viking02 (OP)
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December 15, 2014, 10:01:17 PM |
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I'm an american and an online poker player that relocated outside the usa. We have to pay taxes on your winnings when we file since its our job. I wanted to buy some bitcoins b/c i wanted a way to deposit bigger amounts into sportsbooks... heritage sportsbook and 5dimes sportsbook. I figured this was a good way to do this as 5dimes i could deposit up to 25k and heritage with 10k.
I was going to create a coinbase and blockchain acct then link coinbase to my american checking bank account and then buy bitcoin then once i have it, send it to blockchain then send it to heritagesportsbook and 5dimes. I was going to buy $1000 first just to test it out, then $5000. I read few is 1 percent or so and 0.15 so $1000 bitcoin cost me $1010.15 and $5000 would cost me $5050.15. I however read that with bitcoin you are suppose to pay taxes on it. I never invested in stocks or anything like that but i know ppl who buy stocks such as buy low then sell high, you are profiting and have to pay taxes on it. The thing for me though is i only need the bitcoin so i could deposit it into the sportsbook. Im not buying bitcoin to invest etc. Basically once i have the bitcoin, i want to deposit it asap into the sportsbook. The thing is those sportsbooks convert it immediately to usd. I prefer that since i dont want to bet in bitcoinsportsbook such as 1 btc might be 350 one day, then others 375 etc. So i want to bet flat amount and its easier with usd.
I was told b/c im sending bitcoin to a sportsbook and it converts into usd... im actually selling bitcoin. Is this true? Does that mean i have to pay tax on it the moment it convert into usd in my sportsbook acct? Example if i bought 5000 dollars worth of bitcoin and send it to blockchain then to heritage sports, i know it wont shows exactly $5000 in my heritage acct b/c bitcoin prices change a lot. So it might be $4950, might be $5020 etc. Thats true right? So if thats the case and true, then say i have just a small 3 dollar profit.... does that mean i have to pay tax on it? I pay taxes for poker and sportsbetting but the thing is this is just a small conversion and im not even withdrawing it yet... b/c if i withdraw it... assumign its in bitcoin, then the same 5003 dollar when i withdraw it to my bitcoin wallet might be a bit less than that.
I file my taxes for online poker winnings and sportsbetting if any... but are little thigns like this going to be a huge problem though? Are bitcoin buying and converting recorded? Thus the last thign i want is to have my taxes reported with my acct for my poker winnings... then later on i found out i had some 3 dollar profit on bitcoin that i have some minor issue with my taxes that i didnt know about if thats true. read that if you don't convert your bitcoin to your bank acct, then you dont' have to report it. Is that true? I read bitcoin deals with capital gains so does that mean unless i withdraw it back to usd, then i dont? The thing here with gambling taxes is it doesn't matter if you withdrew or not. Example say for the year i was up 60k. I only withdrew 25k. On my taxes, i have to report 60k, not 25k even though 25k is all i withdraw.
What really confuses me is i hear bitcoin is anonymous so if thats the case, if you converting it to sportsbook usd as you need it as a way to deposit funds into a sportsbook, would this be an issue at all. I know for ppl who are buying it for investment etc, then its different but im basically wanting it as a way to get bigger amount to deposit into a sportsbook. I could only deposit 1k max with my options in the usa at the moment. Anyone can tell me if i will have an issue with bitcoin and taxes in my case? When i first heard these 2 sportsbook accept bitcoin, my first thought was great i could get more money into a book. The thing is if i do say a bank wire or cashier check from my checking acct to it, then obviously its similar but bitcoin seem to be fast and easy so thats why i wanted to use it just buy it and use it until i read theres some tax issues. I mean... if you convert it to usd and it shows 3 dollar profit, is it recorded? Obviously for bigger amounts its important but i wanted to know like really small to almost same amounts. I just didnt know that using it to deposit into a sportsbook counts as selling it as im basically converting. I asked this in another forum and someone said its very complicated which is why i dont even want to deal with bitcoin.
