How do I avoid uncle sam to stick its hand in my cookie jar and takes the tax share?
What if I don't report it?
Face to face trades. Of course, not paying your share into a system that you benefit from makes you a freeloader (or at the very least a leech). I'll gladly pay the transaction fees/withdrawal fees of trading my bitcoins into USD and then transfering USD to my bank account. I'm paying my share to the system I benefitted from, BTC that is. I didn't benefit from USD. So you don't use roads? You don't take advantage of the electrical grid? You aren't protected by the US army? You won't receive social security? /devilsadvocate Yes, I do... that's why I have a regular job that tax me %28 of my income so, the money that I invest in buying mining equipment or btc has already been taxed... Now this line of reasoning might actually have some legs. I find myself very sympathetic to it. But the gain of that investment wouldn't have been taxed yet. And you can (rightfully) deduct the expense of your investment to avoid being taxed twice on it. Would this be an investment or a method of creating a Bitcoin dividend? Does Bitcoin has official designation under the tax code? I saw the guidance of the U.S. Treasury calling it a "virtual currency" but does that mean the IRS is treating it as that. Until we have official designation under the tax code, I do not believe he should need to declare it at this time. It would be taxed as income at the time it is generated. Any increases/decreases in value after generation, if held for less than two years before sold, would be treated as ordinary income, if held for more than two years before sold, would be treated as capital gains/loss. That is my understanding of the application of existing tax laws as of 4 years ago when I took a tax accounting class. I treat it as capital gains exactly because the IRS hasn't made any official rulings on it - they haven't declared it to be a valid foreign currency, so I don't see treating it as gains on foreign exchange as the correct route to go yet. In my opinion, it cannot be declared as anything other than an asset (and gains/losses on that asset would be treated as such) until further ruling from the IRS. |
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Just keep an eye out for larger black holes appearing with a greater gravity.
There are only 3 possibilities for currency: 1) Inflationary, see $ 2) ~stable, see €. 3) Deflationary, see bitcoin, the only case resembling a blackhole. What would be a larger blackhole? A different and better cryptocurrency. |
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How do I avoid uncle sam to stick its hand in my cookie jar and takes the tax share?
What if I don't report it?
Face to face trades. Of course, not paying your share into a system that you benefit from makes you a freeloader (or at the very least a leech). I'll gladly pay the transaction fees/withdrawal fees of trading my bitcoins into USD and then transfering USD to my bank account. I'm paying my share to the system I benefitted from, BTC that is. I didn't benefit from USD. So you don't use roads? You don't take advantage of the electrical grid? You aren't protected by the US army? You won't receive social security? /devilsadvocate Yes, I do... that's why I have a regular job that tax me %28 of my income so, the money that I invest in buying mining equipment or btc has already been taxed... Now this line of reasoning might actually have some legs. I find myself very sympathetic to it. But the gain of that investment wouldn't have been taxed yet. And you can (rightfully) deduct the expense of your investment to avoid being taxed twice on it. |
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Is there a list somewhere of all of the publicly-available servers/websites running Abe? When blockchain.info was down, I went looking for one, but couldn't find any that were still running.
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Just curious, what happens to a person's MtGox account if their yubikey is lost/stolen/broken/etc? I'm assuming they would have to contact MtGox support and prove ownership of the account or something? Has anyone had this happen?
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You forgot:
- Cypress
- NZ
- Italy
All three countries are planning or attempting to plan to confiscate a percentage of their citizens' savings accounts. People in those countries are going to be fleeing the national currencies like a bat out of Hades, you just watch.
You're out of your fucking mind if you think people who would be effected by that have any idea Bitcoin exists. This is a self fulfilling price, people have an idea of what Bitcoin is worth therefore they won't let it reach below a certain point. Bitcoin has little to no practical and no tangible value. There is no reason it should be at this price. So no one on this forum lives in Italy? Or Cyprus? Or NZ? I'd imagine all Euro citizens are getting a bit nervous as well, wondering if their bank account balances are next. Any of them who already know about Bitcoin and have money on exchanges probably bought in yesterday. And more of them are most certainly going to hear about Bitcoin in the coming weeks as they look for alternative places to store their wealth, out of the reach of governments. I hope you shorted Bitcoin hard.  |
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Check with a proper accountant. I pay 16% on BTC income which is not bad at all compared to the usual 60% we're forced to pay on other activities (eg. being employed in a company).
%60? I work in a company and I don't get taxed %60.. hell not even the highest tax brackets in the US get taxed %60. Are you a slave? try to come to italy 60% is rather good here. And yet they still have to confiscate a portion of Italian's savings accounts despite the insane tax rates. |
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You forgot:
- Cypress
- NZ
- Italy
All three countries are planning or attempting to plan to confiscate a percentage of their citizens' savings accounts. People in those countries are going to be fleeing the national currencies like a bat out of Hades, you just watch.
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Oooh, going to integrate this into one of my scripts as well.
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Check in with me when BTC = $3,000.
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How long has FinCEN known about Bitcoin and been planning to regulate it?
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The new FinCEN regs are going to put BitFloor out of business. Adios, 12 BTC...
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This price movement is very hard to understand. It was at such low volume for days and now its like a fire got lit up under its ass.
Cyprus and FinCEN. |
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This didn't surprise me one bit. With the FinCEN and Cyprus news, I told my wife we'd be hitting $100 within a week. I still wouldn't be surprised to see that happen.
