Bitcoin Forum

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

That is always going to depend on the exact country where you live. Sometimes sometimes it won't be taxed other times it will. You're going to have to consult a local tax advisor for a definitive answer.

Part of the question would also be is it worth worrying about? Without knowing what they got into Bitcoin at does it really matter. If you're sitting on a few hundred coins that you paid a dollar a piece for them back in 2010 does it really matter what you sell it for at the next ATH? It's going to be such a ridiculous amount of profit it doesn't matter.

The other things to keep in mind is even perfectly valid 100% correct tax advice today may or may not be correct a year from now as rules regulations and laws change.

-Dave

I would then ask him why he invested in Bitcoin at all if even today he cannot understand exactly what Bitcoin represents. There are thousands of online stores that accept Bitcoin as a means of payment, and there are also cities/countries where you can pay with Bitcoin.


Unless the tax is insanely high, I don't see what the problem is that he pays income tax in any amount from 10% to 20% and then carelessly enjoys the profit he made. It seems to me that his fear stems from the fact that there is no evidence of how he came into possession of those Bitcoins, and in that case the fear of taxes is fully justified because it is no longer just taxes, but also some other things.


It depends on how his country treats payment with Bitcoin, and for example in the US every payment with Bitcoin was a tax event (if something has not changed in the meantime), while most EU countries have their own rules. In theory, every BTC -> Fiat conversion, whether it's about trading or paying for goods/services, would mean that there is a need to pay taxes - although on the other hand, I pay value add tax every time I pay something with BTC and it wouldn't be logically that I also have to pay some additional tax just because I paid with Bitcoin.

In countries that taxed cryptocurrencies, you pay tax when you when you convert the crypto to fiat or when you are using the cryptocurrencies (like bitcoin) to trade.

If you just hold your coins, you will not likely be taxed.

But to know how exactly crypto tax is in your country is, you will need to read about it or consult the tax advisors.

Nope, then you will just pay service tax like you do with your fiat. You can literally pay for anything using Crypto Cards. Binance has one and many other exchanges too.
You can spend directly from it without even converting your Bits to fiat. Isn't that awesome? Back onto the topic, you will just pay what tax you pay with fiat.

For example if you buy a burger from Burger King, you pay the price + tax. That's it.

If the time comes when exchanging BTC for fiat is no longer necessary, it would mean we are in the times where it has been adopted as a legal tender in that country or it is being regulated by the SEC regulators of that country.  That also means businesses and services can openly accept and use BTC as payment option for goods and services delivery.

Well your friend is even lucky to have taken advantage of this digital age by HODLing BTC in a secure wallet, while many of us still dread to do so. He is also lucky that he is trendy, and am sure it wouldn't take him long to come up with a better way to reinvest the BTC, instead of letting his funds become taxed, just like that.

Depends on the law of the country.

If they've got specific ruling about Bitcoin exchanging it into fiat or just simply using Bitcoin to Bitcoin transaction going to the merchants, there can still be taxation on it.

I feel the senior but we can't do anything against with that because that's the permanent thing on this world. Whether we like it or not, in everywhere, there's tax.

We will still pay tax but then it may be directly or indirectly, because government needed task payment to add up to what they offer back to the community, the tax money we are paying is not for the government but rather for us individually and collectively, bitcoin cannot be taxed because it's a decentralized network but in case the whole world adopted bitcoin as legal tender and it's the only acceptable means of making payments, task would have been included from the rate of what we are being charged for and not on the transaction we are making.

For starters, that's not going to happen, that we don't exchange bitcoin for fiat. That was imagined at some point years ago but I see it as a long shot. First, because bitcoin is valuable and will become more and more valuable and scarce, so people will tend to want to save it instead of spending it. And second because there are going to be a lot of alternatives to CBDCs and shitcoins and payment systems for day-to-day payments. Add to this that bitcoin as a hypothetical global payment system would have the problem of scalability, which is not clear that it can be solved.

In short, the scenario you suggest is not going to happen, at least at the global level. If there are places such as El Salvador where it is declared legal to tender, then you will not have to pay taxes for it, but where it is not declared as such, you will have to pay taxes as it happens now and Lucius has explained well.

Government is always looking for taxes. If there's no taxes, it's difficult to develop the country. So if ever the Bitcoin will be legally accepted to buy any other things, I think government already found an idea to get the taxes when it happened. If ever they couldn't find a way to put a taxes on Bitcoin, exchanging to fiat is a must. However, we always paying taxes everyday, we just didn't notice it. Just like when we are going for groceries, we pay taxes. So there's no one of us didn't pay a tax, some people who have authorities just wants to collect a big taxes.

If you invest to get profit that will be used to make your life better, more prosperous, with more comfortable equipment, accessory for your life, you must take profit. Because if you don't take profit, don't cash out, you will not have anything to make your life better physically.

If you have good annual income, you will be taxed and I think it is fair if you have to pay tax after taking big profit with your bitcoin. Taxing on high income people is not new and we all understand that we will have to pay tax.

