H.R. 4602 (IH) - Virtual Currency Tax Reform Act

[row5_seat47]

http://www.gpo.gov/fdsys/pkg/BILLS-113hr4602ih/content-detail.html

[dmpotter]

I like the 5 year part.

[philipma1957]

Wonder if it passes>  Btw they need reform. So maybe this is it.

[dwolfman]

Hmm, strange to see a simple and no-nonsense bill in the US Congress.   

[FeedbackLoop]

Hmm, strange to see a simple and no-nonsense bill in the US Congress.  

Indeed, maybe they are trying to be in line with the recent push to make the US tax code a bit saner. Though with many things government, such push and this might be just for show...

[LostDutchman]

Hmm, strange to see a simple and no-nonsense bill in the US Congress.   

Congress does nothing in a simple and no-nonsense manner.

It's late here but I will get back to you on this one!

[The00Dustin]

Does the majority of the vocal portion of the bitcoin community seriously want to pay higher taxes, or are they just seriously clueless about how taxes work?!  I don't understand how anyone can think that a bill to legally classify bitcoin as a currency is a good thing.  You still have to keep track of USD value gains via purchases the same way you would if it is an asset.  There are two differences:  One is that you don't have to count the first $200, that sounds great, but in exchange for that benefit, two is that you lose long term capital gains and pay higher taxes unless you make less than $10,000 per year including the gains from bitcoin.  A common sense law would exclude bartering of assets worth less than $200 from capital gains tax, not treat an asset as a currency because users think they want it to be.  Hopefully, this bill shouldn't realistically be able to make its way through the system due to lack of support from lawmakers that don't care about bitcoin.

[The00Dustin]

More food for thought, if it is legally classified as a foreign currency, all of the currency reporting laws would apply in addition to the higher tax rates.  This would potentially allow the government to prosecute all sorts of people for failure to report and the penalties for failing to report are horrendous.  As long a your bitcoin are in a wallet on your PC, you might be fine, but the moment you send too many to an exchange that isn't US based at one time or in the course of one day, you would have to do massive amounts of paperwork to not be breaking the law.  Having a wallet stored in the cloud would be a grey area that could put a target on your back.

Take bitcoin out of the equation, if you have $10,001 in a Swiss bank, you have to do all sorts of paperwork because it's currency.  On the other hand, if you own a house in a foreign country (presumably a much greater value than $10,001), you own a house in a foreign country, it's just an asset, much less paperwork that doesn't have to be filed every year.

Now, here's even more to think about...  Who is contributing to Mr. Stockman?  Everyone threw a fit when Manchin wanted to ban bitcoin and immediately noticed that he gets a lot of money from a big bank.  I'm betting Mr. Stockman does as well.  I'm not saying he doesn't have good intentions, but with MasterCard hiring a number of lobbyists, it wouldn't be surprising at all for financial institutions to be attacking at other levels.  My personal opinion is that a bill like this (it uses the word moratorium, which sounds great, but in reality, it prevents capital gains tax from being collected on something that it aims to reclassify so that it is no longer a capital asset; it doesn't prevent income tax from being collected on that same something that is now classified as currency whose value fluctuations are now classified as income instead of capital gains) is only beneficial to those who want to destroy bitcoin.  I'm not even checking to see who his contributors/donators are, and I'm not screaming conspiracy, because this could just as easily be pure cluelessness or even simply political posturing.

[LostDutchman]

"The Internal Revenue Service shall treat virtual currencies as a
foreign currency for Federal tax purposes."

Oh, you like that one?

Think about it!

"SEC. 5. MORATORIUM.

            (1) For a period of five years following the date of the
        enactment of this Act, the Federal Government shall not impose,
        assess, collect, or attempt to collect capital gains tax on
        virtual currencies.
            (2) Nothing in this Act shall prevent, impair or impede the
        operation of any government agency, authority, or
        instrumentality, whether of the Federal Government or of any
        State or political subdivision thereof, to enforce currently
        existing criminal, civil, or taxation statutes and regulations.'

Uh, the rulings which have the force of law are already in place so this one is a great big fat Red Herring.

You are being hoodwinked into complacency.