bitinstant paycard

[genuise]

what personal information will you need to issue a card for a person?
photo of id? any AML requirement?

what exactly to expect?


sorry if it is answered somewhere else...

[barbarousrelic]

I predict that the release of this card will cause a short-term drop in the price of Bitcoin, as it now becomes far easier to convert Bitcoin to cash.

But because that addresses one reservation people have about getting into Bitcoin, this will lead to long-term price appreciation.


Will BitInstant issue 1099 tax forms for people who cash out Bitcoins with this card?

[BoardGameCoin]

interesting. the tax situation is complicated, because you need to know your cost basis in order to know what is capital gains income... and bitinstant wouldn't have that information. I'd imagine we'll be doing our taxes ourselves.

[RodeoX]

interesting. the tax situation is complicated, because you need to know your cost basis in order to know what is capital gains income... and bitinstant wouldn't have that information. I'd imagine we'll be doing our taxes ourselves.

That's a good point. If I fund an Gox account via bitinstant that alone is not taxable. If I then buy coins and they appreciate I would owe capitol gains on the rise in value. But how would bitinstant know what I paid or even if I executed a buy?

[Rassah]

I predict that the release of this card will cause a short-term drop in the price of Bitcoin, as it now becomes far easier to convert Bitcoin to cash.

If the claim that the cards will be funded with BTC and HOLD BTC right until the sale transaction takes place, I believe the opposite will happen, and more fiat will be converted to BTC and then sit there.

interesting. the tax situation is complicated, because you need to know your cost basis in order to know what is capital gains income... and bitinstant wouldn't have that information. I'd imagine we'll be doing our taxes ourselves.

That's a good point. If I fund an Gox account via bitinstant that alone is not taxable. If I then buy coins and they appreciate I would owe capitol gains on the rise in value. But how would bitinstant know what I paid or even if I executed a buy?

I hope (expect?) that this service will provide monthly credit statements like all other credit cards do, with the only difference being an extra column that shows how much your USD/EUR/GBP purchase cost you in Bitcoin. I also suspect this would be online only, since print&mail is expensive, but maybe BitInstant can add mailed paper statements as an extra source of revenue? That should be enough for tax purposes.

[Rassah]

interesting. the tax situation is complicated, because you need to know your cost basis in order to know what is capital gains income... and bitinstant wouldn't have that information. I'd imagine we'll be doing our taxes ourselves.

That's a good point. If I fund an Gox account via bitinstant that alone is not taxable. If I then buy coins and they appreciate I would owe capitol gains on the rise in value. But how would bitinstant know what I paid or even if I executed a buy?

Would you owe capital gains on it as if it were an investment/commodity/collector's item, or would you owe capital gains only on the portion exchanged back into USD/EUR as if it were a foreign currency?

[BoardGameCoin]

I don't have a deep enough understanding of tax law to answer this, but I think my plan was to only calculate based on the amount converted back into USD.

[Rassah]

I don't have a deep enough understanding of tax law to answer this, but I think my plan was to only calculate based on the amount converted back into USD.

My plan as well, and that's how businesses typically do it. I don't know if this was settled w/ Bitcoin yet, but that's likely in another topic/thread.

[RodeoX]

interesting. the tax situation is complicated, because you need to know your cost basis in order to know what is capital gains income... and bitinstant wouldn't have that information. I'd imagine we'll be doing our taxes ourselves.

That's a good point. If I fund an Gox account via bitinstant that alone is not taxable. If I then buy coins and they appreciate I would owe capitol gains on the rise in value. But how would bitinstant know what I paid or even if I executed a buy?

Would you owe capital gains on it as if it were an investment/commodity/collector's item, or would you owe capital gains only on the portion exchanged back into USD/EUR as if it were a foreign currency?

I was not clear in my post, but my understanding is that when you convert back to USD it is like selling an investment. That is the point when a value is assessed (the sale price) and you owe on the increase in value. That increase represents your income or taxable profit. 

[barbarousrelic]

interesting. the tax situation is complicated, because you need to know your cost basis in order to know what is capital gains income... and bitinstant wouldn't have that information. I'd imagine we'll be doing our taxes ourselves.