If you buy bitcoin, hold it for your children, many years later, you will not have to worry about tax and your children who inherits bitcoin from you, will pay tax in future if they sell those coins and get profit.

Anything that could harmful or valuable will be taxed because the government do that to control their citizen to use something and they can earn a lot money from the rich.

There are some government taxing Bitcoin as an income tax, some government charge flat tax to Bitcoin, maybe in the future they will tax Bitcoin even though you're not convert it to fiat. As long as you're live in where the government tax Bitcoin as an income tax, it will not be high.

Well, yes, taxation will still be included either instantly while paying for the service you receive or could be compounded for every service (buy or sell) in a month, and the tax collection service  of the country will require you to pay all your compounded loans for the month. So, it depends on the country and how their tax is collected. but it sure will still be paid, just like you pay tax while spending fiat.

I am also on the same page. I think it will depend on the country and in my country already they have impulse of levying as much taxes as they could. If we move from Bitcoin to Bitcoin then also we will be restricted by the p2p platform limitations. Even local bitcoins were not spared when countries changed the rules and regulations. They also had to follow the KYC process. Thus if KYC is there then there comes the tracking of transactions.

So even if there comes any other way to transact in p2p way then either it needs to be without escrow. That means you either transact with highly trusted person or have a decentralised platform. I highly doubt any of that is really possible in the current situation.

At the end of the day, it would be dependent on the country and the laws that define it. My hypothesis is that as Bitcoin and crypto becomes more mainstream and drastic changes such as profit off of bitcoin sales not converted to fiat becomes a thing, most governments will find a way to counter this. Taxing crypto didn't seem. Possible but they found a way. I reckon they would find a way to counter it regardless especially since regulation is slowly becoming a thing.

I think in a country where bitcoin is strongly regulated, government wouldn't want to mix out on those tax gains from bitcoin profit of users.

If the money comes into his bank account, he must pay taxes. But he doesn't have to pay taxes if he uses a decentralized exchange and keeps his money in a stable coin for a while. But I don't know if the government can still track down someone who has made a crypto transaction.

This also crossed my mind when I wanted to sell my bitcoins in the next bull run, which would definitely be a big profit for me. I thought what would happen if I transferred the money to my bank account. The bank may get suspicious and ask me where the money came from, and they could send a report to the government so that the government can examine it in more detail. But never mind, I do not want to think that complicated. What will happen, will happen.

I suppose that in a country where a tax is imposed on the profits made from the sale of bitcoin, and to reduce the impact of taxes, your friend must be careful to choose the date of purchase, because buying the price of bitcoin is within $ 15,000 and selling at $ 100,000 is a good profit after tax deduction.

He can reduce his tax by exchanging bitcoin into any stablecoin and then buying bitcoin with that stablecoin, but this kind of thinking is risky because sometimes altcoin are unstable and may cause him a loss instead of a little gain + tax rebate.

It is not a tax advice, and my words may be wrong, because I do not know your country, and I do not advise you not to pay taxes, but to comply with their payment.

Short answer :NO.

You are paying taxes for everything at the time of purchase itself so even if we say we are moved to a completely Bitcoin-based monetary payment system and your country accepted it and you will be paying in a grocery store for the products along with the taxes which may be subjected to varies from government policies.

The only exception is Income tax like capital gains which you need to report to the government by yourself and if get caught for not paying the tax for the amount you are earning then you will end up behind bars along with hefty fine.

Bitcoin is not meant to avoid paying taxes which is illegal at any cost, it is here to eliminate the banks making money out of nowhere and there is no limit to how much money they will make in the future...

So you are asking will you be taxes if you spend your bitcoin directly? Likely yes. Spending and selling is usually treated the same. For example, in the US it doesn't matter if you sell or spend, any transaction made with Bitcoin triggers a tax event. There could in the future be a law that doesn't include small payments in Bitcoin as taxable, thus allowing Bitcoin to be used as a currency for spending without tax accounting nightmares. But for now I don't know that that is the case anywhere. So yes you would still pay taxes whether you exchange bitcoin for fiat, for altcoins, or directly spend Bitcoin.

Short answer: YES

The only way he could escape paying taxes is if he sells his coin through P2P. Using exchanges to convert his coin might expose him to both direct and indirect taxes. But if the law of his country stipulated that citizens are mandated tax from their crypto investment, he should abide by it.Trying to bypass taxes is tax invasion and it is a criminal offense.

This is one of the reasons why most governments want to centralize bitcoin transactions. Monitoring and collecting tax might be difficult in decentralized payment systems. But when we get to that bridge, there will always be a way to cross.

During Bull Run, bitcoin and cryptocurrency will be everywhere due to the trend of bitcoin's price going up; therefore, he can use his bitcoin to buy some goods since there are stores and some shops accepting bitcoin as a means of exchange.

If he bought his bitcoin a long time ago, I don't think he should bother with the amount of taxes he should pay because by then he would have made a huge profit, and as others have said, it also depends on the country you live in.

