Things getting interesting once we past $100

[CleverMiner]

Your title is wasting my time,

Why 100$ and not 47$, should simply be "avoiding Tax on USD withdrawal" or something UNinteresting.

If we hit $100 my btc capital will hit 6 figures. So please do stop reading if I'm wasting your time. Better yet, do not post anything else on this thread. Thank you

The title !  It has nothing to do with the OP !

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[deathcode]

Your title is wasting my time,

Why 100$ and not 47$, should simply be "avoiding Tax on USD withdrawal" or something UNinteresting.

If we hit $100 my btc capital will hit 6 figures. So please do stop reading if I'm wasting your time. Better yet, do not post anything else on this thread. Thank you

The title !  It has nothing to do with the OP !

Sue me!

[interfect]

I don't think you're going to get BTC value into a bank account without the government noticing all this income into your bank account that you didn't pay taxes on.

If you want a decentralized exchange you could try Ripple's internal BTC/USD market (in Bitstamp IOUs for each), but it's rather thinly traded.

[deathcode]

I don't think you're going to get BTC value into a bank account without the government noticing all this income into your bank account that you didn't pay taxes on.

If you want a decentralized exchange you could try Ripple's internal BTC/USD market (in Bitstamp IOUs for each), but it's rather thinly traded.

Well, the case is hypothetical as BTC is not yet trading at $100+ and I'm not sure I'll be selling then either.. it's just too tempting to give wells fargo a junk of cash and cancel my mortgage on the other hand, my APR is 4.6 so I guess BTC is "out-profiting" that APR ...
 

[Jack1Rip1BurnIt]

@deathcode

Alright dude...for the last time. Coinabul. Check 'em out. You should be able to easily figure it out. Or you aren't as clever as some of your comments suggest.

[bitjet]

How do I avoid uncle sam to stick its hand in my cookie jar and takes the tax share?
What if I don't report it?

Face to face trades.

Of course, not paying your share into a system that you benefit from makes you a freeloader (or at the very least a leech).

I'll gladly pay the transaction fees/withdrawal fees of trading my bitcoins into USD and then transfering USD to my bank account.
I'm paying  my share to the system I benefitted from, BTC that is. I didn't benefit from USD.

So you don't use roads?  You don't take advantage of the electrical grid?  You aren't protected by the US army?  You won't receive social security?

/devilsadvocate

You did not ask me, but I feel compelled to answer.

Roads: Irreverent. Fuel Tax, local extortion taxes pay for these things.
Electric Grid:  Irreverent. Electric grid is payed for and maintained by people who buy electricity.
US army: NO. The military in it's current state is currently creating a tangible threat to the US through current actions around the globe that protect corporate interests, not those of US citizens.
Social Security: NO.  Is payed for through your voluntary contribution into the SS system. I have never paid a dime into it therefor I am not eligible.

[bitjet]

How do I avoid uncle sam to stick its hand in my cookie jar and takes the tax share?
What if I don't report it?

Face to face trades.

Of course, not paying your share into a system that you benefit from makes you a freeloader (or at the very least a leech).

I'll gladly pay the transaction fees/withdrawal fees of trading my bitcoins into USD and then transfering USD to my bank account.
I'm paying  my share to the system I benefitted from, BTC that is. I didn't benefit from USD.

So you don't use roads?  You don't take advantage of the electrical grid?  You aren't protected by the US army?  You won't receive social security?

/devilsadvocate

This. What your trying to do is one of the main reasons government is against Bitcoin. Pay your shit like the rest of us and be thankful your in a country like the United States.

Yeah, shut up slave! You're in 'merica. The government owns all of your profits but graciously allows you to keep some of them. You should be grateful. I mean you could end up in a country where they don't respect your right to own property.

[gopher]

Your title is wasting my time,

Why 100$ and not 47$, should simply be "avoiding Tax on USD withdrawal" or something UNinteresting.

If we hit $100 my btc capital will hit 6 figures. So please do stop reading if I'm wasting your time. Better yet, do not post anything else on this thread. Thank you

Mr just-about-to-make-it-Bitcoin-millionaire, +1 to CleverMiner's post, and you can bullshit yourself as much as you want, but this still does not change the fact that you are concerned about paying tax on your USD withdrawals.

I'm afraid the only legal way to do it is to avoid widrawals in USD alltogether.

One way of doing that is to open OKPay wallet, get their reloadable-MC (make sure it is not US but Euro), deposit your Bitcoin milions directry with them for a small fee, then use your shiny new card to spend your rishes anywhere you see MC logo

Now, can you say "Thank you, gopher"?

[lebing]

How do I avoid uncle sam to stick its hand in my cookie jar and takes the tax share?
What if I don't report it?

Face to face trades.

Of course, not paying your share into a system that you benefit from makes you a freeloader (or at the very least a leech).

I'll gladly pay the transaction fees/withdrawal fees of trading my bitcoins into USD and then transfering USD to my bank account.
I'm paying  my share to the system I benefitted from, BTC that is. I didn't benefit from USD.

So you don't use roads?  You don't take advantage of the electrical grid?  You aren't protected by the US army?  You won't receive social security?

/devilsadvocate

This. What your trying to do is one of the main reasons government is against Bitcoin. Pay your shit like the rest of us and be thankful your in a country like the United States.