That's a good point. If I fund an Gox account via bitinstant that alone is not taxable. If I then buy coins and they appreciate I would owe capitol gains on the rise in value. But how would bitinstant know what I paid or even if I executed a buy?

Would you owe capital gains on it as if it were an investment/commodity/collector's item, or would you owe capital gains only on the portion exchanged back into USD/EUR as if it were a foreign currency?

I'm pretty sure it would be classified under a collectible and not a foreign currency, as no recognized foreign government uses it as legal tender.

[sunnankar]

Would you owe capital gains on it as if it were an investment/commodity/collector's item, or would you owe capital gains only on the portion exchanged back into USD/EUR as if it were a foreign currency?

I'm pretty sure it would be classified under a collectible and not a foreign currency, as no recognized foreign government uses it as legal tender.

There are actually a several reasonable approaches to undertake under US tax law. If you really want to dig into the legal and tax landscape for Bitcoin then there is the 31 page guide A Lawyer's Take On Bitcoin and Taxes with 108 footnotes to statutes, regulations, cases, etc.

[Stephen Gornick]

Related thread:

Bitcoin -> MasterCard (or any credit card)... who cares?
 - http://bitcointalk.org/index.php?topic=102613.0

Unfortunately some are confusing this as being a "credit card" and not a "debit card"

[Giulio Prisco]

This is really great news, especially if (as I understand from Reddit and the posts in this thread), the card will be available internationally. Looks like the best way to spend BTC in the meatspace "real world" and a huge boost for the BTC economy if it takes off.

I must say that I find difficult to suspend disbelief. I think the paperwork  behind a BTC debit card is huge, especially if it is backed by major banks and credit cards.

A debit card is good enough (asking for a credit card would be a little too much, wouldn't it). What I want is a quick way to pay for a beer in BTC. Once we have that, BTC will grow exponentially.

Is Bitinstant here?

[Rassah]

A debit card is good enough (asking for a credit card would be a little too much, wouldn't it). What I want is a quick way to pay for a beer in BTC. Once we have that, BTC will grow exponentially.

Just take out one of those 5% a week BTC loans they're offering in the lending forum, give them your Bitinstant card address as your payout address, and make sure to pay your interest every week  

Actually, wait, holy crap! With your address being public and fundable by anyone, because Bitcoin, that means completely independent people can be set up as the "credit" portion of your otherwise debit card   It's like lending club for credit cards, without all the heavy regulation and licensing requirements (it's still not available in my state)

[SkRRJyTC]

A debit card is good enough (asking for a credit card would be a little too much, wouldn't it). What I want is a quick way to pay for a beer in BTC. Once we have that, BTC will grow exponentially.

Actually, wait, holy crap! With your address being public and fundable by anyone, because Bitcoin, that means completely independent people can be set up as the "credit" portion of your otherwise debit card   It's like lending club for credit cards, without all the heavy regulation and licensing requirements (it's still not available in my state)

Be your own bank! 

[RodeoX]

A debit card is good enough (asking for a credit card would be a little too much, wouldn't it). What I want is a quick way to pay for a beer in BTC. Once we have that, BTC will grow exponentially.

Just take out one of those 5% a week BTC loans they're offering in the lending forum, give them your Bitinstant card address as your payout address, and make sure to pay your interest every week  

Actually, wait, holy crap! With your address being public and fundable by anyone, because Bitcoin, that means completely independent people can be set up as the "credit" portion of your otherwise debit card   It's like lending club for credit cards, without all the heavy regulation and licensing requirements (it's still not available in my state)

I made bold the "holy crap" part for emphasis. Dude your right. one could automate a card reload that produces a monthly statement showing interest etc. Perhaps you could call this a lending club or something else to avoid bank laws? Maybe a peer-to peer lending system that connects borrowers with lenders? I think your on to something.

[Stephen Gornick]

From another thread:



 - http://bitcointalk.org/index.php?topic=115308.0

[cbeast]

Beer and Bitcoin. Is this a picture of Heaven?

[DutchBrat]

I want one !!!

[minimalB]

This is ridiculous! I want one too!