Just curious if someone were to have really small capital gains like even $1, do you have to report it? Because the way i do cashier check and bank wire, i dont have to do anything additinonal with my taxes with my accountant so just wondering my bitcoin will make thigns more complicated. Again i probably just buy bitcoin few times and just deposit it asap to the sportsbook. As for withdrawing, i woudl either withdraw by check/bank wire. I might withdraw bitcoin but i think that might cause more issue which i dont want.
Would like someones opinion on this especailly if someone here who plays poker or bet sports for a living or even someone that trade bitcoin for a living though i think i want the answer from someone who uses bitcoin in poker/sports could tell me if just using it for depositing into sportsbook is going to cause much hassle.
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,,,,╓╖µpp╖╖,,,, ,╓g▄▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▄µ╖ ,╖ ,╓@▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓Ñ╖ ,@▓▌ ,á▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▀▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓µ╫▓▓▓▌ ╓@▓▓▓▓▓▓▓▓▓█▓▀╜╙ '╙▀▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▌ ╓▓▓▓▓▓▓▓▓█▓▀` ╙▀▓▓▓███████▌ @▓▓▓▓▓▓▓█▀` ,,,,, ,g▓███████▀` ╓▓▓▓▓▓▓██▀ ,µ▄▓▓▓▓▓▓▓█▓▓▓▄@, ,@▓███████▀ ]▓▓▓▓███▓` ╓▄▓█▓▓▓▓▓▓▓▓▓▓▓█████████████▓╜ ]▓▓▓▓█▓█╝ ╓▓█████▓▓▓▓▓▓▓▓▓████████████▀╜ ▓▓▓▓███▌ ╙▓███████▓▒ "▀▓██████▀` ╫▓▓▓███▌ "▀████████▄ '▓██▀ ▓█▓███▓▒ `▀████████▄, ` ]▓█████▌ ╙████████▓, ]▓█████▌ ╙▓█▓█▓▓▓█▓╖ ]▓█████▌ ╙▀█▓▓▓▓▓▓▓╖ ▓█████▓[ ,, `▀▓▓▓▓▓▓▓▓▄ ▓██████[ ╓@ ╙▓▓▓▓▓▓▓▓▓╖ ╠██████▓ ╓▓▓▓▓m ╙▓█▓▓▓▓▓█▓@ ▓█████╜ ,g▓▓▓▓▓▓▓▓▓▄╖╖,,,╓╖▓▓██▓▓▓▓▓▓ └▓█▓╜ ,@▓▓▓▓▓▓▓▓▓▓▓▓████████████▓▓█▀ '" ╓@▓▓▓▓▓▓▓▓▀▓▓▓▓█████████████▀╙ , ╓▓▓▓▓▓▓▓▓▓╜ ╙▀▀▀▀▓▓▓▀▀▀▀╜ ╓▓▓▓╖ g▓█▓▓▓▓▓▓▓` ,g▓▓▓▓▓▓▓w ,g▓██████████▓▄, ,╓@▓▓█▓▓▓█▓██╜ ▓████████████████▓▄▄p╖,, ,,╓µ▄▄▓██████████▓╜ ▓█████╜╙▀███████████████████████████████████▀` ▓██▓╜ "▀▀███████████████████████████▀╜` ▓▀` ╙▀▀▀███████████████▀▀▀" | . COMSA ICO: Oct 2 - Nov 6 | █████ ▄▄▄ ███ ███ ▀▀▀ ███ ███ ███ ▀▀▀ ███ ███ ███ █████ | | █████ ▄▄▄▄▄ █████ █████ ▀▀▀▀▀ █████ █████ █████ ▀▀▀▀▀ █████ █████ █████ █████ |
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rapta
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December 15, 2014, 10:46:56 PM |
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How would this be any different than buying and selling say litecoin on btc-e for USD, over and over?
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viking02 (OP)
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December 15, 2014, 11:19:58 PM |
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Are you asking me or you just asking this in general? Because i have no idea what you are asking. Basically i just want to know if theres issues with buying bitcoin solely for depositing into sportsbook without an issue. I can do this also with cashier check or bank wire but i read bitcoin very easy to do which is why i have lot of these questions.
