Taxes on Bitcoin

[Tmdz]

Those who think that no taxes need to be paid are about to find out otherwise. 

https://www.justice.gov/opa/press-release/file/914226/download

Orders to turn over all transaction records are being sent to exchanges and software to determine ownership of addresses has gone live. If you are caught cheating on your taxes you will wish you had just paid them. It would have been far cheaper.

The US has made a start, but all governments are sure to follow suit. As long as you keep your bitcoins, the government will decide to ignore you. Once you convert it to fiat or spend it, the taxman will start breathing down your neck.

I wouldn't get too worried they are concerned with the big tax cheats and not the small fish like most of here are.  They do not have the resources to hunt down every person that owes the IRS 10 bucks in taxes

Sigh, a couple of good quality posts and then back to utter shit.  It's OK to do because you probably won't get caught.  Real good advice to give you idiot.

Sorry I'm trying to be some what logical and look at what it really means.

Better make sure you the pay tax man his share when you sell those baseball cards cuz the nsa is watching your every move.

[DebitMe]

Those who think that no taxes need to be paid are about to find out otherwise. 

https://www.justice.gov/opa/press-release/file/914226/download

Orders to turn over all transaction records are being sent to exchanges and software to determine ownership of addresses has gone live. If you are caught cheating on your taxes you will wish you had just paid them. It would have been far cheaper.

The US has made a start, but all governments are sure to follow suit. As long as you keep your bitcoins, the government will decide to ignore you. Once you convert it to fiat or spend it, the taxman will start breathing down your neck.

I wouldn't get too worried they are concerned with the big tax cheats and not the small fish like most of here are.  They do not have the resources to hunt down every person that owes the IRS 10 bucks in taxes

Sigh, a couple of good quality posts and then back to utter shit.  It's OK to do because you probably won't get caught.  Real good advice to give you idiot.

Sorry I'm trying to be some what logical and look at what it really means.

Better make sure you the pay tax man his share when you sell those baseball cards cuz the nsa is watching your every move.

Your talking to a CPA.  It would be against my oath to taxpayers and the government if I were to not claim that money.  Because, once again, lets break the rules if we might not get caught, way to live your life.

[dihari]

Just pay tax on your country.
But bitcoin is not legal in many countries that mean you don't have to pay any tax from bitcoin transaction if the country doesn't admit bitcoin as a currency.
Maybe the tax is apply in exchanger. Cmiiw

[Tmdz]

Those who think that no taxes need to be paid are about to find out otherwise. 

https://www.justice.gov/opa/press-release/file/914226/download

Orders to turn over all transaction records are being sent to exchanges and software to determine ownership of addresses has gone live. If you are caught cheating on your taxes you will wish you had just paid them. It would have been far cheaper.

The US has made a start, but all governments are sure to follow suit. As long as you keep your bitcoins, the government will decide to ignore you. Once you convert it to fiat or spend it, the taxman will start breathing down your neck.

I wouldn't get too worried they are concerned with the big tax cheats and not the small fish like most of here are.  They do not have the resources to hunt down every person that owes the IRS 10 bucks in taxes

Sigh, a couple of good quality posts and then back to utter shit.  It's OK to do because you probably won't get caught.  Real good advice to give you idiot.

Sorry I'm trying to be some what logical and look at what it really means.

Better make sure you the pay tax man his share when you sell those baseball cards cuz the nsa is watching your every move.

Your talking to a CPA.  It would be against my oath to taxpayers and the government if I were to not claim that money.  Because, once again, lets break the rules if we might not get caught, way to live your life.

Sure but the people who are worried about their past transactions getting handed over to the irs are the people who DID NOT file it with the irs the last 3 years.  If they did file and pay the taxes then they would not be concerned about this order or care.

So yeah it's completely relevant to discus if those people have something to worry about, furthermore those tax years are now OVER so it is helpful to talk about who the irs will be targeting.

[valley365]

In US, coinbase and other exchanges will report your sales to IRS, so you'll have a include it in the tax return. There's no way to get around it, it's just like selling stocks, all brokerages give the info to IRS.

[coolcoinz]

In US, coinbase and other exchanges will report your sales to IRS, so you'll have a include it in the tax return. There's no way to get around it, it's just like selling stocks, all brokerages give the info to IRS.