It depends because some people doesn't need to pay taxes when they sell BTC to fiat kr should I say it depends in the country that a person is in where some must pay taxes when they sell BTC to fiat and some doesn't pay or isn't required to pay taxes when selling BTC to fiat and vice versa. My answer about the question "Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?" Is also NO unless you received a payment that needs to be reported to the government.

Coins that are lying idle in a wallet wouldn't be taxed because it is just there without any use. The tax that one would pay for converting bitcoin to fiat and vice versa is very small and shouldn't be a problem to whoever is using the exchange.

If you say that because of little tax for using an exchange,for that reason you won't convert your bitcoin to fiat,it is better that you hold it forever because it will be impossible for you to use an exchange in a country that is collecting tax from the exchange without you paying your tax to them.

It all depends on how these taxes are being levied.
Worst case scenario has always been, having to pay taxes on already taxed commodities which always seems unfair but, realizing that you’ve not and your hodlings still counts for untaxed income, you would always get to pay tax on them if declared or found out.

Tax evasion is a crime none the less so, it’s important that you watch out and of course, it’s nations specific. It doesn’t matter if bitcoin is now common and widely accepted by a wide range of merchants. It’s income, it’s taxable and that’s what counts. Having it lying around in a wallet just hides it from the eyes of those who might sort it out that’s all.

I'd argue wit you about that because if you don't spend but hold. it's not taxable. Even in countries where a profit is taxable even if you don't convert to fiat, there's no way to prove that you're holding.
You have to be smart about what you're doing with the money, don't  use an address where you have 10 bitcoin to pay for a new TV, or a car.

For people who ask if this is ethical, it is. Are they protecting your bitcoin in any way? Are they helping you hold it? Why would they want profit from that if for many years they did not even recognize it as store of value, not to mention money?

This depends on the law about taxing applied by the country.  If the country declared Bitcoin is taxable despite being not converted to fiat money, then the owner need to pay for its taxes.  But obviously this is dependent on the Bitcoin holder if he wanted to declare his Bitcoin holdings.

In my country, cryptocurrency is not taxable unless exchanged to fiat currency but there is always this condition of having a gain upon the conversion of the crypto currency.  If there is no gain, it is an obvious thing that we don't have to pay taxes for it.

I think the same concept applies in the US

If there’s one thing you can be certain of it is that there will be more taxes in the future. They’re not only exploring taxing Bitcoin transactions (they already do) and improving enforcement, they’re also looking at how to tax you on the Bitcoin you own even if you don’t trade or sell it. Going after unrealized gains with taxes is a real thing…

This is why I really do not want to interact some elders around the internet with the current changes we have now since most of them would just be close-minded on how technology works and like how limited some stuffs really just works.

As long as you're going to have Bitcoin go along with fiat money, there's obviously going to be like tax or at least "fees" that you're going to encounter beside of just having some mining fees. As long as there's some regulation going, there's always going to be taxes.

I don't really understand your question and the direction you are bringing it out from. How do you when you write "When fiat is no longer necessary" does it mean that Bitcoin will soon be the world currency very soon? You need to explain I'm details. There is no way that we will not going to continue exchanging Bitcoin for normal fiat. It is necessary and we ought to do that whether we intend to use an exchange or people around us. If we are in a country where tax is very important and is applicable then we will have no option than to pay.

^ That is the point, taxing unrealized gains means imposing taxes on the increase in value of an asset that you have not sold or realized any actual profit from yet. I think this concept can be particularly complex and controversial, as it challenges traditional taxation and raises questions about fairness, implementation, and potential economic implications.
However, this also depends on which country you are in because some countries consider cryptocurrencies to be taxable assets regardless of whether they are converted to fiat currency, while others only apply taxes when there is a gain realized upon conversion. The decision to declare cryptocurrency holdings and pay taxes on them often rests with the individual holder, and tax authorities rely on the honesty and compliance of taxpayers to accurately report their transactions and gains.

In every crypto transaction that we make we are paying transaction fee in order for our transaction to be successful for me it is already considered as tax.
And I don't really understand how would they or the government would tax the people earning in crypto if they don't even know who or how much they are earning if the person wouldn't present it to them?
There are so many ways to hide our asset and I think most of us are well aware of it, and it isn't happening just in crypto this has been on for so long.
So this just proves that if they really want to avoid the tax they would find ways to do it, not just in crypto but also in other assets as well.

Yes, if that time comes, the government had possibly acknowledged Bitcoin as a mode of payment and probably had created laws and regulations on taxing Bitcoin holders.  Though I do not think that there will be a recurring tax on the same amount of BTC a person is holding since it would be unjust to keep taxing the same BTC that was taxed before.


The transaction fee is paid within the Bitcoin system to be picked up by miners and our transaction to be confirmed.  Let us be aware that Bitcoin miners and the government are two different entity.


