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Vladimir
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August 27, 2012, 12:36:00 AM
 #1

http://www.irs.gov/formspubs/article/0,,id=241961,00.html
http://www.irs.gov/pub/irs-pdf/f4684.pdf

Silver lining and all that....

It appears that US residents can claim ponzi scheme losses as theft and get it written off taxes.

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August 27, 2012, 12:38:36 AM
 #2

Heh! Like people have been reporting earnings anyways... No way i would fill out such a form and have the irs take a closer look.

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vampire
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August 27, 2012, 12:40:34 AM
 #3

Heh! Like people have been reporting earnings anyways... No way i would fill out such a form and have the irs take a closer look.

I have been. Most of my bitcoin farming was reported on my LLC tax, and so far I am just breaking even at best.
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August 27, 2012, 12:47:48 AM
 #4

a farm sounds like serious mining. i am referring to people with 1-9 gpu making a few extra hundred dollars per month.
i doubt many of us report that.

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August 27, 2012, 01:30:21 AM
 #5

It appears that US residents can claim ponzi scheme losses as theft and get it written off taxes.

too bad bitcoins aren't money and don't qualify  Roll Eyes
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August 27, 2012, 02:08:22 AM
 #6

It appears that US residents can claim ponzi scheme losses as theft and get it written off taxes.

too bad bitcoins aren't money and don't qualify  Roll Eyes

Bitcoins have value or do you think the IRS won't want their cut if your bitcoins are worth $50M USD someday?

It can't be both ways.  It can't be "not money" when it comes time for deductions and "oh yeah it has value" when it comes time to pay taxes.
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August 27, 2012, 08:15:13 AM
 #7

It appears that US residents can claim ponzi scheme losses as theft and get it written off taxes.

too bad bitcoins aren't money and don't qualify  Roll Eyes

Bitcoins have value or do you think the IRS won't want their cut if your bitcoins are worth $50M USD someday?

It can't be both ways.  It can't be "not money" when it comes time for deductions and "oh yeah it has value" w:-8hen it comes time to pay taxes.
You're new to this tax thing aren't you?  Tongue

I swear when I make capital gains the government is suddenly my best friend, but if I make a loss they don't want to know me.
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August 27, 2012, 08:33:04 PM
 #8

It appears that US residents can claim ponzi scheme losses as theft and get it written off taxes.

too bad bitcoins aren't money and don't qualify  Roll Eyes

qualify for what?? taxes

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August 27, 2012, 08:41:19 PM
 #9

a farm sounds like serious mining. i am referring to people with 1-9 gpu making a few extra hundred dollars per month.
i doubt many of us report that.
I am making about $400/month.

I assume I will have to report a couple thousand dollars for my taxes next year. I am exchanging into USD, and it's sent to my bank. So I guess they'll see that and wonder what's up. Can I write off the power costs and GPU costs though? (USA btw)

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August 27, 2012, 08:54:47 PM
 #10

a farm sounds like serious mining. i am referring to people with 1-9 gpu making a few extra hundred dollars per month.
i doubt many of us report that.
I am making about $400/month.

I assume I will have to report a couple thousand dollars for my taxes next year. I am exchanging into USD, and it's sent to my bank. So I guess they'll see that and wonder what's up. Can I write off the power costs and GPU costs though? (USA btw)

no. keep your money

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August 28, 2012, 05:59:31 PM
 #11

a farm sounds like serious mining. i am referring to people with 1-9 gpu making a few extra hundred dollars per month.
i doubt many of us report that.

I mine Bitcoins and Namecoins with 1-2 GPU and I will certainly be reporting my Bitcoin and Namecoin mining income to the CRA here in Canada at tax time. 

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
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August 28, 2012, 07:24:26 PM
 #12

a farm sounds like serious mining. i am referring to people with 1-9 gpu making a few extra hundred dollars per month.
i doubt many of us report that.

I mine Bitcoins and Namecoins with 1-2 GPU and I will certainly be reporting my Bitcoin and Namecoin mining income to the CRA here in Canada at tax time.  

yea me too. if i find a nickel on the ground i report it.



in case the eye rr ss is reading this

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August 28, 2012, 07:30:39 PM
 #13

a farm sounds like serious mining. i am referring to people with 1-9 gpu making a few extra hundred dollars per month.
i doubt many of us report that.

