It doesn't need to be interest bearing to incur a capital gain.  Zero sum is also irrelevant.  Options are zero sum and you need to pay gains on options.  It also does not have to be a tangible asset, capital gains must be paid on intangible assets (goodwill, patents, etc.).

If I'm not mistaken, anytime the amount realized on the disposition exceeds the purchase price, it's a capital gain.  

Edit:  To put it another way, if Bitcoin is a currency then like any other Forex trader, gains made would be taxable.

It's well known that Bitcoin is used as a currency for many illegal activities.  Before we go down that road, so are all other currencies but it got me thinking about other reasons why Bitcoin may be adopted by lets just say, less than honest individuals.

I read an article in Forbes recently that the wealthiest of the wealthy in the US make their income not off of wages, but off capital gains.  In other words, the rich get richer because they own "stuff" not because they're necessarily productive.  And capital gains are treated more favorable, taxwise, than ordinary income.

But what happens if you're able to eliminate capital gains tax altogether?  Is this where Bitcoin steps in?  A wealthy individual, private equity fund, whatever, comes in and purchases X Bitcoins at $10 and sells at $20.  The second those BTC's are converted back to fiat, the gain is taxable.  But who reports the gain to the IRS?  I don't think MtGox does.  And yeah MtGox =/= Bitcoin but they're the largest exchange so I'm just using them as an example.  Wouldn't it be fairly easy for someone to hide their capital gains this way? 

Now lets look at gambling.  If I go to Vegas and hit a jackpot, they gave me the cash on the spot but they also gave me a 1099.  If I were to win the same equivalent amount at say, SatoshiDice, there's no 1099.  Presumably because you're winning in BTC's but that's easily convertible back to fiat not to mention you're relatively anonymous so they wouldn't be able to identify you let alone know what country of origin you're from.  This may further expand as larger gambling operations come online and accept Bitcoin.

To be clear, I'm NOT advocating cheating on your taxes just as I wouldn't advocate buying on silk road, etc.  But the fact remains there are some who can and will do it.  The rich are always looking for tax loopholes.  Maybe they found one in BTC and it is helping propel its price.  Or maybe it's yet to be widely discovered and could potentially propel the price in the future.  Thoughts?

Which means it could still be confiscated by customs right?

Would you sell me a $50 Amazon gift card for 1 BTC?  If there's no reason to fix directly to the USD, lets make a deal.


For the most part you have to convert your bitcoin to fiat immediately.  As a business you still need to pay your suppliers, personnel expenses, utilities, etc.  Like it or not, this is overwhelmingly done in fiat.


Only if they have the luxury to hold the coin.  Most businesses need to use their cash flow to pay operating expenses, service their debt, etc. 

I'll do a review.

1GKv7EnAABx9wk1CnE6Xqa2rATm17JHtQS

Edit: Thought I had 500 posts, guess not.  Offer still stands if you want.

SELL! SELL! SELL!!!!

He has a margin account, it's just an extension of credit. 

See that's a lot more reasonable.  I don't know why they quote such absurd timelines, maybe just to cover their ass.  I may try a small amount wire and see if I get similar results as you. 

The reason I've never used it is MtGox says Int'l wires take 2-5 business days to reach them, which is just plain stupid.  Back in the day, Dwolla was fine to use so I never really explored anything else.  Looks like things have changed and maybe wire is the best method but I still can't believe a wire would take as much as 5 business days.  That's like sending a package overnight delivery and UPS coming back saying, "okay it should arrive sometime in the next week."  

Edit: Oh 2-5 business days to reach them PLUS up to another 24 hours to clear.  Absurd.

Tried to use Bitinstant and Dwolla would not allow the transfer until my photo ID is verified.  I think this will be the last time I use Dwolla esp with the apparent suspensions going on.

There's 1 person about 5 miles from me but he's asking for $22USD/BTC....

Thanks though, I think I have a number of options to look into.  Maybe once I accumulate enough I can sell locally and get some of those ridiculous spreads down.

Yeah that was my mistake, I had looked at Bitinstant about a week ago and was going off memory.  I had forgotten about the Walmart option. 

I was never insisting on using Dwolla or MtGox, nor did I say there is "no better way."  The whole point of the thread was looking for alternate options.  And thanks for the bitfloor suggestion.  I already use a few online checking accounts, I'm not sure if I want to set up another but if I do, I'll PM you.

Thanks for the suggestions, I figured there were other options out there just didn't know which were the best.  

As for the local exchange, I'll look into it, maybe I can start something going.

Thanks for the article.  Interesting.  Okay then we're back at square one.  What are the alternate options?

Yeah my shorts (actually put options) are paying off nicely.  I may cover soon, I know you're thinking in the $300s but I have to dig a little more as I'm not entirely convinced.  Hope to post something a little more in depth later. 

I dunno... Hulk Hogan is getting a little long in the tooth, not really sure how much help he'd be 

I looked at it but I don't really get how it speeds up the process.  In my case, I have funds in Dwolla that want to go to MtGox, how is their transfer faster?  Do I still need to wait until Dwolla verifies my photo ID?  The cash deposit to BTC looks interesting but it doesn't say what the exchange rate is and I honestly don't know how reputable these guys are.

Bear with me, I took about a year hiatus from Bitcoin so I'm probably a little unfamiliar with some of the changes but dear God the amount of hoops I have to jump through to get $$$ to Gox is ridiculous.

This has been my journey over the last few WEEKS.

1.  Already had an established Dwolla account linked to my bank from prior fundings to MtGox.
2.  Try to fund, MtGox says they need to verify me.  Send a picture ID and another form of verification.  Alright, anti-money laundering I get it, that's fine.  Send requested information.  About a week to week and a half later am finally verified.
3.  Start transfer from my bank to Dwolla on Jan 18th.  Funds will not clear until the 25th, SEVEN days later.  Okay there's a US holiday in there but still, way too long for an ACH.
4.  Finally today, weeks into the process, I'm ready to send funds to MtGox via Dwolla (which is giving me a disclaimer that it may take up to 24hrs to credit).  Oh nope sorry, now Dwolla needs a copy of my photo ID because the receiving party has requested it, blah blah blah.  Seriously?  I just spent over a week verifying myself with them and now I have to do it again?  Another 1-2 business days.

Please tell me there are better options.  I don't want to do an international wire due to the high fees.  I realize once I'm verified by everyone on the planet the process will be shorter but it's still going to take about a week between Dwolla releasing funds and then MtGox verifying.  I can't do the local bitcoins thing, no one in my area.  I also don't think I can do the option where you walk into select stores and pay via cash (none of the stores look familiar to me so I don't think there are any in the state).