Legalization of Bitcoins

[groll]

My friend holds some bitcoins from long ago, some bought on MtGox, some mined with Deepbit mining pool, and keeps them in a Trezor. But he would prefer to keep them in an official institution, like Circle or Coinbase, for insurance, security and estate planning reasons. The question is, if he deposits it into a Circle account, what's his immediate tax liability? He can't really prove anything about the origin of coins. He has a few emails from Mtgox and Deepbit, but these emails are easily forgeable and don't even account for all of the coins. Does that mean he has to pay 39.6% + state tax + social security + medicare etc?

Moreover, these coins have been bought/mined while being a resident of another country, and imported into US (though again, there is no proof of it). As far as I understand capital imported by immigrants is not taxed.

I do not think that there are tax when you have bitcoin as your declared asset or something.  I do not know if the country you are into legalized already bitcoin.  Plus, the computation if ever the bitcoin is already legal in your country will depend on how much or how many it is.  What is the value of it.  There is a percentage count for how much you have. 

[btctube]

My friend holds some bitcoins from long ago, some bought on MtGox, some mined with Deepbit mining pool, and keeps them in a Trezor. But he would prefer to keep them in an official institution, like Circle or Coinbase, for insurance, security and estate planning reasons. The question is, if he deposits it into a Circle account, what's his immediate tax liability? He can't really prove anything about the origin of coins. He has a few emails from Mtgox and Deepbit, but these emails are easily forgeable and don't even account for all of the coins. Does that mean he has to pay 39.6% + state tax + social security + medicare etc?

Moreover, these coins have been bought/mined while being a resident of another country, and imported into US (though again, there is no proof of it). As far as I understand capital imported by immigrants is not taxed.

why is there the need for him to prove its origin, the circle requires it?
i would stay away from such official institution if that is the case after all it isn't safe still even if he send his btc to them. can't he just deposit it somewhere else.

[Backside walkaround]

Bitcoins are legal until a law is passed to make them illegal.

Thank you, I was going to write exactly that.  These responses are like from people who've never stepped away from their computers and gotten out in the real world.  If bitcoin hasn't had a law passed banning it, it's legal.  At least in the US.  You cannot mint your own currency, but that isn't what's happening with bitcoin anyway.  And the IRS and everyone knows about it, and they just haven't passed laws regulating it yet.  Ack.  This is just another topic that baits the worst in bitcointalk.

[JITENDERPAR3]

My friend holds some bitcoins from long ago, some bought on MtGox, some mined with Deepbit mining pool, and keeps them in a Trezor. But he would prefer to keep them in an official institution, like Circle or Coinbase, for insurance, security and estate planning reasons. The question is, if he deposits it into a Circle account, what's his immediate tax liability? He can't really prove anything about the origin of coins. He has a few emails from Mtgox and Deepbit, but these emails are easily forgeable and don't even account for all of the coins. Does that mean he has to pay 39.6% + state tax + social security + medicare etc?

Moreover, these coins have been bought/mined while being a resident of another country, and imported into US (though again, there is no proof of it). As far as I understand capital imported by immigrants is not taxed.

my best suggestion for your friend is to deposite his money in bank step by step in small small amount per month . by selling btc . in this way he can transfer his all momey without tax in 5-6 month .

[lucki777]

i think legalization is the the main problem of bitcoin and if this problem i think bitcoin will become more and more popular in this world .

[ipanks]

many country not yet make legalization of bitcoin and not make statement about bitcoin is it legal or not so i think your friend don't have to pay anything since bitcoin itself has free from tax. and i think better your friend move the bitcoin into another wallet like trezor or bitcoin wallet for pc to keep the bitcoin.

[Maesters1-]

many country not yet make legalization of bitcoin and not make statement about bitcoin is it legal or not so i think your friend don't have to pay anything since bitcoin itself has free from tax. and i think better your friend move the bitcoin into another wallet like trezor or bitcoin wallet for pc to keep the bitcoin.

most of the countries has not yet legalize bitcoin, even they have no statement about bitcoin that either it is legal currency or illegal, and that is the reason that still people are using it freely having no restriction on it.

[Mayuyu48]

Bitcoin is under great scrutiny in some parts of the world, Russia is taking strict action against bitcoin , they have blocked localbitcoins in Russia, and the Russian government is in the works to pass a law which will make Bitcoin use strictly illegal, and the people when found using Bitcoin could be prosecuted, it is very far off but totally possible that some governments could  come  down very hard on Bitcoin users in their respective countries for the fear of losing power.

[zodin]

in most of the countries legalization is is the main problem, as yet no country has given any statement about bitcoin that either it is a legal currency or not therefore people are still using it, but if we want bitcoin a permanent currency then we need to legalize it.

[markyminer]

many country not yet make legalization of bitcoin and not make statement about bitcoin is it legal or not so i think your friend don't have to pay anything since bitcoin itself has free from tax. and i think better your friend move the bitcoin into another wallet like trezor or bitcoin wallet for pc to keep the bitcoin.

most of the countries has not yet legalize bitcoin, even they have no statement about bitcoin that either it is legal currency or illegal, and that is the reason that still people are using it freely having no restriction on it.

yes that is a fact that still not a single country has given any statement about bitcoin that either it is legal or illegal, and that is the main problem of bitcoin, i think governments should now take positive step and should consider bitcoin as legal currency.

[kryptqnick]

My friend holds some bitcoins from long ago, some bought on MtGox, some mined with Deepbit mining pool, and keeps them in a Trezor. But he would prefer to keep them in an official institution, like Circle or Coinbase, for insurance, security and estate planning reasons. The question is, if he deposits it into a Circle account, what's his immediate tax liability? He can't really prove anything about the origin of coins. He has a few emails from Mtgox and Deepbit, but these emails are easily forgeable and don't even account for all of the coins. Does that mean he has to pay 39.6% + state tax + social security + medicare etc?

Moreover, these coins have been bought/mined while being a resident of another country, and imported into US (though again, there is no proof of it). As far as I understand capital imported by immigrants is not taxed.

Bitcoin is independent of any country and for using it it doesn't matter where did you get it. In this way it is global money already. Basically, it you have your btc in an online wallet, I guess it would even be incorrect to say that you bring them into country, because there are in the Internet. WHy should your friend proof anything about the origin of coins?

[zeze18]

greeting all sir,..the legality of the financial resources that we get is always in question and, as it is already a fixed rule in developing countries ,,,,