Because the government is entitled to demand tax from the gain of its citizen.  It is on the constitution and is in effect the moment we are born in that country.

As long those transactions would be passing up on a third party or platform then you are really that subjected to tax specially on fiat conversion on which it would really be just that a normal approach and the most nearest thing that i do have in mind in is on how to avoid taxes is to make out that p2p transactions face to face but this is somewhat that risky i would say and not all would really be that willing or confident on doing so considering that meeting up with some stranger which you do hold bitcoin or cash would really be putting you in danger.This is why only a few would really be having consideration on taking up such transaction and would really be just that prefer on touching up those platforms and services which do make out some direct conversion. Literally, if those USDT would really be siting somewhere else or not really that touching up or making out some conversion to be directly be deposited into your bank account then you cant really be taxed but on the time that it would really be traced up on your bank account then this is where questions been raised. You are really that subjected on paying up tax specially if your government is really that too keen and that too mindful about their citizens taxes no matter on what methods or ways or sources it do came from, they would really be always finding the
way that they would be getting out their share.  :D

On every cryptocurrency transaction we have pay fees based on exchange term of service with how much percentage fees trading, but right now our fees added by taxes payment when trading in cryptocurrency depend with government business how excited transaction volume in cryptocurrency every day. You not try what happen with our country taxes when trading and deposit fund in local exchange market, we have pay fees trade and taxes each time for deposit fiat to exchange account and taxes fees when trading transaction between sell or buy. Totally each time transaction almost 1% fees have to pay for taxes and seems crazy when cut loss position.

P2P on Binance and several exchange is the best choose how to avoid from taxes when withdrawing fund to local exchange, find trusted seller on P2P transaction and faster process for withdrawing fund than use local exchange market.

Have you ever read this source: Some things you need to know (https://bitcoin.org/en/you-need-to-know)

At that source - there are important points that you need to pay attention to even though they are at the end of the page. Here's the quote:


With that being said - I can assume that you still have to pay taxes on what your country's government has regulated including bitcoins. If bitcoin has been adopted as legal tender and you profit from it through investment and trade - then you are still liable to pay value added tax to the government.

Regulations regarding taxes are absolutely the authority of the country where he lives. Maybe it will be different in some other countries. In my country, taxes are imposed on users who trade on centralized exchanges registered in our country. The tax fee is simultaneously deducted along with the trading fee and later the exchanges themselves deposit the tax to the state, from a certain percentage deduction. but when withdrawing it to a bank account, for now there is no tax, except if you regularly withdraw money with a high nominal, there may be something like income tax. And this may be different where your friend is, but if that country applies taxation to crypto, surely he has to pay those taxes, whether he likes it or not as long as he's doing the transaction.

I'm not sure where he lives but if he lives in the US I think he's going to be taxed for his monetary assets the moment they become liquid. In the case of his bitcoins, he's going to be taxed for it soon as he convert it all into fiat. I suggest he take his money out little by little so he doesn't get taxed that much. Although I'm not really sure about the legalities of that since I'm not really living in the US and in my country, we don't get taxed for owning and converting cryptocurrencies into Fiat lols. If he's not living in the US then props and congrats to him, otherwise he's just fucked royally cause the IRS and the taxman will always catch up to him no matter what. Remind him that it's not bitcoin's fault that he's going to be taxed for his ownings, it's the government's fault for taxing everything with value to them.

But the condition is not exchanging Bitcoin to fiat. Naturally, Bitcoin is decentralized and all of your wealth into such currency shouldn't be taxed. But as we all know  governments won't allow such thing to happen. Taxation might be done to your properties as you register it to the local governments perhaps your house or your car. But for sure they'd make a way to also tax your daily expenses such as needs. One way to do this is thru a third party exchanger, they'd just won't allow it 'coz taxes play a huge role in one country's economy. Is it a bad thing? Well taxes should be having an impression of such but corruption just exists. If taxes are being used properly, then people won't complain of it.

It is better for that person to consult with a tax attorney as the laws of each country are different, however in some jurisdictions if you hold an asset for longer than a year before you sell it then you do not need to pay any taxes on it, so if such a law applies to him then he does not have anything to worry about, however he still needs to report this on his tax declaration, otherwise he may get in trouble even if he was not supposed to pay any tax when he sells his coins.

Taxes will be applicable at all times. Do you really think that your(or his) Bitcoin holdings won't be taxed if you(or he) never convert BTC to fiat?
There are income taxes, capital gains taxes and VAT taxes. You can't escape taxes in one way or another.
If that senior citizen doesn't know what to do with his BTC, then the best decision would be to just HODL them.
I think that exchanging BTC to fiat will always be necessary, because Bitcoin will never become widely accepted as a legal tender.
It's normal for old people to feel nostalgia about the good old times, when life was simple and they were young. I don't know how this relates to the question you are asking. ;D

The answer probably depends on how the person got that BTC and on the jurisdiction. If a person earned BTC, income tax would likely apply, even if the coins aren't sold for fiat. Of course, even that may depend on a jurisdiction, as there can be a progressive income tax, starting at 0% up to a certain point, or special rules for Bitcoin. So not having to exchange Bitcoin for fiat might help a bit, but that won't make all taxes go away. Even at that point, new legislation would have to be introduced if we want to ensure that Bitcoin isn't taxed.

