You will fall into " receiving funds from outside of U.S." and its not pretty when I.R.S ask you.
We have some rights, the fifth amendment is one of them. The legal burden of proving ownership would be on the I.R.S. I would not be legally obligated to say anything. The fact: they will not be able to enforce these tax rules. This all said, I'm gonna go wash my coins real quick, Pretty sure my IP is in the ledger from the last time I transferred them. Then by all means, let us know how it goes a year from now  |
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When you think about it, the IRS ruling encourages miners to sell their coins on the open market sooner rather than hoarding and selling later. Seems to possibly help liquidity and stability of bitcoin.
That is a misunderstanding. The capital gains rates are lower than regular income rates to encourage investment, over actually running a business or working for a living. In any event, I don't think any of this is going to effect bitcoin much. The big point in all of this is the good news that the irs is helping To legitimize bitcoin rather than trying to help ban it. Actually trading btc falls into capital gain is a good news. It would reduce day traders due to higher risk (up to 43% of profit is taxable) As for big investor like Secondmarket, they're more likely holding their btc for long term capital gain. Wouldn't it still be capital gains if btc was currency Nope Where there are currency gains or losses in connection with a trade or business or with the management or administration of investment assets, the gain is treated as an ordinary gain (rather than as a capital gain) and any loss is generally treated as an expense |
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Not a single Satoshi I own is traceable to me as a individual.
Anybody could own my BTC, there is no way for the I.R.S. to prove otherwise. QFT. Localbitcoins + cash = perfect anonymity. Besides, you could just claim all your BTC was gifted to you by a non-US citizen. Unless they can prove you're lying in a court of law, you're fine. See if they spend the money on you. Unless you're a WHALE, they won't bother. Terrible advice, you sound like just you're just a kid whos thinking about tax recently. You will fall into " receiving funds from outside of U.S." and its not pretty when I.R.S ask you. |
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Who cares wtf the I.R.S. does.
Not a single Satoshi I own is traceable to me as a individual.
Anybody could own my BTC, there is no way for the I.R.S. to prove otherwise.
Bitcoin was designed in a way that you should all be able to safely ignore the I.R.S. on this issue.
In reality most of BTC value is attributed to that fact, silkroad is what gave BTC value, gambling sites also helped.
I dare you to do what you said if you live in U.S. Unless your total btc holding is worth couple thousands USD. |
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When you think about it, the IRS ruling encourages miners to sell their coins on the open market sooner rather than hoarding and selling later. Seems to possibly help liquidity and stability of bitcoin.
That is a misunderstanding. The capital gains rates are lower than regular income rates to encourage investment, over actually running a business or working for a living. In any event, I don't think any of this is going to effect bitcoin much. The big point in all of this is the good news that the irs is helping To legitimize bitcoin rather than trying to help ban it. Actually trading btc falls into capital gain is a good news. It would reduce day traders due to higher risk (up to 43% of profit is taxable) As for big investor like Secondmarket, they're more likely holding their btc for long term capital gain. |
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I have yet to receive any notices from the IRS over any bitcoin that I sold. I don't just hand my money over to thieves.
Usually when you receive notices, it would be too late... Either move out of US or you would be broke. |
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Do you have reading comprehensive problem? English isnt my first language and i can even understand IRS ruling perfectly.
Do you understand what "capital gain" mean? Think about it for 5 sec.....Let me explain to you what IRS is saying:
MINING will not be taxed as capital gain (since there is no capital in the first place ...duh), it will be included in gross income.
Capital gain ONLY APPLIES to SELL AND BUY btc as bitcoin is a property.
So any mining income will be taxable income. When you sell those mined btc, you might have capital gain/loss. Remember the max capital loss you can claim per year is $3k, the rest will be rolled to next year.
Not true, please read it again. When you mine a Bitcoin you must pay capital gains tax equivalent to the market value at the time it enters your wallet. The capital gains tax is at a higher rate than regular income within the first year. When you mine a Bitcoin you are responsible for the capital gains tax at a rate of 36% and future gains will be taxed at the time of sale. You can only claim regular income on USD; not Bitcoin. If you hold Bitcoin longer than one year your tax rate decreases. Ok, you're just an idiot. At first i had my doubt, but you confirmed it Q: Does a taxpayer who "mines" virtual currency (for example, uses computer resources to validate Bitcoin transactions
and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting
from those activities?
A: Yes, when a taxpayer successfully "mines" virtual currency, the fair market value of the virtual currency as of the
date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information When an ESL has to explain English to you, you know you're stupid. |
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I'm understanding it clearly. The tax rate on a capital gain within 1 year of acquisition is greater than standard income tax.
You are thinking that the long term capital gains rate is higher than the regular income tax rate. It is not. The OP didnt understand the ruling at all... Mining income is never considered capital gain. Its just regular income .... like he wishes. |
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i laugh at the panicking people that have not fully understood the ruling or the method of tracking/auditing. nor spoke to a accountant about it, but they simply start a petition to change something they dont understand.
