so i wanna know do i realy have to pay taxes on bitcoins and does my gov recognize bitcoins as my property and do i have to care about any legal action by gov on my bitcoin property ?
Here in the United States Bitcoin is classified as an “asset” meaning there are no taxes for receiving Bitcoin, however you are taxed when you exchange Bitcoin for USD.
Of course it varies from country to country, and OP didn’t state where he’s from.
you put in a way that to me sound like i can use bitcoin(not dumping for fiat first, just use it on various website) in USA to purchase what i want without paying anything is this correct?
if this is correct, the taxation of bitcoin can only do good and incentivate the usageof bitcoin, instead of relying on fiat all the time
Bitcoin is treated as a asset (like a stock)
for the purposes of taxation. What this means is that you must keep track of exactly how much you pay for every Bitcoin you purchase
in USD. This gives you the base cost of the Bitcoin
in USD. Then when you either sell the Bitcoin
or use it to purchase anything you must use the value received
in USD to calculate if you had a gain or a loss on the sale
or use or barter of the Bitcoins
in USD.
For example:
You purchased 100 Bitcoins a long time ago for $5 each.
Today you trade 50 of these Bitcoins for a car worth $50,000.
To calculate the tax you subtract the base cost from the value received:
The base cost to you of the 50 Bitcoins was $5 x 50 = $250.
The value received was $50,000.
So you would owe the capital gains tax on:
$50,000 - $250 = $49,750
This would obviously be a long term capital gain, which is taxed at a rate of 0%, 15%, 20% or 23.8% depending on your income and tax bracket. Assuming a tax rate of 15% the taxes you would owe on this transaction would be:
$49,750 x 15% = $7,462.50 (in USD, they do not accept Bitcoin for tax payments)
Many of you will not like what I just said. Whether you like it or not - however you personally
feel about Bitcoins, taxation of them etc. - that is the law
in the US. Failure to report and pay the taxes owed is punishable under the law. How you
feel about it is not material once you are arrested and facing fines, asset forfeiture, and prison.
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