Yes, you are expected to report revenue from Bitcoin trading, just like any other.
In EU it's different, they (the exchanges) don't have to report you and usually don't, but if a person is being investigated for tax evasion they may be asked to reveal the transaction details to the tax office.

[Sweeet]

Hi Everybody,

When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?

Thanks for your help.

In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.

[strasboug]

Hi Everybody,

When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?

Thanks for your help.

In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.

I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.

[DebitMe]

Hi Everybody,

When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?

Thanks for your help.

In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.

I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.

You have to pay tax on the mining of bitcoin.  You can deduct things like cost of machines (depreciation) and electricity, but tax is still owed.  Consult an accountant (like me) for further insight.

[valley365]

Hi Everybody,

When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?

Thanks for your help.

In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.

I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.

You have to pay tax on the mining of bitcoin.  You can deduct things like cost of machines (depreciation) and electricity, but tax is still owed.  Consult an accountant (like me) for further insight.

Really? but how to calculate the value of the bitcoin? at the time of mined? Say I got each day some bitcoins because of mining, I have to record the price that day for my tax purpose? It will be a lot of work.

[DebitMe]

Hi Everybody,

When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?

Thanks for your help.

In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.

I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.

You have to pay tax on the mining of bitcoin.  You can deduct things like cost of machines (depreciation) and electricity, but tax is still owed.  Consult an accountant (like me) for further insight.

Really? but how to calculate the value of the bitcoin? at the time of mined? Say I got each day some bitcoins because of mining, I have to record the price that day for my tax purpose? It will be a lot of work.

Technically to be 100% right, you should record the price after each block found with the pool you are using.  Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that.  So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.

[64dimensions]

I have an issue with New Egg which I believe has negative tax consequences. I have already complained to no avail.

I am looking to purchase more Sapphire RX470 8gb cards after evaluating one. Currently this card from NE is listed at $214 with a free $60 game.

The problem is the way they invoice. For the one card I purchased, they supplied two invoices.

The first invoice takes the card price of $214 and then an obscurely written 2nd line on the invoice subtracts  "a credit" for $60. So the first invoice shows that the net card cost is $154.

The second invoice is for the $60 video game and the total line has $60. Adding the two together and voila, we get the $214 catalog price total.

My complaint to them was that they are potentially hurting any business customer because their way of invoicing shows cost basis of the card as $154 not $214. While the chance of an audit is tiny, your invoice has reduced the cost basis of this card by $60 and you have given me a game invoice for $60. Especially for an order of say five, what is the audit defense against expensing 5 identical $60 computer games.?

[DebitMe]

I have an issue with New Egg which I believe has negative tax consequences. I have already complained to no avail.

I am looking to purchase more Sapphire RX470 8gb cards after evaluating one. Currently this card from NE is listed at $214 with a free $60 game.

The problem is the way they invoice. For the one card I purchased, they supplied two invoices.

The first invoice takes the card price of $214 and then an obscurely written 2nd line on the invoice subtracts  "a credit" for $60. So the first invoice shows that the net card cost is $154.

The second invoice is for the $60 video game and the total line has $60. Adding the two together and voila, we get the $214 catalog price total.

My complaint to them was that they are potentially hurting any business customer because their way of invoicing shows cost basis of the card as $154 not $214. While the chance of an audit is tiny, your invoice has reduced the cost basis of this card by $60 and you have given me a game invoice for $60. Especially for an order of say five, what is the audit defense against expensing 5 identical $60 computer games.?

Just want to make sure I understand, but you are actually paying $214, but then you get a game worth $60?  So when you make the purchase, $214 is coming out of your bank account?

[64dimensions]

I have an issue with New Egg which I believe has negative tax consequences. I have already complained to no avail.

I am looking to purchase more Sapphire RX470 8gb cards after evaluating one. Currently this card from NE is listed at $214 with a free $60 game.

The problem is the way they invoice. For the one card I purchased, they supplied two invoices.

The first invoice takes the card price of $214 and then an obscurely written 2nd line on the invoice subtracts  "a credit" for $60. So the first invoice shows that the net card cost is $154.

The second invoice is for the $60 video game and the total line has $60. Adding the two together and voila, we get the $214 catalog price total.