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,,,,╓╖µpp╖╖,,,, ,╓g▄▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▄µ╖ ,╖ ,╓@▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓Ñ╖ ,@▓▌ ,á▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▀▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓µ╫▓▓▓▌ ╓@▓▓▓▓▓▓▓▓▓█▓▀╜╙ '╙▀▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▌ ╓▓▓▓▓▓▓▓▓█▓▀` ╙▀▓▓▓███████▌ @▓▓▓▓▓▓▓█▀` ,,,,, ,g▓███████▀` ╓▓▓▓▓▓▓██▀ ,µ▄▓▓▓▓▓▓▓█▓▓▓▄@, ,@▓███████▀ ]▓▓▓▓███▓` ╓▄▓█▓▓▓▓▓▓▓▓▓▓▓█████████████▓╜ ]▓▓▓▓█▓█╝ ╓▓█████▓▓▓▓▓▓▓▓▓████████████▀╜ ▓▓▓▓███▌ ╙▓███████▓▒ "▀▓██████▀` ╫▓▓▓███▌ "▀████████▄ '▓██▀ ▓█▓███▓▒ `▀████████▄, ` ]▓█████▌ ╙████████▓, ]▓█████▌ ╙▓█▓█▓▓▓█▓╖ ]▓█████▌ ╙▀█▓▓▓▓▓▓▓╖ ▓█████▓[ ,, `▀▓▓▓▓▓▓▓▓▄ ▓██████[ ╓@ ╙▓▓▓▓▓▓▓▓▓╖ ╠██████▓ ╓▓▓▓▓m ╙▓█▓▓▓▓▓█▓@ ▓█████╜ ,g▓▓▓▓▓▓▓▓▓▄╖╖,,,╓╖▓▓██▓▓▓▓▓▓ └▓█▓╜ ,@▓▓▓▓▓▓▓▓▓▓▓▓████████████▓▓█▀ '" ╓@▓▓▓▓▓▓▓▓▀▓▓▓▓█████████████▀╙ , ╓▓▓▓▓▓▓▓▓▓╜ ╙▀▀▀▀▓▓▓▀▀▀▀╜ ╓▓▓▓╖ g▓█▓▓▓▓▓▓▓` ,g▓▓▓▓▓▓▓w ,g▓██████████▓▄, ,╓@▓▓█▓▓▓█▓██╜ ▓████████████████▓▄▄p╖,, ,,╓µ▄▄▓██████████▓╜ ▓█████╜╙▀███████████████████████████████████▀` ▓██▓╜ "▀▀███████████████████████████▀╜` ▓▀` ╙▀▀▀███████████████▀▀▀" | . COMSA ICO: Oct 2 - Nov 6 | █████ ▄▄▄ ███ ███ ▀▀▀ ███ ███ ███ ▀▀▀ ███ ███ ███ █████ | | █████ ▄▄▄▄▄ █████ █████ ▀▀▀▀▀ █████ █████ █████ ▀▀▀▀▀ █████ █████ █████ █████ |
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Foxpup
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December 16, 2014, 03:21:55 AM |
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Hi! Bitcoin trader from Australia here, and although my situation is different from yours, I can answer some of your questions. I was told b/c im sending bitcoin to a sportsbook and it converts into usd... im actually selling bitcoin. Is this true? Does that mean i have to pay tax on it the moment it convert into usd in my sportsbook acct?
Yes, you are selling bitcoin, and yes, you may have a capital gains tax liability as a result. Example if i bought 5000 dollars worth of bitcoin and send it to blockchain then to heritage sports, i know it wont shows exactly $5000 in my heritage acct b/c bitcoin prices change a lot. So it might be $4950, might be $5020 etc. Thats true right?