I mine Bitcoins and Namecoins with 1-2 GPU and I will certainly be reporting my Bitcoin and Namecoin mining income to the CRA here in Canada at tax time.  

yea me too. if i find a nickel on the ground i report it.



in case the eye rr ss is reading this

Lets keep this to the tax implications of pirateat40 and Bitcoin Savings and Trust. My take is that if the IRS ever audits pirateat40 dba Trendon Shavers they will have a field day. Furthermore the tax liabilities may well far exceed USD 0.05.

Concerned that blockchain bloat will lead to centralization? Storing less than 4 GB of data once required the budget of a superpower and a warehouse full of punched cards. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg https://en.wikipedia.org/wiki/Punched_card
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August 28, 2012, 08:10:36 PM
 #14

It can't be both ways.  It can't be "not money" when it comes time for deductions and "oh yeah it has value" when it comes time to pay taxes.

Actually, you would be surprised what reasonable legal and tax arguments could be made because Bitcoin and bitcoins are such a nebulous 'thing', there are no hard defined rules and so reasonable minds can differ on approaches to take and how they should be applied. Bitcoin, for a creative accountant, tax lawyer or estate planner can be an incredibly powerful tool.

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August 28, 2012, 08:34:09 PM
 #15

a farm sounds like serious mining. i am referring to people with 1-9 gpu making a few extra hundred dollars per month.
i doubt many of us report that.

I mine Bitcoins and Namecoins with 1-2 GPU and I will certainly be reporting my Bitcoin and Namecoin mining income to the CRA here in Canada at tax time.  

yea me too. if i find a nickel on the ground i report it.



in case the eye rr ss is reading this

HAHAH!

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August 28, 2012, 08:40:47 PM
 #16

A good enough Lawyer can make a million+1 arguments in support of Bitcoin monetary value (as a commodity to begin with), if looking to completely DESTROY someone who has ripped you off.

Think about it:

Is a horse that is born in your stables to one of your mares worth less than a foal that you purchase for cash ?

If I board my horse somewhere and agree to allow the stable the use of my horse for public riding in their interest, by their clientele, in order to offset feeding costs, or they agree to continue to feed the horse for free......are they allowed to let it die from starvation ? or ride off with it and steal it ?

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August 28, 2012, 09:13:37 PM
 #17

A good enough Lawyer can make a million+1 arguments in support of Bitcoin monetary value (as a commodity to begin with), if looking to completely DESTROY someone who has ripped you off.

Think about it:

Is a horse that is born in your stables to one of your mares worth less than a foal that you purchase for cash ?

If I board my horse somewhere and agree to allow the stable the use of my horse for public riding in their interest, by their clientele, in order to offset feeding costs, or they agree to continue to feed the horse for free......are they allowed to let it die from starvation ? or ride off with it and steal it ?

can you rephrase, I'm not quite understanding the example

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August 28, 2012, 09:59:24 PM
 #18

http://www.irs.gov/formspubs/article/0,,id=241961,00.html
http://www.irs.gov/pub/irs-pdf/f4684.pdf

Silver lining and all that....

It appears that US residents can claim ponzi scheme losses as theft and get it written off taxes.


LOL, just because there's an IRS form for ponzi (and other casualty/theft) losses doesn't mean claiming such a loss via that form will survive IRS scrutiny.  I can state unequivocally that filing that form (and it's required child forms) in order to claim a deduction in that loss category will damn near guarantee a whole 'nuther level of IRS scrutiny.  Anyone who makes such a claim in relation to their BTCST account better make damn sure they've got all their ducks in a row.

(ducks...get it?)   Grin

But thanks for the post, Vladmir...it definitely plants another seed for even more BTC drama in the future.  About a year from now, there will be a bunch of naive pussies on the forum screaming about how some guy on the internetz told them they could fill out a form to reduce their tax burden - but now they're being audited!!!

 Roll Eyes
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August 29, 2012, 09:19:09 PM
 #19

a farm sounds like serious mining. i am referring to people with 1-9 gpu making a few extra hundred dollars per month.
i doubt many of us report that.

I mine Bitcoins and Namecoins with 1-2 GPU and I will certainly be reporting my Bitcoin and Namecoin mining income to the CRA here in Canada at tax time. 



What in the hell for? so you're going to add like 100 bucks a year to your Tax return Tongue


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