The old saying of "Death and taxes" comes to mind, when I see questions like this. Let's say he has several bitcoins and he just use those bitcoins to buy goods and pay for services, then the merchant accepting it, will have to dox him, when the audit is done by the tax authorities.

So you can do direct payments without converting it to Fiat.. but it leaves a paper trail and that is what the tax authorities needs to ask the right questions, when they audit him.  ::)

It's in the far future which is quite unpredictable. Bitcoin is still not acceptable all over the world. We are still converting it to local fiat currency in order to use it. But in the future, if Bitcoin is accepted all over the world and there's no need to convert it to fiat, then that would be a whole new story. Governments are always trying to benefit from everything. Putting taxes on everything. Although there are countries where there are no taxes on crypto as shown in the image below.
https://i.postimg.cc/kMfvdTyD/screenshot-274.png
[Source] (https://cointelegraph.com/news/crypto-taxation-around-the-globe-what-do-regulations-look-like#:~:text=by%20countries%20across%20the%20globe.)

So it will be interesting to see in the future whether tax-free countries will put a tax on crypto or not. I think places like this would still exist and there will be places where taxes will still be put on crypto. Based on where we are from, this could change. As Bitcoin is still not accepted worldwide, we can not say for sure. Maybe when it's accepted, there will be universal rules on Bitcoin. Only time will tell.

See, I understand. Often, the past looks preferable because it is familiar. But lets not delude ourselves; the 1950s were not without their own problems. You've now dabbled in the cryptocurrency industry, a field that screams the future, but you still appear to be lost. Its a frequent emotion among people who are unaware of their own potential.

Your Bitcoin signifies a paradigm shift in how we view value and money; it is more than simply some digital gold. And yes, governments worldwide will ALWAYS find ways to get their cut. Do you believe tax regulations will not change even if the world completely switches to cryptocurrencies? No! They will undergo remodeling and reorganization. So if you're hoping for a world without taxes, I've given some bad news: keep dreaming! Take initiative. Learn more. Keep a close eye on the future while navigating the present.

Regulations and laws regarding the trading and use of Bitcoin actually vary from country to country. From time to time, the government may decide to impose taxes on these transactions, even though that may be disappointing to some.

I understand this feeling when I say that although we want to change this, the reality is that taxes are an inevitable part of life. While we may disagree or find it unfair, it is still an important part of maintaining public infrastructure and services.

As you can see the tax applied when selling Bitcoin and converting to fiat currency really depends on the tax regulations in each specific country. Some countries have clear regulations on whether personal income tax applies to cryptocurrency transactions, while others may have different regulations.

In addition, when converting Bitcoin to fiat currency is no longer necessary, it does not necessarily eliminate the possibility of tax application. Certain circumstances may require users to report earnings from cryptocurrency transactions to the government.

This will depend on your country if your country has a tax on bitcoin for sure, once you sell your assets, there's an equivalent percentage of it, many people to escape those taxes find a way to other countries they know a friend of them or family and let those exchange and brings back to them into the form of fiat currency but for me it's quite hassle because it's the same way if you will use third-party applications for example exchanges, you will sell your bitcoin but it into 1:1 ratio still there's a fee once you make in a withdrawal too there's a percentage of it, use the things you have to get convenience that's people now are paying to, because tax is every where.

Correct especially on US. Cryptocurrency on US is already fully regulated and you will need to report all your taxes on crypto from your profit/loss even if the user doesn’t convert to fiat or else you will face some charges when the IRS audit your exchange account.

I remember before that many people in crypto ask for a regulation on crypto as safety for there investment. Now it’s already backfire since they are paying taxes and can’t hold Bitcoin without any report sent to the IRS.

I like the digital age than analog age. And bitcoin is also a digital currency and not analog currency. Analog currencies are the fiat physical currencies and that is why they are trying to use mixed currencies which is the fiat and the CBDC. And it is not working in many countries. Someone that has money and don't want to pay tax is a greedy person who does not want for the development of the country. When bitcoin is use directly to pay goods and services from p2p, I don't think there will be any taxation again since Bitcoin decentralized.

Bitcoin is decentralized but remember that it's not completely anonymous so you can only evade paying taxes as long as possible. Maybe you can get away for small transactions for some time but don't expect these authorities not to connect them and catch up.

Bull runs end with a short-living peak and a sharp fall. If you sell in the bull market, even after paying taxes, you will have more money than the average value of your coins during the bull+bear market.

To illustrate, look at the 2020-2023 period, what's the average price? I'm not going to look it up, let's just say it's $40k. But if you sold at $60k and paid 20% tax, you'd have $48k.

