²
1 850 €  + 20% VAT
Kohtla-Järve, Ida-Virumaa
http://www.okidoki.ee/ru/item/5870444/

1 600 €
http://www.okidoki.ee/ru/item/5660281/

39 м²
2 500 €  + 20% VAT
Kohtla-Järve, Ida-Virumaa
http://www.okidoki.ee/ru/item/5864541/


3 000 € + 20% VAT
Kohtla-Järve, Ida-Virumaa
http://www.okidoki.ee/ru/item/5274245/

68 м²
9 500 € + 20% VAT
http://www.okidoki.ee/ru/item/5854347/

Ladies and Gentlemen, there is a lack of imagination on display when it comes to this issue



Each and every one of you has described what the problems with avoiding property taxes are under the present circumstances.


But each and every one of you were drawn into the world or Bitcoin precisely because it changed the status quo. What makes you think that we couldn't change other circumstances too?

I put it to you all that we could, given diligent innovation and some patience. I have no problems paying into a scheme for the common good. I do have a problem with being forced to do so under threat of violence. Only a tiny percentage of a population, 5-10%, all acting together, is needed to change any status quo, history abounds with examples.



We could do it, after all, we're proving already that enough people acting together can make things change.

Wow, I'm disappointed. What happened to the Bitcoin spirit?

But no matter, I think the will to change the world is still out there. That's what optimism is all about: the defeatists in this thread cannot defeat it

As OP mentioned, on important purchases similar to land or property during documentation problem arises. Right now finding users who prefer bitcoin for buying and selling the property or lands. Even in such situation transaction between buyer and seller can be made in terms of bitcoin and a small amount can be exchanged as fiat. This helps in the reduction of the taxes. One or the other way it benefits us.

You can already but houses and cars and many other thinbvs with bitcoin. Noone asks where they coming from it has nothing to do with them and is none of their business. When you go buy a car or video game or even groceries does someone demand where tour money comes from ? No !! Same with bitcoin! If you stupid enough to cash out your bitcoin to fiat or do anything else where you forced to pay tax then you a bad businessman and probably wouldn't have thst much bitcoin to begin with. There so many ways to legally go around paying taxes.

actually most of the states still not accept bitcoin officially therefor it is not so easy to buy a house using bitcoin, you must change your bitcoin into fiat currency and after that you can buy a house, because you have to pay tax and government is not collecting tax in bitcoin.

and bitcoin is a tax free currency because there is still no tax on bitcoin because we have pay tax on recognized  items and bitcoin is still not a legal currency therefore there is no tax on bitcoin and therefore it is difficult to buy house or real state on using bitcoin directly.

again guys. although you can escape some taxes by using bitcoin. things like houses and cars that need to be registered cant be avoided simply by using bitcoin.

however by not having the house/car registered in your name. they cannot come after you.
this is why the rich use financial trusts and foundations.
the clintons have never paid tax in their lives for the funds held in the clinton foundation. even with the foundation literally called the clinton foundation they are legally not the owners of the assets of the foundation. they are just administrators taking a management fee..

You should stay low, go fast, kill first and die last

Why would you want to buy a penthouse with your bitcoins in the first place? Well, that may be your child dream and things like that, but really, if you have thousands, many thousands of bitcoins, you should remain sane and start small. I mean you shouldn't go right after the penthouse, you should first test waters with something small and not as expensive. The point is that once you get the hang of the smaller things (in this case cashing out without attracting too much attention from preying eyes), you can jump to the next level. Otherwise, you'll be quickly caught and stripped off of all your wealth ("from zero to hero and back again")

I confirm there's no trick. Actually, I don't find that dirt cheap.
This is a very cold place, and close to Russia. Very few people want to live there.

Estonia is a stable country with nice people (and beautiful women), but the only city a foreigner may consider is Tallinn.

Actually, using a trust or a foundation doesn't change much things when it comes to tax. Property tax, road tax and registration tax must be paid no matter the owner is an individual or a company. In Europe, it is sometimes worse with a company. If you have a second home, only living there a few weeks per year, that's all right as an individual, but there might extra tax if the owner's a business.

Its most likely possible but I do not know anyone that is doing this right now, it would be nice to do this!

Would be very good to let this happen and it is already done in some cases but it should be done more because the bitcoin is more upcoming and rising on worth too.

if Bitcoin is an anonymous any taxes on anyone? who appear on that money? sell small pieces and remove on silent, that's the case, it seems to me

in my country the tax must be paying for seller not buyer, in future seller must report his activa, his money, his home to selling someone, maybe buyer can hide from future Tax but seller still must pay tax if you want to include his home at activa.