Well my problem is that my accountant actually said a lot of very reassuring things, except they appear to be directly contradicted by the IRS publication even though he's read it. I don't really feel like getting audited. I met with a CPA today and he seemed to advise we only record income on spent BTC. For example, I buy mining gear with BTC, so the act of exchanging BTC for dollars or a good that are "real" is when we will record as income. This means the non-exchanged BTC only has a cost basis at where it was mined. Some of his advice seemed to contradict the IRS Q&A publication, but when I pressed on those he made the point that if I'm holding and not exchanging that it doesn't need to be reported as there's no taxable event. What he was advising sounded a lot like what I was hoping for, or what I thought would make more sense, but I do know the official guidance seems to state things differently. We both agreed it seems silly to report income on a virtual thing that is highly speculative. I mean, if you get $90k in mining payouts but at the year end some big news makes BTC worthless or illegal then you would owe taxes on that income but never saw and dollars, services, or physical goods from purchases because it was never exchanged and ended up worthless. He did say their guidance seems unclear enough that we come up with a method and stick with it until/unless they clarify. Lastly, a bit of confusion how to report some of the expenses, but I need to send him my spreadsheets, more to come... Your CPA is an idiot and so you are if you use him. IRS ruling clearly indicates there are 2 possible ways of acquiring btc: 1) Mining: a taxable event that will be in your gross income based on fair market value of the mined coins. There will be another taxable event when you sell those coins, thus fall into capital gain. 2) Buying: there willl be a taxable event when you sell btc. |
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Well I like the tax implications with regard to purchasing BTC.
I suppose the real question is about mining. When a coin is mined it's a capital gain. However, a capital gain is valued on the market value and it isn't taxable until you take possession of your property. If you don't own the private key you don't own BTC remember?
You cannot be taxed on coins that you do not yet own.
When you pool mine BTC for profit you should have your coins transferred to an exchange where they can be traded for USD. You have never owned those coins, the blockchain will confirm that they were never in your possession, and a reasonable argument could be made to eliminate capital gains tax because of the ownership.
Don't send coins to your private address from the mining pool; trade them for USD, then buy BTC with USD and spend the newest hashes first... Capital gains on miners is greater than regular income. This should be sufficient to claim it was regular income.
The law is on your side when it comes to property.
Do you have reading comprehensive problem? English isnt my first language and i can even understand IRS ruling perfectly. Do you understand what "capital gain" mean? Think about it for 5 sec.....Let me explain to you what IRS is saying: MINING will not be taxed as capital gain (since there is no capital in the first place ...duh), it will be included in gross income. Capital gain ONLY APPLIES to SELL AND BUY btc as bitcoin is a property. So any mining income will be taxable income. When you sell those mined btc, you might have capital gain/loss. Remember the max capital loss you can claim per year is $3k, the rest will be rolled to next year. |
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Hey man I explained everything in the clearest language I can. If you still don't understand it I recommend you read some economics books. You keep getting stuck on the word "value" which you confuse with price. I'm using "value" correctly as an economic term This is the formula of value as it relates to monetary instruments;  Where the subscript t indicates the present time, Pt is the current fair value, Yn is the income at a future time n, FVN is the face value that will prevail at maturity, Et indicates current expectations about income and face value, dt is the current discount rate imposed by bearers, N is the time lapse until maturity (n = 0 is the issuance time). There is a wide variety of financial instruments using that formula. On one extreme are modern monetary instruments that, provide no income (Y = 0), have an instantaneous maturity (N = 0), and are widely expected to be taken back by their issuers at their initial face value at any time, Pt = FV0. On the other extreme are stocks and consols that have a positive expected income and an infinite maturity, Pt = Et(Y)/dt. Given the nature of monetary instruments, they have also other characteristics common to all financial instruments. First, all financial instruments are accounting creatures. They are the asset of the bearer and the liability of the issuer. Gold coins were the liability of, e.g., the King, Federal Reserve notes are liability of the Federal Reserve, and coins are the liability of the Treasury. Currency is their liability because they (at least) promise to take their currency from bearers in payments at any time; issuers owe that to the bearers. That is partly how their scarcity is controlled. Second, all financial instruments have a fair value that is defined as the discount value of future streams of monetary payments. If you aren't equipped to understand economics stop embarrassing yourself when someone with that background is trying to help you learn This has nothing to do with fiat money backed by an issuer would mean there must be value, idiot. And if you have to copy someone's blog, at least quote it and giving credits to the author. Dont pretend like you wrote it, how embarrassing....  Do you also copy other's essay in school? Link to the original article: http://neweconomicperspectives.org/2013/12/fair-price-bitcoin-zero.htmlI read this sometimes in Jan. I will give you sometime to think b4 i come back to explain the flaw. |
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It made more sense to buy btc instead of mining now.
No miners will be ROI with current exchange rate
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These Israeli guys are very smart. If they are also greed, we all lose in this game. We just take all risks for them!
Keep it to yourself, idiot. |
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You guys really think Saudi Arab has any control?
They're practically US's bitch and do what US tell them to do. How do you think they can live their rich lives in peace?