Right, and the difference is taxable income. In your example, if you get $5020, you would owe capital gains tax on the $20 profit. If you get $4950, you have a $50 capital loss which may (I'm not sure how it works in the U.S.) be tax deductible. So if thats the case and true, then say i have just a small 3 dollar profit.... does that mean i have to pay tax on it? I pay taxes for poker and sportsbetting but the thing is this is just a small conversion and im not even withdrawing it yet... b/c if i withdraw it... assumign its in bitcoin, then the same 5003 dollar when i withdraw it to my bitcoin wallet might be a bit less than that.
There is no tax liability incurred when converting dollars to bitcoins, however you must record the value so you can work out your net capital gain/loss when you later sell/trade them. I file my taxes for online poker winnings and sportsbetting if any... but are little thigns like this going to be a huge problem though?
Not really. Capital gains tax is not as difficult as some people say it is, provided you keep careful records of each transaction. Your accountant can help you here. Are bitcoin buying and converting recorded?
Yes. Although exchanges and similar institutions don't report directly to the IRS, the IRS could subpoena their records if you get audited. Thus the last thign i want is to have my taxes reported with my acct for my poker winnings... then later on i found out i had some 3 dollar profit on bitcoin that i have some minor issue with my taxes that i didnt know about if thats true.
That's not generally a problem. If the IRS discovers a minor issue with your taxes, they'll usually just send you an amended assessment. Only for major inconsistencies or outright fraud do the big penalties come into play. read that if you don't convert your bitcoin to your bank acct, then you dont' have to report it. Is that true?
No. You're perhaps less likely to be caught if you don't, just as if you get paid in cash instead of directly to your bank account, but you still have to be report it either way. I read bitcoin deals with capital gains so does that mean unless i withdraw it back to usd, then i dont? The thing here with gambling taxes is it doesn't matter if you withdrew or not. Example say for the year i was up 60k. I only withdrew 25k. On my taxes, i have to report 60k, not 25k even though 25k is all i withdraw.
Be careful with your terms. "Withdrawing" bitcoin means taking bitcoins from one institution and depositing them somewhere else (without converting them to dollars). This is of absolutely no relevance to your tax situation. If, on the other hand, you are converting bitcoins to dollars, you are actually selling them, and you have a tax liability if you sell them for more than what you bought them for, the same as if you'd sold anything else for profit. You only owe capital gains tax on what you actually sell. Just curious if someone were to have really small capital gains like even $1, do you have to report it?
There may be reporting exemptions for small transactions, I'm not sure. Ask your accountant.
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Will pretend to do unspeakable things (while actually eating a taco) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4I am not on the scammers' paradise known as Telegram! Do not believe anyone claiming to be me off-forum without a signed message from the above address! Accept no excuses and make no exceptions!
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viking02 (OP)
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December 16, 2014, 03:35:48 AM |
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Thanks for that information. However, it been really good if u were form the usa as im sure the taxes are different in our countries.
Is anyone here from the usa can answer these questions, would appreciate it.
Are they strict about
Capital gains tax is not as difficult as some people say it is, provided you keep careful records of each transaction?
You telling me if you do 20 tranactions where each transaction was for less than 50 cents just to take it to the extreme, that has to be recorded as well?
