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1  Other / Beginners & Help / Tax on alternate currencies on: June 12, 2011, 04:41:43 AM
Barter is exempt from tax, but when you use government sanctioned FRN's you are taxed.  What about Bitcoins? Where do they fall under?   

The tax man is so hungry for the fruit of your labor he considers adding a value tax to barter situations.  Bitcoins could be seen as a way to avoid tax for consumer transactions, TPTB will stop at nothing to glean their unearned share.

"Alternative currency is a term that refers to any currency used as an alternative to the dominant national or multinational currency systems (usually referred to as national or fiat money). Alternative currencies can be created by an individual, corporation, or organization, they can be created by national, state, or local governments, or they can arise naturally as people begin to use a certain commodity as a currency. Mutual credit is a form of alternative currency, and thus any form of lending that does not go through the banking system can be considered a form of alternative currency."

"Often there are issues related to paying tax. Some alternative currencies are considered tax-exempt, but most of them are fully taxed as if they were national currency, with the caveat that the tax must be paid in the national currency. The legality and tax-status of alternative currencies varies widely from country to country; some systems in use in some countries would be illegal in others."       
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