Bitcoin Forum

http://www.zerohedge.com/news/2017-07-10/one-trader-made-200m-trading-ethereumand-nobody-knows-who-tax

The taxmen are getting nervous with people holding these massive amounts and not being able to tax it.

Well, he didn't sold afaik so it's obvious now he holds less after the crash but he has a fuckton.

Some guy makes a point:


If you can't prove your entry points and you cash out.. aren't you fucked? They would keep the money and claim it's not clear where you got it from.

Fake news from ETH fake news network.

That's why anonymous coins suck, you won't ever be able to use them for anything other than petty purchases without triggering large fines.  

If you held 200 million, wouldn't you just gladly pay off the relatively low capital gains tax just to make the entire thing legit? You'd be settled for life.

You should be able to prove your entry points although I suppose with Eth it gets harder. I would recommend talking to an accountant ha Also, remember to keep good records because it's easier to keep up with record-keeping practices than it is to make up for a lack of records in your work. Cheers!

Any coin with a blockchain explorer will be easy to show your entry point. You don't even have to prove the actual transaction. Just note that wallet address(es) as yours and you're good. 

In my country the tax agency uses January 1st as the price date. If I hold 20 bitcoin then I only have to say I own $998 x 20 =$19.960 worth of Bitcoin for 2017. 

If Bitcoin suddenly becomes worth ten times as much on January 1st of 2018 then you note you still own those 20 bitcoins, now worth $9.980 =$190.960 and you pay the tax on it. My country's capital gains tax is absurdly low so I pay 1.3% ($248), but even if it were 15% or 20% I'd swallow and pay it, it means all the rest is gravy to do whatever you want with it. 

Yeah sure, but if you trade alts things get very complicated very quickly with proving what has been going on.

If you're a high frequency trader then income tax rather than capital gains will apply. 

Hmmm can't come up with an entry point? Here let me help ya. I mined them back in 2015, or i bought a laptop at a flea market, or the contents of a storage locker that had a usb stick. Circumvent the problem 200 mill ?Become ex-pat denounce your citizenship move to singapore be happy.

Its stupid if you go out there claiming that you have 200 million dollars in ETH, the whole point of cryptocurrencies is making everything from storage to transactions completely anonymous. Of course the taxmen will be on his tail all the time now since he gave his identity away and he'll be in lots of trouble in the days to come.

Slave mentality

Yeah, a rich slave though. Not one that has to hand over every single penny and then some more for tax fraud. 

I seen a guy on CNN before who owned an investment house in the stock market and he said he made 2+ billion almost over night and he did it with ease laughing hard on TV..

Housing derivatives.. They knew a bail out was coming so....

Anyone supporting what happened here last few months such as MARK CUBAN
..are scammy losers.

Don't trust everything you read online

I don't know how I would handle that situation if ever I got that money, well I know if we will still continue to hold
and accumulate we will surely have that value soon. Speaking of taxes, I think that depends on to your country's regulation so we should
know what are those so as not to violate and penalize.

The bottom line is if we will not declare all in exchanges they will not notice it, what I'm trying to say is we can withdraw it slowly or whatever we will do just to launder the money we have.

Here you go:
https://etherscan.io/address/0x00a651d43b6e209f5ada45a35f92efc0de3a5184

not necessarily a fake news. that is what happens in a pump and dump system, people get rich over night and very simple. you just have to learn to see the reality not the hyped up bullshit that the shills of each altcoin spread over the internet.
and many investors made a lot of money out of the past 3 months altcoin pump. this is just one news...

for example in case of ETH, you should have bought it back when the shills weren't being paid to advertise and nobody were talking about it. by that time price was lower than 0.07-0.01BTC. then you should have dumped it on top when all the shills were getting paid to make topics all over the internet every day and not wait for it to drop. this coin had over 1000% rise pump.

I think there is no taxes until you sell for money or buy something with ETH.

I don't think the tax people would worry about, because if you cash out too much or buy expensive things avoid taxes would be impossible.

The writer of the article is stupid, not everyone is living in the U.S., I heard somewhere the trader is most likely from Malaysia, Indonesia or Singapore, something like that. These countries don't give a fck of taxing crypto.
But then probably Eth insider moving Eth around to one account. These crook Eth insiders are mental crazy from start to pump this vaporware to the price it have today's

Sure if you lived in a developing country you could easily evade any taxes. Either because their tax agency isn't equipped to detect your wealth or because you could simply bribe the taxman at a very low cost. 


Most countries have a small amount (up to $2.5k-5k) which doesn't have to be declared. Anything above will have to be declared (and that will be noticed by the banks).  

If you become a multi-millionaire people usually want to start solidifying their wealth rather than continue speculating. A diverse set of shares, real estate etc. You won't be able to get any of that with undeclared money.  