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,,,,╓╖µpp╖╖,,,, ,╓g▄▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▄µ╖ ,╖ ,╓@▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓Ñ╖ ,@▓▌ ,á▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▀▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓µ╫▓▓▓▌ ╓@▓▓▓▓▓▓▓▓▓█▓▀╜╙ '╙▀▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▌ ╓▓▓▓▓▓▓▓▓█▓▀` ╙▀▓▓▓███████▌ @▓▓▓▓▓▓▓█▀` ,,,,, ,g▓███████▀` ╓▓▓▓▓▓▓██▀ ,µ▄▓▓▓▓▓▓▓█▓▓▓▄@, ,@▓███████▀ ]▓▓▓▓███▓` ╓▄▓█▓▓▓▓▓▓▓▓▓▓▓█████████████▓╜ ]▓▓▓▓█▓█╝ ╓▓█████▓▓▓▓▓▓▓▓▓████████████▀╜ ▓▓▓▓███▌ ╙▓███████▓▒ "▀▓██████▀` ╫▓▓▓███▌ "▀████████▄ '▓██▀ ▓█▓███▓▒ `▀████████▄, ` ]▓█████▌ ╙████████▓, ]▓█████▌ ╙▓█▓█▓▓▓█▓╖ ]▓█████▌ ╙▀█▓▓▓▓▓▓▓╖ ▓█████▓[ ,, `▀▓▓▓▓▓▓▓▓▄ ▓██████[ ╓@ ╙▓▓▓▓▓▓▓▓▓╖ ╠██████▓ ╓▓▓▓▓m ╙▓█▓▓▓▓▓█▓@ ▓█████╜ ,g▓▓▓▓▓▓▓▓▓▄╖╖,,,╓╖▓▓██▓▓▓▓▓▓ └▓█▓╜ ,@▓▓▓▓▓▓▓▓▓▓▓▓████████████▓▓█▀ '" ╓@▓▓▓▓▓▓▓▓▀▓▓▓▓█████████████▀╙ , ╓▓▓▓▓▓▓▓▓▓╜ ╙▀▀▀▀▓▓▓▀▀▀▀╜ ╓▓▓▓╖ g▓█▓▓▓▓▓▓▓` ,g▓▓▓▓▓▓▓w ,g▓██████████▓▄, ,╓@▓▓█▓▓▓█▓██╜ ▓████████████████▓▄▄p╖,, ,,╓µ▄▄▓██████████▓╜ ▓█████╜╙▀███████████████████████████████████▀` ▓██▓╜ "▀▀███████████████████████████▀╜` ▓▀` ╙▀▀▀███████████████▀▀▀" | . COMSA ICO: Oct 2 - Nov 6 | █████ ▄▄▄ ███ ███ ▀▀▀ ███ ███ ███ ▀▀▀ ███ ███ ███ █████ | | █████ ▄▄▄▄▄ █████ █████ ▀▀▀▀▀ █████ █████ █████ ▀▀▀▀▀ █████ █████ █████ █████ |
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Foxpup
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December 16, 2014, 03:55:08 AM |
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Are they strict about
Capital gains tax is not as difficult as some people say it is, provided you keep careful records of each transaction?
They don't care about your recordkeeping at all. You just work out your total capital gain/loss and write that figure in the appropriate place on your tax return. Having good records just makes it easier to calculate that figure, and demonstrate that you have calculated it correctly in the event of an audit. (Certainly your accountant is going to have a fit if you ask them to work out your capital gains when you haven't been recording your transactions.)
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Will pretend to do unspeakable things (while actually eating a taco) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4I am not on the scammers' paradise known as Telegram! Do not believe anyone claiming to be me off-forum without a signed message from the above address! Accept no excuses and make no exceptions!
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viking02 (OP)
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December 16, 2014, 05:54:15 AM |
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yea that is what i was thinking. I meant the net is all that i care about.
Any usa ppl can add to this or give their opinion?
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The00Dustin
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December 16, 2014, 10:58:37 AM Last edit: December 16, 2014, 11:40:27 AM by The00Dustin |
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I am not an accountant, and I am not providing financial advice. That having been said, in my personal opinion, from a fear of auditing standpoint, I would expect better records and clearer filings to be better for you (both in avoiding an audit and in surviving one if it isn't avoided).
That having been said, presumably you use a personal tax program to file your taxes, and if so, capital gains and losses are pretty easy to enter into the program. You enter form 8949 records with the following info (from the 2013 IRS form): Part (there is a Part I for short term and a Part II for long term) Transaction type (A, B, or C, a separate form is required for each type of gain and loss) Description of property (Example: 100 sh. XYZ Co.) Date acquired Date sold or disposed Proceeds (sales price) (see instructions) Cost or other basis. See ... Adjustment, if any, to gain or loss. If... Gain or (loss) ...