Initially, it's crucial to show respect for and adhere to government regulations, particularly regarding taxation. Certain nations, such as the US, exhibit a stringent approach to tax matters, making it challenging to evade taxes while residing there. However, should someone genuinely wish to avoid taxes, they might consider utilizing peer-to-peer platforms to sell Bitcoin. Although I can't confirm whether centralized exchanges automatically deduct taxes, this might differ in regions without crypto support. Engaging in anonymous selling could potentially provide an avenue to evade taxes.

Yes. In every negotiations you have a taxed service or product. When you offer your services or sell your products you have to open a company on the respective governmental organ to operate legally and every sale made you have to notify the government about that. So, the taxes will be applied over your sales, doesn't matter if the customer used fiat or Bitcoin to conclude the negotiation.

Moreover, when you buy a product, usually taxes are already inserted on its final price. When you use Bitcoin to make a purchase you are already paying taxes automatically. There is no way to avoid this.

It would be very utopian to imagine a time when Bitcoin is the only currency needed and a state does not require taxes from its citizens.  How could a nation stand, with what income?  Should there be private insurance that covers most of the services and how would it cover the public expenses it has to bear?  Roads, parks, land reclamation, lighting, etc...

The scenario is BTC -> fiat, so I reckon there will always be taxes involved there. In the first place isn't everything he buys and pays for have taxes already involved in them? I don't think adding one more to the pot would be that much of a problem for him.

If there's no need for the conversion to happen, and in essence means that crypto is globally accepted and globally used now, taxes would probably still exist, but not for the conversion but rather taxes like what we have right now. I hardly doubt government accepting crypto payments as a possible method would allow it to bypass tax in the first place, heck they might even impose larger tax in comparison to fiat (or cbdc or whatever they have by then).

I like that jurisdiction you said there about holding an asset. I think if many countries has this same jurisdiction then I think many people will now HODL their Bitcoins for a long time because I know that many people doesn't want to pay a tax. This is a good thing to the Bitcoin world because this makes the Bitcoin network stronger and its value can also grow bigger this time. Although this may seem a bad thing for the governments but I think they can still be able to collect tax the other way.

There are still things out there that can be taxed and people can't possibly avoid them. A few examples is when we play gambling, and buy our groceries in the mall.

This issue of taxing with btc transaction is just what the government uses as an edge since they themselves cannot control users fund with the decentralized nature of Bitcoin so it's only understandable that they tax it and many countries including mine which CBN previously banned the use of crypto are now looking other initiative to actually be able to task crypto transaction.

To the best of my knowledge, Bitcoin or Crypto are still treated as property similar to stocks or other investments, and if you hold them profitably or otherwise, you are tax-exempt, or tax-exempt. But it depends on which country you live in.

And maybe when converting Bitcoin to fiat or buying something with Bitcoin there is a possibility of being taxable, and I don't know exactly either. However it's a good idea if you are buying and selling Bitcoin or Crypto or just keeping it, you should find a tax professional who understands these issues and discuss your situation with them.

It's silly if the reason he doesn't want to sell his Bitcoin is because he doesn't want to be taxed. He would sell it and receive fiat, he's already being taxed heavily in fiat so what difference does it make?


In a time when we wouldn't need to exchange Bitcoin for fiat means Bitcoin has now been globally acceptable as a means of payment. If you're being paid with Bitcoin you'll pay income taxes.
If you buy stuff with Bitcoin you'll pay the VAT and other taxes just as it is with fiat money.
But all these depend on the country you're in.

Tax matters are different for different countries.  It depends on which country you live in. because this matter is determined by the government of each country. If I want to tell my personal side Bitcoin is not yet legalized in my country. And there is no local bitcoin wallet in my country so again bitcoin holdings cannot be tracked by the government.  And we never pay taxes to the government for bitcoins.  But when we convert these bitcoins to fiat and keep that money in bank or invest elsewhere then we have to pay tax return for that money every year.

Government will find a way to tax us, Bitcoin might be centralized but it's not totally private, on the opposite the transaction is very publicly transparent, the government could monitor the transaction. The government wouldn't be able to manipulate bitcoin transaction and price, but if the bitcoin is legalized, they probably find a way to control which wallet that people could legally use, they can sue people for using illegal wallet that is not registered as an ownership. But then again people can use VPN and covering their track of transaction, but that could be criminal in the future.

I mean after all we talk about possibility here, only very few things seems impossible nowadays.

First of all everyone has their own outlook towards life and technology. If that senior citizen from a western country prefer 1950's time better than today's time then that's his own choice. The analog times were really great for the people who lived in that era because they were used to those things and they have spent most of their lives with those analog based tech stuff. However, the good thing about that senior citizen is that he still got interested in Bitcoin and invested money into it which really show that how visionary that person is.