You can launder the money, sure, create some business font and declare it all as income. But in most countries that only makes you end up paying more tax than when you would've simply declared your coins.  

Laundering is for when you get money illegally. Black labour, theft, scams, drugs, weapons, anything on the black market. People that make money this way accept the higher tax cost because it means their money would at least appear legit and usable.  

But cryptocurrency isn't illegal. Your trades are completely fine. Laundering money and paying a higher income tax because you wanted to avoid capital gains tax is silly.

If no one knows who he is, why are people assuming he is from USA?

Yes exactly, you can also buy busineses and property with cryptocurrency but I don't know whether it leads to taxes.

Let's wait when ETH price would make him a billionaire  :P

In a few years, the tax agencies have to realize to reform. Technology seems to progress without them and they are stuck in policy that does not work. They will have to innovate to keep up.
You should just admit your taxes for now. Technology will always outpace any governmental agency.
Just diversify and You will be fine in the eyes of any tax agency.

Or if the guy is even real..

Well, his start capital was 55,000,000 USD already :D not very exciting (and yes, he lost -65% already)

There are many fake news floating around the web like this one but it's still true, anyone will be screwed if you can't pin point the entry. There are some countries which started taxation on Bitcoins but it's still unclear to many.

Hello.
 
I did not get that!
Are they taxing your bitcoins i mean those that you just keep without converting to FIAT
or they are taxing your income (capital gains) only when you convert to FITA i mean the cash that you
receive on your bank account?!

It would be also useful to know which country is that where the tax on  capital gains is so low! ;)

Lets hack this adress and share the coins between us.
We will leave him 10.000 coins, that's enough for him.

In most countries Bitcoin is just considered part of your capital. Alongside stock, gold, real estate and what not. Bitcoins aren't taxed separately. In your yearly tax returns there's often an option to check a box that you own this kind of capital. That's enough, unless your capital is worth more than a minimum amount (25k in my country) then you need to specify what your capital consists of.  

You pay capital gains tax over the total sum of your capital. This tax is often a lot lower compared to income tax. If in 2016 your Ethereum was worth a few thousand dollars and in 2017 it's worth a few million dollars, then you pay the capital gains tax over those million dollars and the rest is all for you.    

However, if you didn't own any Ethereum in 2016 and you suddenly own millions worth of it in 2017, then you're going to have to explain where you got them from. If it was purely because of succesful speculation, then it's capital gain, if you got the Ethereum through some other means (like through work) then it's income tax.  

Selling your bitcoin to fiat varies greatly by country. The EU recently ruled that EU countries are not allowed to charge VAT on purchases and sales of cryptocurrencies. So after you paid capital gains of your millions of ETH, the rest is all for you, no more taxation from selling it to fiat.  

Oh and  the country is The Netherlands, 1.3% capital gains is very low and also the reason the Dutch are a major tax haven. There are also countries that don't have capital gains tax at all (Hong Kong, Malaysia, New Zealand) but they're also less secure and less accessible.  

Even 5% or 15% capital gains is quite low compared to any income tax or fines (you may even lose all of it) if it isn't filed properly. I'd much rather pay that than spend a lifetime  hiding my wealth and not being able to use it for stuff like buying actual property. 

So what happens if you trade on Cryptsy, Mintpal, or any other altcoin exchange that is now dead? How do you prove entry records on these altcoins in and out if the exchanges are dead?

Even if you were lucky to save your trades, what does it prove? The addresses could be anything. If there's no way to log in into the account and see that the addresses belong to the exchanges, how do you prove this to the IRS or whatever?


Why would you report you have any bitcoin? just wait until you cash out and pay the capital gains tax?

A good story indeed.
But is it real?
If it is, he is f*cked. If not, then there is no hurting making a good story for reading.  ;D
Taxes. Whew that is a problem every consumer is stressed about. Why do they have to tax something you own.
With crypto currency I am sure he is trying to avoid that.
To hell with tax which just go to the pockets of the greedy government crocodiles.
And for that large amount I am sure they will do their best to make him pay.  :-X

How would you explain where you got the cash from? If you report it each year then you can prove that it is in fact capital gains.

It is true that to whom he needs to pay but what in the hell he needs to pay somebody though, is it trading crypto currency with an anonymous identity helps you to dodge this tax authorities?

unless he reveals himself/herself in a live T.V show that he deposited $50 million then profited $200, there is no concrete law as of today with this kind of taxing situations I think.

Your bank is filing all your bank accounts to the IRS though. They know exactly how much you own. So in order to dodge the tax you'd have to somehow find a way to cash out in either an anonymous account or into cash. Both of which may be more expensive than simply paying the tax.