That having been said, here is an example of a trade that could happen that this form was designed for (dates and prices not validated): You have a brokerage account that you must deposit to with a cashiers check (not sure such a thing exists) You deposit 50000 USD using a cashiers check that cost you 20 USD You buy 100 shares of AAPL for 40000 USD on 2013-05-27 and pay a 5 USD commission You sell 100 shares of AAPL for 50000 USD on 2014-08-31 and pay a 5 USD commission You pay the broker 20 USD to send you a check to withdraw your 59990 USD (netting a 59970 USD check) Your broker sends you a 1099-B at the end of the year that you can use to fill out the 8949
In that scenario, here is what I THINK the broker's 1099-B would have on it: Part II Transaction type: A Description: 100 shares of AAPL Date acquired: 2013-05-27 Date sold: 2014-08-31 Proceeds: 49995 (the 5 USD commission is netted out of the proceeds) Cost: 40005 (the 5 USD commission is netted into the cost) Adjustment if any: none Gain: 9990 (the cost of sending the money in and out was not a capital expense, so that 40 isn't shown here)
This is a very simple example, you could have bought 100 shares and sold 50 shares twice, then there would be two separate entries for 50 shares. You also could have bought 50 shares twice and then sold 100 shares all at once. Again, there would be two separate entries for 50 shares. If you bought 25 shares twice, then bought 50 shares, then sold 50 shares, and then sold 25 shares twice, and operating under the assumption that you were using the FIFO method of accounting, there would be 4 records for 25 shares. There isn't a broker keeping records like this for bitcoin transactions (brokers didn't keep records like this for stock until a couple years ago), so you have to keep them yourself and figure out your lots yourself. A lot consists of all shares bought on one date for one price and sold on another date for another price (so there can be more than one lot on any given date, and any given lot can be split into multiple lots due to separate lots on the buy or sell date), and each lot must be tracked individually, but it doesn't sound like you'll have to worry too much about that since you'll be buying and selling all at once. For instance, based on my experience with 1099-B's vs my records and your example of your planned BTC use, if you bought 1.2345 BTC for $X, paid a .0001 transaction fee to send to the gambling site, and then sold the remaining 1.2344 BTC to the gambling site netting $Y, you would have one 1.2344 BTC lot with $Y proceeds and a cost basis of $X.
While some of the fields are pretty-much self explanatory, you will need to understand what does and does not affect the proceeds and the cost basis. You will also need to understand short term vs long term and how to deal with a wash sale when it comes to losses (which may require using the adjustment column). There may be more gotchas that you need to understand, and it would be wise to read the relevant IRS documents (start with document P505, use Google or search the IRS page, read the entire document and anything referenced that you aren't sure you understand fully). Basically, if you sell something for a loss and purchase the same type of thing within a certain time period, the loss can't be claimed and must be saved for your next transaction in certain circumstances. I would go into more detail, but would prefer to avoid liability for doing so. Realistically, given your particular trading behavior, I would say it would be best to talk to an accountant about wash sale rules, because it might turn out you always have losses, can never claim them, but have to report them anyway to keep yourself in the clear. It might also be wise to talk to an accountant about transaction fees as well.
Technically, it would be wise to talk to an accountant about the entire process since I am not providing financial advice (nor am I qualified to do so). However, perhaps you will find the examples I provided comforting (or eye-opening) and perhaps the document I referenced can answer at least some of your questions and reduce any potential accountant's bill.
ETA: I also don't know how living outside of the country would affect you, but from most of the news I have seen, it makes your tax and financial reporting much more complicated and burdensome (with FATCA and FBARs and all that good stuff). Since I have never dealt with any of that, I can't even relay personal experience on it. I am also not providing legal advice, and I have no knowledge regarding the legality of your online gambling in general.
Final EDIT: My entire post is based on capital assets in general, which you specifically asked about. It is my understanding that bitcoin is to be treated as a capital asset based on IRS notice 2014-21, but you should reference that and any subsequent (or future) relevant notices (or laws) with your accountant to determine whether or not bitcoin should actually be treated as a capital asset when filing taxes.