Well, trusting Bitcoin's self-custody is also his own right and choice and I must say that having Bitcoin in one's own custody is the safest way to go with it for long term. He has done a really smart step to secure his Bitcoin and holding it in that way is truly appreciable, but his complaining about Bitcoin's sitting in that hard wallet isn't necessary at all because I also think that the Bitcoin's should stay in that wallet for the time being and whenever he finds a much profitable price range only then he should think about selling those Bitcoin.

I don't think that by selling his coins he'll be taxed and that's not even necessary for him. The Bitcoin is totally decentralized and it's someone's own property, and if someone wants to sell it then that person doesn't need to pay any taxes. I would recommend your friend to go with the decentralized way if he wants to be safe from those huge taxes because the centralized and regulated way will always have taxes during each step. I really don't think that at current times most of the countries are taxing the users who are converting their Bitcoin into fiat, but if in future something like that happens then your friend should try to decentralized way to sell his Bitcoins.

just consider this situation, those registered local crypto-exchanges are already paying tax to the government. so somehow, we are already indirectly paying taxes to the government. remember, most of these local exchanges are requiring kyc from their customers, so they have the database of all their users, and one legal request from the government, they can easily turn over their data to the government if necessary.

Tax is only required when you use a business-registered entity to buy things, service, etc. regardless what your payment is, either in bitcoin or fiat. But talking about a senior citizen, some country do exempt them to pay tax. I just don't know how it can be done when purchasing online, unless there is a form for senior citizen details

I think the government will not let it happen, may be government will do anything to make the citizens pay taxes. but it is still possible if the fund is not tracked, some country prohibit their citizens to use other currency except it's national currency. I think it is normal for people try to avoid taxes, even many companies did it.

Governments hate the idea of a peer to peer currency, the banks as a middle man report everything to them and as such they can easily track how you are spending every single cent of your money, now with the advent of CBDCs they want to take that place and become even more intrusive when it comes to the uses you can give to your money.

However bitcoin basically circumvents the measures they have taken to control your money and how you use it, and it would not surprise me if at some point they forbid all wallets except their own in an attempt to try to force you to use a wallet created by them and not allow you to truly own your coins.

Depends on what country you plan to use your bitcoin without exchanging it for fiat. In my country, it's pretty to exchange your bitcoin for fiat without the worry of taxation as most of us are already paying taxes through VAT(value added tax) when we buy goods and services, taxation is the worry of the uber rich and business owners here in the country. Regarding taxation of bitcoin even if you don't exchange it for fiat, I think that the government will eventually agree to it that they have to tax it even if it's not exchange into a fiat, taxes is the blood of a country and no one messes with that, this old man that OP is talking about is better off moving permanently to a Caribbean or any tropical country to spend his bitcoin and enjoy retirement.

It is certain, most people who lived in the 50s would not feel comfortable with life in this era. Because in terms of habits and in terms of technology, it is clear that they are very different. So it's not strange if parents or the elderly complain that life nowadays is not as comfortable as it used to be. Especially if they are still living in today's era, their age is too old, which is certain even though today's technology can be said to be more sophisticated than in the past, the majority of the elderly certainly won't understand how it works. Maybe that's why the elderly complain about life in today's world.
Basically crypto currencies like bitcoin must be subject to what is called a tax. Because in every country, there must be an institution that oversees the trading and investment system just like cryptocurrencies like bitcoin. So it is certain that every transaction will be subject to the applicable tax in that place. But what if bitcoin is not converted into money, will it still be taxed. Maybe the tax will still apply, because apart from the tax on transactions, there is also a tax on bitcoin (crypto) ownership. Then apart from that, every country must always emphasize and want the benefits of an asset like bitcoin. So if bitcoins are not converted into fiat currency, most likely the taxes will still be there. Because basically where we stand, there is a government that always cashes in or invests taxes in it.

So the elderly, actually don't need to worry about taxes when making sales. Because if he buys bitcoin at a low price and sells it during a bull run, the elderly will automatically benefit. And the taxes are definitely there, but even so, the elderly will not spend the profits he earns from bitcoins to pay taxes. So don't be too concerned about the opportunity.

Yes, it works according to the tax laws of each country. Bitcoin is taxed more than fiat in many countries. So many sell their bitcoins at the end of the year. Due to which the prices of Bitcoin and other cryptocurrencies are seen to decrease every year towards the end of the financial year. Because they convert to fiat to avoid high tax and buy crypto again when tax is paid. So it is not possible to specify what kind of laws a country has because there are 195 countries in the world and it is not possible for us to keep track of every country.

It appears that new regulations might be on the horizon, introducing a distinct tax framework for Bitcoin transactions or crypto exchanges as opposed to traditional fiat transactions. Up until now, the crypto community has grappled with taxation primarily in the realm of BTC-fiat transactions. However, as Bitcoin becomes more mainstream and gains traction as a means of transaction in various retail settings, the taxation dynamics could potentially undergo a divergence from the conventional fiat model.

The specifics of these changes are contingent upon the tax regulations upheld by each individual country. In my own nation, there are no indications as yet that Bitcoin can be utilized for in-store purchases. Consequently, taxation is levied upon direct crypto-fiat transactions conducted on exchanges, with the resultant tax deductions being facilitated by the exchange itself.