If they ever do stupid shit like the tittle, US will not be their guard and boom, Islamic neighbours will literally rob and rape them.
Russia and China will protect them! Probably Canada too!  Hahaha ... pls... Canada is also US's bitch. Whats in it for Russia and China? GOLD? US is the largest gold holder in the world Bitcoin? uh.... 2 dictators want to support freedom of wealth? dream on |
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Another idiotic thread What is it that bitcoin has attracted so many dumb asses recently? PROC has no problem with capital influx. Bitmain can use exchanges outside of china and wiring fund into its bank in China. Infact i bet thats what they're doing given the yuan has been down lately. |
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You guys really think Saudi Arab has any control?
They're practically US's bitch and do what US tell them to do. How do you think they can live their rich lives in peace?
If they ever do stupid shit like the tittle, US will not be their guard and boom, Islamic neighbours will literally rob and rape them.
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The block chain is a ledger but there is no issuer to guarantee the value.
Did you fcking read "zimbawee dollars has as much value as my dog's poop" Retard, value cant be backed by anyone. Something has value because someone willing to give its value. Please child, calm down. No one said price is guaranteed. What I said is money comes from an issuer who backs that money as a promissory. Whether its convertible to grain, gold or legal tender. Doesn't matter if its currency form is rocks, shells, coins or sticks w notches in them. All money have the same quality. They are financial instruments. Essentially an IOU. Because it is issued and backed you can go around and exchange with other people as money. Of course if the issuer goes insolvent the money cease to exist because the issuer cease to exist Bitcoin has no issuer. Its entirely faith based. Its fiat like USD because it is not convertible to anything except bitcoin. Except USD are legal tender meaning I can pay my debts to the US govt with it i.e. taxes which I am required to do by law. Get it? All that rambling and you still couldnt argue your point of "its value is backed by issuer" Who told you the German government didnt exist during 1923? Like you said, USD is a promissory by the government. What that means is $1 USD will always be $1. However, its value is never promised or backed by the issuer. Legal tender does not give its value. Zimbawee dollars are also legal tender in the country. Can you stop making a fool of yourself? Bitcoin doesnt need a promise because its verifiable and not counterfeit-able. None of both are promised in value. |
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The block chain is a ledger but there is no issuer to guarantee the value.
I'm fairly certain that is a feature, not a flaw. Alll I'm saying is bitcoin is entirely faith based because no issuer backs the value. This makes then entire system unstable and can crash if that faith is challenged What an idiot. Define value idiot. 10USD will always be 10USD but its value is never the same thro times. Exactly. With 1$, it is always worth 1$ because backed by issuer. I didn't say anything about purchasing power. But 1 bitcoin is only worth 1 bitcoin because users "believe" in it. There is no issuer to back the value. It could vanish. Maybe I'm confusing you w the word "value". If no one issued the currency then there is no one to take it back. If there is no one to take it back it loses its "value"Did you fcking read "zimbawee dollars has as much value as my dog's poop" Retard, value cant be backed by anyone. Something has value because someone willing to give its value. In 1923, the German actually burn their money to keep themselves warm. Yes the "issuer" could take those bills back too... is that value to you?  |
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The block chain is a ledger but there is no issuer to guarantee the value.
I'm fairly certain that is a feature, not a flaw. Alll I'm saying is bitcoin is entirely faith based because no issuer backs the value. This makes then entire system unstable and can crash if that faith is challenged What an idiot. Define value idiot. 10USD will always be 10USD but its value is never the same thro times. Exactly. But 1 bitcoin is only worth 1 bitcoin because users "believe" in it. There is no issuer to back the value. It could vanish With 1$, it is always worth 1$ because backed by issuer. I didn't say anything about purchasing power Do you even read what you wrote? You said fiat money's issuer back its value then made a fool of yourself by not even knowing what value means. So explain to me what the issuer back then? $1 is $1 , 1 btc is 1 btc. Issuer or no issuer. |
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Money is things with true value that aren't based on someone promising you that it will be worth something tomorrow (certainly not a bunch of criminals), things like Gold, Silver, Platinum etc.
If all the humans who value those things (Gold, Silver, Platinum, etc.) die today, those things wouldn't be money either, so I think your definition is lacking. True value doesn't exist. Value is a relationship. Something or someone has to give value the object being valued. Please stop trying to blur the line between actual useful resources and fancy seashells that you and your pals dug up, some things have intrinsic values like Gold, some thing have value for their use as a currency and the free market (such as Bitcoin) some have none like USD. Since opinions on the ideal currency change this only leaves Gold with solid intrinsic values, you can no more call a dollar bill money than a seashell. Intrinsic value? How much intrinsic value does gold have in a world with no humans? The poor combination of words "intrinsic value" still requires a relationship to provide that value. I don't see anything intrinsic about the value. Heck i find most idiots on here even dont know value =! price. Like the idiot who said fiat money issued by government and backed by government always has value..... Yeah.... 1 trillion zimbawe dollars has as much value as my dog's poop. |
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