Withdrawing your investments

[witherworth]

Going forward, I'm looking to invest more heavily into BitCoins and their generation. My biggest concern is over their legality and transactions. As stated in the subject, my biggest concern is pulling out my full investment at some point. I believe in the bitcoin system, and will continue to spend BitCoins on goods where possible, however, for people I may borrow investment money from, they're less likely to accept the coins. My question would be on the best way to pull out large amounts of money without it looking fishy.

Additionally, how do the people making $50k+ a year from massive hashing farms  get their money? While the bitcoin community is growing, I'd personally be hard pressed to find $50k worth of goods I would want a year. So, part of that must be going back into USD. Is this money being reported as a taxable income? Are the transactions made to overseas bank accounts, and not linked to belonging to US citizens, or what?

I've given much thought to different ways of making these transactions, but I'm interested in what others are doing. Or ideas others would consider as the most legal way of doing business.

[Stephen Gornick]

My question would be on the best way to pull out large amounts of money without it looking fishy.

What type of money?   I'm going to assume you are referring to cash, ... fiat money.

One way is to use an exchange and then withdraw using a bank transfer (e.g., domestic or international wire).

Of course, for larger amounts most exchanges will require that you verify your identity.

If you prefer to have a check sent to you, many exchanges will do that.  FastCash4Bitcoins.com is one.

None of these would be "fishy", at least not as far as I can tell.

Here's a fairly comprehensive list of exchanges for cash-out.
 - http://en.bitcoin.it/wiki/Selling_bitcoins

Among the numerous options for cashing out is to sell coins in a local cash trade:
 - http://www.LocalBtcoins.com

[witherworth]

Yes, cash. The idea is that I'd like to convert tens of thousands of dollars to something others can spend. Isn't there some sort of reporting done if you used something like Dwolla to withdraw 5k or more to your bank? Is that a single transaction, or a certain amount of money over a period of time? Or am I totally off course here?

I'll look into the links you've provided, thanks!

[odolvlobo]

If by "pull out large amounts of money", you mean sell BTC for dollars, you can do that on Mtgox, the biggest exchange, without too much trouble. If by "looking fishy", you mean without triggering AML, I think you will find that increasingly difficult to do. Exchanging $50k worth of BTC over a year is probably under the AML thresholds, but don't quote me. IANAL

[payb.tc]

If by "pull out large amounts of money", you mean sell BTC for dollars, you can do that on Mtgox, the biggest exchange, without too much trouble. If by "looking fishy", you mean without triggering AML, I think you will find that increasingly difficult to do. Exchanging $50k worth of BTC over a year is probably under the AML thresholds, but don't quote me. IANAL

people would do well to assume that *nothing* is under mtgox's aml thresholds. even small accounts get frozen there.
might have luck somewhere else though.

[Foxpup]

Why do you care if your exchange or your bank reports your transactions? You yourself will be reporting it on your tax return (all money you make from bitcoins is taxable income). And there's nothing illegal about Bitcoin itself, so as long you keep records of your transactions and pay your taxes, you've got nothing to worry about.