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How do I avoid uncle sam to stick its hand in my cookie jar and takes the tax share?
What if I don't report it?
Face to face trades. Of course, not paying your share into a system that you benefit from makes you a freeloader (or at the very least a leech). I'll gladly pay the transaction fees/withdrawal fees of trading my bitcoins into USD and then transfering USD to my bank account. I'm paying my share to the system I benefitted from, BTC that is. I didn't benefit from USD. So you don't use roads? You don't take advantage of the electrical grid? You aren't protected by the US army? You won't receive social security? /devilsadvocate |
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1) Aside from US-based exchanges (and international exchanges dealing in USD) having to register as Money Transmitters, what are the other real-world implications of the new FinCEN regulations?
2) How much does registering as a Money Transmitter actually cost?
3) The way I understand what is written in the FinCEN statement, miners who sell directly to other people would have to be registered Money Transmitters, but miners who sell to other people through an exchange would not (since the exchange is already acting as the Money Transmitter in that case). Is this true?
4) How feasible would it be for the government to actually regulate direct miner-to-people trades for USD? For example, people selling Bitcoins on localbitcoins.com?
My thoughts: 1) In "real world" terms, it means the feds will scrutinize heavily any "legitimate and regulated US based financial institution" that has anything to do with BitCoin. They are making this crystal clear. For example, a ton of people upload USD to Mt. Gox with Dwolla. Dwolla is only able to operate using a partnering bank/credit union within the United States to process its ACH payments. All banks in this country are regulated by the feds in several ways, e.g. FDIC, Comptroller of Currency, Treasury, etc. Now NACHA (run by US gov), handles all check processing (a.k.a. ACH transactions) through the Federal Reserve (approx. 21 trillion in payments anually). Dwolla has no other mechanism of exchange with US citizens other than through the good graces of our lovely US govt. They will want to keep that key relationship. The new FinCEN guidelines are saying, in my opinion, that Dwolla is going to have to act as a barrier to money laundering somehow, and not just through their partnering bank (Dwolla is not wanting to admit this right about now). Moreover, their partnering bank might catch heat in being partnered with them. Dwolla could conceivably have to consider discontinuing it's relationship with Mt. Gox, perhaps by order of their partnering bank, as a possible senario, unless they make dramatic changes to the way they screen money going in and out. Dwolla will need to invest heavily in compliance at this point to keep everyone happy. They may reduce amounts uploadable to Mt. Gox or in general as a precaution, so they don't trip the thresholds for further monitoring of customer-based transactions. At any rate, I sure would hate to lose the ability to upload my funds using Dwolla. It is a very well conceived portal and works nicely for me when buying BTC on Mt. Gox, so a ton of people would be disappointed to see a bottleneck form there. I could go on and on about the big players emerging and how much of a burden this could place on them as fairly early startups, i.e. such as Coinbase, Coinlab, etc. They all have to take big notice of this new info right now. 2) I think it's 100 bucks or something, but that's not the challenge. A new MSB or money transmitter, once registered must institute major changes (expensive ones) to the way they do business. They must have things like independent audits, robust interdiction software protocols (usually custom made), and additional staff to manage reporting requirements. 3) You have this one backwards. The exchanges that interface with major US institutions are the only ones they can really do anything about and they know it. The miners selling directly to others will be much safer in my opinion. Much safer. 4)Practically impossible to regulate direct miner-to-people transactions...This is why we have all fallen in love with Bitcoins in the first place right? ;^) Thanks for taking the time to answer these in detail. Cheers!  |
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1) Aside from US-based exchanges (and international exchanges dealing in USD) having to register as Money Transmitters, what are the other real-world implications of the new FinCEN regulations?
2) How much does registering as a Money Transmitter actually cost?
3) The way I understand what is written in the FinCEN statement, miners who sell directly to other people would have to be registered Money Transmitters, but miners who sell to other people through an exchange would not (since the exchange is already acting as the Money Transmitter in that case). Is this true?
4) How feasible would it be for the government to actually regulate direct miner-to-people trades for USD? For example, people selling Bitcoins on localbitcoins.com?
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A couple of questions. You're talking about offering a "product" to "accredited investors". Does this mean you're adopting the stance that Bitcoin is a security?
Also, it might be worth outlining here the process customers will need to go through to verify that they meet the "accredited investor" criteria.
As USD MtGox codes can't be generated after April, will you be accepting MtGox codes for other currencies as long as their value is over USD 5,000?
This is the criteria to meet: 1. a bank, insurance company, registered investment company, business development company, or small business investment company;
2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
3. a charitable organization, corporation, or partnership with assets exceeding $5 million;
4. a director, executive officer, or general partner of the company selling the securities;
5. a business in which all the equity owners are accredited investors;
6. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
7. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes. Basically, only open to rich people? The U.S. has different roles for accredited investors (rich people). I don't like it but the lawyers are saying at this point we need to do it this way. We're working on an alternative and will announce that as soon as we have it ready. To be quite honest, I don't see this as a bad thing. It'll make it, at least initially, a much more serious platform for investors with big money. It'll draw interest from them since it is catered to them. We already have plenty of exchanges to trade small amounts of money on. Big players don't really have anyplace to call home (currently). I think the biggest problem you will have is providing liquidity for those big players. Who is going to sell to them? Perhaps other exchanges? One of the few "Bitcoin millionaires" around? |
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