Some of the countries have already imposed hefty tax on crypto and even on every single crypto transaction as well as trade, this is literally killing the essence of bitcoin as it was meant to be a source of financial freedom from corrupt government and regulators but unfortunately it looks like we have ailed, I know some of the users might say there are stores which accepts bitcoin as a payment but it's not practical to have it as source of payment considering the time it takes for transaction and for huge transactions even if price varies little bit then the receiver will incur profit or loss.

Seems like we cannot escape from clutches of regulators and taxes.

This whole bureaucracy around crypto-taxation is nothing but sad. While the world moves quickly forward, led by the genius of blockchain and the promise of Bitcoin, some people are still stuck in the old ways of taxes. Wasnt the whole point of Bitcoin to test old ways of doing things?

The boring transaction-based tax policies that countries have been using as an excuse to be lazy with paper currencies will soon be out of date. As Bitcoin becomes more important, governments should act quickly to keep up. Your country's refusal to accept Bitcoin as a way to pay for things in stores is, to say the least, short-sighted. Bitcoin is a technological revolution, so it would be silly to limit its use to just trades. In the future, Bitcoin wont just be a shadow of traditional money; it will be the main thing. Prepare, or you'll fall behind.

Just like fiat money where people are taxed through VAT in most items they purchase, same will apply for in those countries that accepts payments with bitcoin. Except for people that are tax invaders, otherwise I don't understand why the said man is scared of paying a little token as tax for coins he has made and still would make more profit in the event of the next bitcoin ATH.
For countries like ours were there are strict policies against cryptocurrency use, if it were only a thing of tax payments we won't be having issues with it, but unfortunately different is the case.

That question is relative. It depends on the country you live in. For instance, some country haven't really put together the framework to tax cryptocurrency transactions. So it will be difficult to give a general answer your question.

I can't directly answer your question simply because I really don't see something like that actually happening. Or maybe it could happen in some small countries but I can't even image countries like the US, the European Union, Japan or China using bitcoin like their first currency, they would have no control over it, they couldn't print more, it's something pretty much impossible.

Hmm, apparently this could be one of the unknowns that many countries have not been able to decipher in order to integrate bitcoin, the fact of how to manage it so that it can bring a benefit to both the country and its citizens is questioned a lot, without harming them as such and without it getting out of hand, since everything is done virtually and transactions can be carried out without going through a third party, this makes it difficult to collect a percentage as is normally the case with banks, causing people to evade these… It is a reality that if a currency enters the country and is used for any type of commercialization, a part must be paid to the government, that is called a tax, the question is how much must be paid and how it will be done, since it is not active It's stable, it's extremely volatile, so it gets a little tricky, but not impossible...

I suggest you consult a professional for guidance on this issue as it is a sensitive one and differs country to country. Some countries are very stringent with their tax laws and do not take lightly tax evasion of any kind. Is will be much better to pay the tax. I think it will vary depending on the government views on the subject.

As far as I know countries where cryptocurrency is legal must pay taxes to the government. Whenever you sell your bitcoins and convert them to your home currency, you will be liable for tax. But when you hold your bitcoins in a wallet without selling them, you don't have to pay any taxes and they stay the same for a long time. But when you transfer your bitcoins from the wallet and sell them, you will definitely have to pay tax.

In some countries where crypto is taxed like the US, you’ll likely be taxed once you convert crypto to fiat. As for just holding cryptos, it won’t tax you.

But it would be ridiculous if a country has some kind of ruling on where you get taxed for unrealized gains. I think I’ve heard that news before in the US, but that was just a proposal.

Right here in the Philippines, there’s no system yet about crypto taxes. But it still falls under the general rule where anything that is realized income are subjected to tax if our income is above P250,000 in Philippine peso.

I don't understand why should someone pay taxes on capital gains from Bitcoin. I mean, just use decentralized P2P exchanges, slightly shut your mouth and don't act like you are a cool guy who doesn't pay taxes, you are not a Robert Kyosaki. If you never mention that you own crypto and if you exchange them P2P through DEXs, then I don't really understand how can someone prove that you are avoiding taxes. P2P exchange can happen for any reason, let's say your friend gave you money as a gift, what's wrong?

Or if you have some money, you may be able to become a citizen of country where you won't have to pay taxes on crypto gains and that won't be hard, things are never done as written. I sometimes laugh when people say you need job visa that's very hard to get to come in Europe, c'mon guys, how do you think these emmigrants from all over the world come here and work unskilled jobs? There are loopholes that everyone knows, these loopholes are intentionally left.

As many have already said, it depends from country to country. However, if cryptocurrency is already legal in that specific country then I am sure the government of that country will find a way to ensure that it will fall under their tax laws. Taxes are vital for the government as it is needed for their projects and for the finance of the government. However, it still depends on how strict and dependent the country is on taxes.