I pay my taxes every year, bitcoin however is outside the government control. Worst case scenario I will withdraw in a tax haven account.

Yeah, one used to be able to do that... now not so much. Heard of FATCA?

[evolve]

@deathcode

Alright dude...for the last time. Coinabul. Check 'em out. You should be able to easily figure it out. Or you aren't as clever as some of your comments suggest.

Coinabul has a shitload of scam complaints against them right now. I wouldn't trust them.

[justusranvier]

Yeah, one used to be able to do that... now not so much. Heard of FATCA?

FATCA would be rendered irrelevant by widespread bitcoin adoption. If the US government tries to crack down on bitcoin with capital controls they won't be able to stop people with significant bitcoin holdings from spending them in other countries.

[tonto]

So now that there's another "bubble" at full speed, I'm reaching a point where crossing $100 will mean that me as well as others are making some serious money (I'll leave up to you to define what serious money is)
My concern now is, what if i want to sell and withdraw the money to my US Bank Account.
How do I avoid uncle sam to stick its hand in my cookie jar and takes the tax share?
What if I don't report it?
What if I transfer small amounts ($1000 at a time ever week or so..)
Any accountants in the forum to help me do the laundry?

Try things like buying amazon gift codes and using that to purchase crap that you would normally buy, thereby freeing up your existing money.  Like kleenexes, for instance.. who doesn't need kleenexes?  Stock up on crap like that.

[tonto]

Oh and you can buy silver and gold direct from a couple websites using bitcoin already - that'd be a good thing to help hedge some of your upcoming wealth.

[deathcode]

See the FinCEN statement? If you use bitcoin to directly buy things, you don't need to pay anything

The FinCEN statement does not say that or anything else about taxes.  The statement has to do with registration as a Money Services Business.

While the word "taxes" is not used in the FinCEN guidance, the following is stated:

"A user of virtual currency is not an MSB under FinCEN’s regulations and therefore is not subject to MSB registration, reporting, and recordkeeping regulations. However, an administrator or exchanger is an MSB under FinCEN’s regulations, specifically, a money transmitter, unless a limitation to or exemption from the definition applies to the person."

Now, reading further down you see the following:

"A person that creates units of this convertible virtual currency and uses it to purchase real or virtual goods and services is a user of the convertible virtual currency and not subject to regulation as a money transmitter. By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter."

So, my understanding is this:

As long as I stay in BTC world, I'm ok. As soon as I convert my money to USD, and use a US bank, I'm in the system and I am subject to the Bank Secrecy Act.

[Explodicle]

I talked to my accountant yesterday, and he'd already heard of Bitcoin. If you intend to sell for USD you should take note of what price you initially bought for so you can call it a capital gain/loss.

[deathcode]

I talked to my accountant yesterday, and he'd already heard of Bitcoin. If you intend to sell for USD you should take note of what price you initially bought for so you can call it a capital gain/loss.

I should take note?
So the IRS is going to take my word for it?
I can easily say I bought at 72 and sold at 73.5

[rayvellest]

The way I see it, the only way to avoid an additional layer of tax on your BTC earnings would be simply by buying products and services with it. Surely, that may be a bit difficult at the moment, but I'm sure more and more business will start to accept Bitcoins soon.

[SgtSpike]

I talked to my accountant yesterday, and he'd already heard of Bitcoin. If you intend to sell for USD you should take note of what price you initially bought for so you can call it a capital gain/loss.

I should take note?
So the IRS is going to take my word for it?
I can easily say I bought at 72 and sold at 73.5

Yes, the IRS will take your word for it.  That is, unless you get selected to be audited.  Then you'd better be damn sure you have a paper trail to back up every dollar you report (or don't report) on your income tax.

[Fuzzy]

Since they are the ones that have to prove I committed fraud and not me the one that has to prove that I'm innocent, then I win

If that's how you think they work, you're in for a shock.

[SgtSpike]

I talked to my accountant yesterday, and he'd already heard of Bitcoin. If you intend to sell for USD you should take note of what price you initially bought for so you can call it a capital gain/loss.

I should take note?
So the IRS is going to take my word for it?
I can easily say I bought at 72 and sold at 73.5

Yes, the IRS will take your word for it.  That is, unless you get selected to be audited.  Then you'd better be damn sure you have a paper trail to back up every dollar you report (or don't report) on your income tax.

FIne by me.. Since they won't be able to prove that I bought/sold at any point and even if they trace where bitcoins are going using the blockchain, they don't know what address is mine or not, therefore, irrelevant. So I can't prove when and at what price I bought/sold and they can't prove it either.
Since they are the ones that have to prove I committed fraud and not me the one that has to prove that I'm innocent, then I win
Obviously I wouldn't want to be in that legal hassle, but it's nice to know bitcoin offers that level of anonymity

Usually, they take a look at your bank account(s) and count every deposit into them as "income", then work backwards from there.  It is on you to prove what is deductible from that income by showing them how much you paid for the Bitcoins you just sold for $8k, or showing them how much you spent on electricity to mine them, etc.

IRS audits on individuals aren't usually about fraud - they're more about making sure you're paying all the taxes you actually owe.  Sometimes they can reveal true fraud, but most of the time, they just find a bunch of accidentally unreported income and fine you for it.