Bitcoin Rally - Bill in Congress to treat Bitcoin as Currency

[jl2012]

So you just need a digital wallet to help you do all the accounting behind the scene, and generate a report for you at the end of the tax year

"just"

I love that optimism We barely have wallets that don't randomly destroy your money or run on iOS...

Yes, just

IRS has nothing to do with insecure wallet or Apple policy, right?

[ArticMine]

Here is the actual bill. http://www.scribd.com/doc/217067121/Virtual-Currency-Tax-Reform-Act

It does not levy any kind of sales taxes on Bitcoin. What is does do is treat Bitcoin as currency for tax purposes and this has two implications.
1) A $200 per transaction exemption for "personal transactions"
2) A higher tax rate equal to that of currency transactions.
http://www.law.cornell.edu/uscode/text/26/988

The net effect of this is to encourage the use of Bitcoin for day to day transactions by eliminating the bookkeeping burden for small transactions while increasing the tax burden of those using Bitcoin as an instrument for speculation.

For governments to treat Bitcoin as currency simply makes a lot of sense and consequently this bill in on the right track.

[YipYip]

Here is the actual bill. http://www.scribd.com/doc/217067121/Virtual-Currency-Tax-Reform-Act

It does not levy any kind of sales taxes on Bitcoin. What is does do is treat Bitcoin as currency for tax purposes and this has two implications.
1) A $200 per transaction exemption for "personal transactions"
2) A higher tax rate equal to that of currency transactions.
http://www.law.cornell.edu/uscode/text/26/988

The net effect of this is to encourage the use of Bitcoin for day to day transactions by eliminating the bookkeeping burden for small transactions while increasing the tax burden of those using Bitcoin as an instrument for speculation.

For governments to treat Bitcoin as currency simply makes a lot of sense and consequently this bill in on the right track.

Agreed ....lets look at the bigger picture ..Is this good for crypto ..I think its a Yes

[anu]

That would be FAR worse, for me at least.  I plan on retiring and paying 0% taxes!  How can I do that if they class it as a currency?

The secret is not to live in the country you are citizen of. In case you are US citizen, you are f***ed.

[xDan]

So you just need a digital wallet to help you do all the accounting behind the scene, and generate a report for you at the end of the tax year

"just"

I love that optimism We barely have wallets that don't randomly destroy your money or run on iOS...

Yes, just

IRS has nothing to do with insecure wallet or Apple policy, right?

Uh, sure... IRS has nothing to do with this.

Bolting complex accounting features on to existing apps, on the other hand, does.

[siggy]

Here is the actual bill. http://www.scribd.com/doc/217067121/Virtual-Currency-Tax-Reform-Act

It does not levy any kind of sales taxes on Bitcoin. What is does do is treat Bitcoin as currency for tax purposes and this has two implications.
1) A $200 per transaction exemption for "personal transactions"
2) A higher tax rate equal to that of currency transactions.
http://www.law.cornell.edu/uscode/text/26/988

The net effect of this is to encourage the use of Bitcoin for day to day transactions by eliminating the bookkeeping burden for small transactions while increasing the tax burden of those using Bitcoin as an instrument for speculation.

For governments to treat Bitcoin as currency simply makes a lot of sense and consequently this bill in on the right track.

OK.. so I'm now somewhat on the fence...   Did some research and confirmed the 200 exemption...  Unfortunately as far as I can tell it has stayed 200 since inception in 1997 and is not being indexed for inflation.  In today's world, it is really easy to rack up a $200 bill, so the majority of people are still going to have to track at least some of their transactions.  I still see a need for tracking to be integrated into wallets.  ( Also, coin control becomes even more important..  use the "high gain" coins for <$200 transactions, and use the "low gain" coins for >$200 )

So, as wallet tracking integration is still needed either way, we can remove that from the equation. 

It all boils down to:  capital gains (lower) tax rate on all transactions vs. standard income (higher) tax rates on just the bigger transactions.   Either way some people win, some lose.  I can't at this time say which method results in more people winning.

Sigg

[jl2012]

So you just need a digital wallet to help you do all the accounting behind the scene, and generate a report for you at the end of the tax year

"just"

I love that optimism We barely have wallets that don't randomly destroy your money or run on iOS...

Yes, just

IRS has nothing to do with insecure wallet or Apple policy, right?

Uh, sure... IRS has nothing to do with this.

Bolting complex accounting features on to existing apps, on the other hand, does.

I'd say it is very simple. As all bitcoin transactions are timestamped on the blockchain, a software can trace all your addresses in the past year, match with the bitcoin price record, and calculate your capital gain/loss for each time you buy a cup of coffee. For the user, it literally requires only one click to generate the report.

[rogerwilco]

That would be FAR worse, for me at least.  I plan on retiring and paying 0% taxes!  How can I do that if they class it as a currency?

That's very smart of you! Are you from US? If so, not paying your taxes is. Ot only a crime, but it is what SCUMBAGS DO! If you love your country, then don't we need money for schools? What about the road your car drives on? Or bridges? How about parks? He'll...what about that Submarine currently looking for the MH370 plane?

Listen, paying taxes suck! But it is necessary in modern societies. You can debate all you want how crooked politicians waste our tax income, or how taxes are too high...but one thing you SHOULD NOT DO IS NOT PAY YOUR TAXES! That is one of the dumbest AND least patriotic things you can do!  If you love your country, then you must pay your taxes. Period.

This silly superstition that a single, special, flag-wavy institution has an exemption from morality will by its very nature lead to catastrophic results every time. You were possibly made ignorant of how taxes really work thanks to those very same public schools you so dearly value. However, the current corrupt system is not a fluke. It is the nature of the beast.

[Mythul]

This looks like good news. I think finally the bear market is over after months of pain.

[lv0]

Who cares what congress does? Worst criminal terrorists in the world.
Always remember - you can't trust the goverment at all and anything they try to do with bitcoin will be for their own benefit.
Fuck the feds, fuck the irs, fuck the entire united states. 

[akujin]

A bill needs to be approved first before it becomes a law? Right?
So it's still possible that the bill would get rejected??