Only x4 of his capital. I have known that there are many people who can earn a greater amount of bitcoin than this guy. Remember NEM? If he had invested his money in NEM, he would have earned billions of dollars right now

Yeah but how are you supposed to report trades that are lost within dead exchanges? a lot of people has this problem, and I never saw a clear answer. Everyone that traded on Mintpal for instance, and lost all their trading history... how do you prove the entry points of these altcoin trades?

Whole thing is a mess.

You convert FIAT you pay taxes. Holding crypto is not very a thing, you never have your coin on your wallet, you just have the private key wich allows to contral that coins. You lose your wallet/private keys the coins are not deleted, they become out of control.

See my comments here on AML law.
Then see the status of the lawsuit Coinbase vs the IRS (THEY REQUESTED LOTS OF RECORDS)
If they make you get verified you are watched by the govt's etc.

i told you all here in 2013 regulations were coming.. not long after USA & CAN announced tax laws for crypto coins and later an SEC fraud alert about them too.
Many since joined in.. the basic idea is if you don't claim your Exchange profits you are in violation of tax law and could face severe consequences.
Heard of Al Capone ?
He was considered untouchable.. the IRS took care of that.

I'd rather pick a fight with a Hells Angel in a bar before fucking with the tax man..
And yeah i have too LOL
When the tax man says jump you say how high.

Relatively low cgt.  Its like 50 percent on that sum.

I think in a few years to come, the possibility of many bodies part of the tax will be aware of the large number of changes in technology that appears to be the more advanced so that they will create a policy that applies but may be stuck in the policy would not work because they have to keep the innovation so that we should be aware of and recognize the tax effect. Since the number of some 200 million people have of ETH

The government response is to make the laws broader rather than less specific. Stock trading and currency speculation are often classified as 'gambling' (because that's essentially what it is) and the volatility, IE, the amount of gains one can get is irrelevant for that tax code, you pay the same tax over it. 

The only thing that does complicate things is the activities that can be done with cryptocurrencies. Intensively mining coins is considered 'income' rather than 'capital' but how does that work when people start selling their ETH gas, or start getting large dividends from proof of stake coins? I'd consider those examples dividends from capital, therefore capital.   

Theoretically, the government can make laws requiring you to pay taxes on the income of crypto currencies, but it will be very difficult to do. They can't force you to change coins, but in order to accept payments in the crypto currency need to admit it and lose control over the economy. This government is not ready.

One guy made 200 million from ETH.
The other 96% just lost money..

You always hear one story.

What's stopping someone like that from just applying for citizenship in a tax haven?
If you have that kind of money, it shouldn't be that hard to try and find some sort of loophole together with a team of accountants.

Some countries also have some form of fiscal amnesty, you basically pay a large fine and are able to 'legalize' your money.

Depends on the country. Some let you go, some still demand taxs. Check with your country's tax code.


Yes. Spain. The fine for tax fraud is trivial from the profit you gain from that fraud.

1.3% capital gains tax!! What! I pay 40% FFS! I'm moving to your country to cash out. Where do you live?

There aren't really any rules regarding taxation on crypto assets in many countries.If you liquidate the amount,you can raise red flags with the bank but ofcourse if you have ways to show the income is legit,they'll allow it.

That is 70/30 ratio.70% amount is seized by the government and 30% is for you to keep,atleast in my country if found illegal not-taxed income.

Go to Dubai,tax-free.

haha,, this is actually what i came back to this topic to add to my previous comment here. glad i read other comments to see i am not the only person thinking this :)
people always forget that there are always two sides in a trade, one side is buying it over priced and once side is selling it overprice to the other sucker.

If you dont have money its a problem and yet now you have lots of money its still a problem and having that kind of enourmous amounts will really give you sleepless nights on how you would cash out knowing that Anyone could able to check it out your own wallet history and if theres a single transaction specially on cashouting it will really made some actions for you to be taxed.

I never bought any bitcoins, so I never needed to register on these exchanges that require you to give them your data. I have only used altcoin exchanges, some of them which are dead. I have no idea about tax laws, I just got on this thing because It was interesting, started making some BTC and holded them, i've never sold anything.

I never intended to break any laws, and I will not. Whenever I cash out I will pay all taxes, that is not the problem.

The problem is the intrinsic mess that is getting track of all bitcoin transactions and report everything, it's insanity. They should make it easy for holders and not scare them into potential counterfeits (as in when you cash out, your bank account gets frozen), otherwise no one is going to report shit on these countries, so it's on their interest to make it easy. It should be capital gains period.

Is it possible that the authorities could harass you because you are not able to give a detailed information on what all investments you made and how you made those amount of money,since i am not a specialist when it comes to these things i am not sure about it.

There are few incoming transactions of '199,999.99898534 Ether'. Is it possible that this can be an exchange address?