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charliemaggot
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December 17, 2014, 12:41:03 AM |
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I was told b/c im sending bitcoin to a sportsbook and it converts into usd... im actually selling bitcoin. Is this true? Does that mean i have to pay tax on it the moment it convert into usd in my sportsbook acct? Bitcoin is taxed as property, and treated as a capital asset, so yes, whenever you sell or exchange property you have a tax event. You don't pay taxes the moment it is converted, but you need to record any potential gains (or losses), so they can be included in your 1040 Schedule D for your tax year. Example if i bought 5000 dollars worth of bitcoin You bought x BTC for $5k. and send it to blockchain then to heritage sports You "sold" x BTC for ~$5k. The difference less any trading fees is your gain. This is more than likely going to be a loss anyway, because of the difference in buy and sell prices as well as fees. You can get a tax benefit from losses, you still worth recording. then say i have just a small 3 dollar profit.... does that mean i have to pay tax on it?. There are no limits for capital gains, with the exception that since figures are rounded to the nearest dollar on your tax forms, any gains less than $0.50 can be ignored. im not even withdrawing it yet... b/c if i withdraw it... assumign its in bitcoin, then the same 5003 dollar when i withdraw it to my bitcoin wallet might be a bit less than that. Doesn't matter. If you are having it converted to USD (or anything else) it is still as tax event. Are bitcoin buying and converting recorded? Thus the last thign i want is to have my taxes reported with my acct for my poker winnings... then later on i found out i had some 3 dollar profit on bitcoin that i have some minor issue with my taxes that i didnt know about if thats true. First, the US tax is an honor system. You report what you owe. If, if, you are audited, the IRS may well investigate based on your earning or bank accounts not matching your income. Bitcoin buying/selling isn't reported to the IRS by anyone yet, as far we we know. It isn't like stocks. Nonetheless, you should report any gains, since it isn't difficult and if you are in a high-risk category of being audited, you won't have to worry about it. However, sounds like you are going to have a loss anyway, in which case you won't have underpayed taxes so have no problems. read that if you don't convert your bitcoin to your bank acct, then you dont' have to report it. Is that true? No. Any asset exchange is a tax event, or anywhere where the funds are in your control. I read bitcoin deals with capital gains so does that mean unless i withdraw it back to usd, then i dont? The thing here with gambling taxes is it doesn't matter if you withdrew or not. Example say for the year i was up 60k. I only withdrew 25k. On my taxes, i have to report 60k, not 25k even though 25k is all i withdraw. Yes, capital gains only get calculated when you sell or spend those Bitcoins. Holding on to them has no tax effect. What really confuses me is i hear bitcoin is anonymous so if thats the case.... Anonominty is irrelevant. Cash is anonymous. Tax reporting is up to you. Just curious if someone were to have really small capital gains like even $1, do you have to report it? Legally, yes. But say you didn't. First, you have to get picked and be audited. They have to find that unpaid tax gain. You then owe $0.25 taxes. You'll have to pay it. You can use https://bitcointaxes.info to help work out any gains.
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The00Dustin
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December 17, 2014, 12:51:20 AM |
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You don't pay taxes the moment it is converted, but you need to record any potential gains (or losses), so they can be included in your 1040 Schedule D for your tax year. What really confuses me is i hear bitcoin is anonymous so if thats the case.... Anonominty is irrelevant. Cash is anonymous. Tax reporting is up to you. My post and this post discuss the same things. To be clear, Schedule D is populated based on Schedule(s) 8949, and I don't know whether or not Schedule(s) 8949 are actually required in filing, e-filing, or audits vs other clear records to populate Schedule D. Also, bitcoin is not anonymous, it is pseudonymous. Also, as all transactions are public, so depending on how you manage your bitcoin, it is theoretically possible to learn quite a bit about many of your transactions once even one of your addresses is known.
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AJinNYC
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Bored with you morons.
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December 17, 2014, 12:59:56 AM |
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Jeez... All of this tax crap is completely ridiculous... this bullshit just makes me hate the government more and more every day.
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Done with this forum. Goodbye all.
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