My complaint to them was that they are potentially hurting any business customer because their way of invoicing shows cost basis of the card as $154 not $214. While the chance of an audit is tiny, your invoice has reduced the cost basis of this card by $60 and you have given me a game invoice for $60. Especially for an order of say five, what is the audit defense against expensing 5 identical $60 computer games.?

Just want to make sure I understand, but you are actually paying $214, but then you get a game worth $60?  So when you make the purchase, $214 is coming out of your bank account?

Correct. $214 on a cc. You are given 2 separate invoices with completely different invoice numbers. The one for $154, is the RX470. The other one for is $60, a "Hitman" PC game. The price on their website for this card is $214. No mention of this weird allocation of cost. The game is some sort of incentive in lieu of a discount. I asked about getting a further discount and no game. No can do.

[DebitMe]

I have an issue with New Egg which I believe has negative tax consequences. I have already complained to no avail.

I am looking to purchase more Sapphire RX470 8gb cards after evaluating one. Currently this card from NE is listed at $214 with a free $60 game.

The problem is the way they invoice. For the one card I purchased, they supplied two invoices.

The first invoice takes the card price of $214 and then an obscurely written 2nd line on the invoice subtracts  "a credit" for $60. So the first invoice shows that the net card cost is $154.

The second invoice is for the $60 video game and the total line has $60. Adding the two together and voila, we get the $214 catalog price total.

My complaint to them was that they are potentially hurting any business customer because their way of invoicing shows cost basis of the card as $154 not $214. While the chance of an audit is tiny, your invoice has reduced the cost basis of this card by $60 and you have given me a game invoice for $60. Especially for an order of say five, what is the audit defense against expensing 5 identical $60 computer games.?

Just want to make sure I understand, but you are actually paying $214, but then you get a game worth $60?  So when you make the purchase, $214 is coming out of your bank account?

Correct. $214 on a cc. You are given 2 separate invoices with completely different invoice numbers. The one for $154, is the RX470. The other one for is $60, a "Hitman" PC game. The price on their website for this card is $214. No mention of this weird allocation of cost. The game is some sort of incentive in lieu of a discount. I asked about getting a further discount and no game. No can do.

I wouldn't worry about it.  Just keep a list of your "fixed assets" or if you are choosing to just expense it keep some record of the payment and make sure everything is documented well.  As long as the full $214 hit your credit card, I wouldn't be worried about the IRS not believing you actually paid that amount for the card.

[RodeoX]

I would keep in mind that, despite what Mr. Trump thinks, you are not a smart guy when you avoid paying your taxes. You are a deadbeat who thinks someone else should pay your bills.

[darkangel11]

Hi Everybody,

When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?

Thanks for your help.

In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.

I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.

You have to pay tax on the mining of bitcoin.  You can deduct things like cost of machines (depreciation) and electricity, but tax is still owed.  Consult an accountant (like me) for further insight.

Really? but how to calculate the value of the bitcoin? at the time of mined? Say I got each day some bitcoins because of mining, I have to record the price that day for my tax purpose? It will be a lot of work.

Technically to be 100% right, you should record the price after each block found with the pool you are using.  Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that.  So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.

How do you calculate the price? Based on which exchange? Always the same one or maybe the one, which has the lowest price at the moment? Why at the end of each month, couldn't you do it once a year? Aren't you supposed to report gains only when you turn coins to fiat?
There are stances completely different to yours, for example:

To the best of my understanding. When I keep BTC in BTC any income I make in BTC is not taxable as to Federal Income Tax. When I cash out BTC, and have made a profit, that is taxable as income. State taxation laws will vary. Can you be more specific about the situation you are seeking clarification on please?

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

[DebitMe]

Hi Everybody,

When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?

Thanks for your help.

In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.

I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.

You have to pay tax on the mining of bitcoin.  You can deduct things like cost of machines (depreciation) and electricity, but tax is still owed.  Consult an accountant (like me) for further insight.

Really? but how to calculate the value of the bitcoin? at the time of mined? Say I got each day some bitcoins because of mining, I have to record the price that day for my tax purpose? It will be a lot of work.

Technically to be 100% right, you should record the price after each block found with the pool you are using.  Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that.  So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.

How do you calculate the price? Based on which exchange? Always the same one or maybe the one, which has the lowest price at the moment? Why at the end of each month, couldn't you do it once a year? Aren't you supposed to report gains only when you turn coins to fiat?
There are stances completely different to yours, for example:

To the best of my understanding. When I keep BTC in BTC any income I make in BTC is not taxable as to Federal Income Tax. When I cash out BTC, and have made a profit, that is taxable as income. State taxation laws will vary. Can you be more specific about the situation you are seeking clarification on please?

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

I would say you can use any of the major exchanges, as long as you continue to use the same one.  You would want to use the one with the highest price, as that would give you the most basis, but just be consistent.  Would look really fishy to be jumping around all the time using different exchange prices without a valid reason.
So, to answer your second part, think about it like this.  You are walking down the street and find an ounce of gold on the ground and say 1 ounce of gold is currently worth $1000.  You now have income of $1000 that is due in the current year.  So everything is hunky dory, you pay the tax on your fortunate find, but decide to sell the gold next year when the price is $1500 an ounce.  You will now owe a $500 capital gain.
It is the same for bitcoin.  When you mine, you "find bitcoins" that you would owe ordinary income on, and you would need to record a basis for.  When you sell those bitcoins, you will owe capital gains tax based on the appreciated value of the coins you mined.

His response isn't different than mine, he just isn't referencing mining but is talking about buying and holding bitcoin for a period of time.  You won't owe capital gains on the appreciation until you sell it.

Does that clear it up a bit?

[darkangel11]

I would say you can use any of the major exchanges, as long as you continue to use the same one.  You would want to use the one with the highest price, as that would give you the most basis, but just be consistent.  Would look really fishy to be jumping around all the time using different exchange prices without a valid reason.
So, to answer your second part, think about it like this.  You are walking down the street and find an ounce of gold on the ground and say 1 ounce of gold is currently worth $1000.  You now have income of $1000 that is due in the current year.  So everything is hunky dory, you pay the tax on your fortunate find, but decide to sell the gold next year when the price is $1500 an ounce.  You will now owe a $500 capital gain.
It is the same for bitcoin.  When you mine, you "find bitcoins" that you would owe ordinary income on, and you would need to record a basis for.  When you sell those bitcoins, you will owe capital gains tax based on the appreciated value of the coins you mined.

His response isn't different than mine, he just isn't referencing mining but is talking about buying and holding bitcoin for a period of time.  You won't owe capital gains on the appreciation until you sell it.

Does that clear it up a bit?

All clear
My question comes to the fact that I'm used to treating my held coins as not taxable. Sure, you can report how your investment is doing each year, or month, but this means you are monitoring the price and frequently reporting gains and losses, like a trader, instead of just doing it when you finally decide to sell it.

[DebitMe]

I would say you can use any of the major exchanges, as long as you continue to use the same one.  You would want to use the one with the highest price, as that would give you the most basis, but just be consistent.  Would look really fishy to be jumping around all the time using different exchange prices without a valid reason.
So, to answer your second part, think about it like this.  You are walking down the street and find an ounce of gold on the ground and say 1 ounce of gold is currently worth $1000.  You now have income of $1000 that is due in the current year.  So everything is hunky dory, you pay the tax on your fortunate find, but decide to sell the gold next year when the price is $1500 an ounce.  You will now owe a $500 capital gain.
It is the same for bitcoin.  When you mine, you "find bitcoins" that you would owe ordinary income on, and you would need to record a basis for.  When you sell those bitcoins, you will owe capital gains tax based on the appreciated value of the coins you mined.

His response isn't different than mine, he just isn't referencing mining but is talking about buying and holding bitcoin for a period of time.  You won't owe capital gains on the appreciation until you sell it.

Does that clear it up a bit?

All clear
My question comes to the fact that I'm used to treating my held coins as not taxable. Sure, you can report how your investment is doing each year, or month, but this means you are monitoring the price and frequently reporting gains and losses, like a trader, instead of just doing it when you finally decide to sell it.

I sell coins over localbitcoins.  So I treat them as inventory instead of as an investment.  So once a month I revalue my inventory and put the difference to a gain or loss account so my balance sheet stays up to date with actual values.