Bitcoin Forum
December 09, 2016, 07:19:32 PM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: « 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [29] 30 31 32 »
  Print  
Author Topic: I just got hacked - any help is welcome! (25,000 BTC stolen)  (Read 343560 times)
allinvain
Legendary
*
Offline Offline

Activity: 2002



View Profile
June 24, 2011, 12:34:46 AM
 #561

Yes, hopefully the trolls will back off at least a little bit.


1481311172
Hero Member
*
Offline Offline

Posts: 1481311172

View Profile Personal Message (Offline)

Ignore
1481311172
Reply with quote  #2

1481311172
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481311172
Hero Member
*
Offline Offline

Posts: 1481311172

View Profile Personal Message (Offline)

Ignore
1481311172
Reply with quote  #2

1481311172
Report to moderator
allinvain
Legendary
*
Offline Offline

Activity: 2002



View Profile
June 24, 2011, 01:02:10 AM
 #562

Yes, hopefully the trolls will back off at least a little bit.

This forum? The trolls have trolls.

Lol..it has inceptionary trolls (trolls within trolls within trolls).

Thankfully I just bought a few crates of this stuff (with BTC Wink ) :



Uploaded with ImageShack.us

marcus_of_augustus
Legendary
*
Offline Offline

Activity: 2100



View Profile
June 24, 2011, 10:01:37 AM
 #563


So what's the tax implications of mining 25,000 btc that go missing through nefarious means ... or otherwise i suppose, e.g. into the btc black hole?

allinvain
Legendary
*
Offline Offline

Activity: 2002



View Profile
June 24, 2011, 10:09:53 AM
 #564


So what's the tax implications of mining 25,000 btc that go missing through nefarious means ... or otherwise i suppose, e.g. into the btc black hole?

Hmm, good question. I wish I could answer it. This is a legal grey area here. Should we treat BTC as a stock or some other asset that gets taxed only when converted into USD. Or is me mining 25K back then an income stream even though I never converted it into so called "real money" (ie money recognized by the government or belonging to the government).

The way I intended to treat it (had I still controlled that 25K BTC) is as a capital gain. If I sold some of those bitcoins I would've reported my profits as income. Granted where I live I would've been taxed like hell.

Any tax experts here? How should I treat this 25K BTC loss; tax write-off? Doubt that would fly with the tax man.

marcus_of_augustus
Legendary
*
Offline Offline

Activity: 2100



View Profile
June 24, 2011, 10:40:17 AM
 #565


So what's the tax implications of mining 25,000 btc that go missing through nefarious means ... or otherwise i suppose, e.g. into the btc black hole?

Hmm, good question. I wish I could answer it. This is a legal grey area here. Should we treat BTC as a stock or some other asset that gets taxed only when converted into USD. Or is me mining 25K back then an income stream even though I never converted it into so called "real money" (ie money recognized by the government or belonging to the government).

The way I intended to treat it (had I still controlled that 25K BTC) is as a capital gain. If I sold some of those bitcoins I would've reported my profits as income. Granted where I live I would've been taxed like hell.

Any tax experts here? How should I treat this 25K BTC loss; tax write-off? Doubt that would fly with the tax man.

What is your insurance situation? If your $500,000 gold/cash stash went missing ... you might be covered by householder's insurance!

... just saying, it ain't real until you make it so ... an then do you want an insurance lawyer crawling back up your blockchain making sure you haven't just sent them to yourself to avoid prying eyes, taxes or some such ...

Rob P.
Member
**
Offline Offline

Activity: 84



View Profile WWW
June 24, 2011, 12:14:27 PM
 #566

Now, I don't blame folks for being skeptical of allinvain's story.  I don't deny there's interesting issues raised by some questioning the validity of his story.  But I find it astonishing that so many would viciously attack someone who's done nothing more than ask for the help & expertise of this community to recover his property.  I suppose that's the nature of the internet these days.

I've never viciously attacked him.  Just saying, since I was quoted. 

--

If you like what I've written here, consider tipping the messenger:
1GZu4CtHa6ai8iWoWiVFxV5VVoNte4SkoG

If you don't like what I've written, send me a Tip and I'll stop talking.
SMTB1963
Member
**
Offline Offline

Activity: 100



View Profile
June 24, 2011, 02:52:44 PM
 #567

I've never viciously attacked him.  Just saying, since I was quoted.  

Sorry Rob P., I should have made it clear I wasn't referring to you.  My apologies.   Smiley
SgtSpike
Legendary
*
Offline Offline

Activity: 1344



View Profile
June 24, 2011, 04:11:43 PM
 #568


So what's the tax implications of mining 25,000 btc that go missing through nefarious means ... or otherwise i suppose, e.g. into the btc black hole?

Hmm, good question. I wish I could answer it. This is a legal grey area here. Should we treat BTC as a stock or some other asset that gets taxed only when converted into USD. Or is me mining 25K back then an income stream even though I never converted it into so called "real money" (ie money recognized by the government or belonging to the government).

The way I intended to treat it (had I still controlled that 25K BTC) is as a capital gain. If I sold some of those bitcoins I would've reported my profits as income. Granted where I live I would've been taxed like hell.

Any tax experts here? How should I treat this 25K BTC loss; tax write-off? Doubt that would fly with the tax man.
Unless you already claimed a gain from it, you can't claim a loss.  Or, I suppose you could claim a gain AND a loss, but you'd have to look at the tax liability implications of doing so - it may not just "net out" as you would think, it may cause your tax liability to go up.

You don't need to report capital gains until you sell an asset (pretty sure mark-to-market doesn't apply to bitcoins), so if it is stolen, you only report on the loss of what you initially purchased the asset for.  I suppose you could argue that the value you paid is the cost of electricity used to generate the coins, but I think that's the max you could take as a tax deductible for stolen goods.
allinvain
Legendary
*
Offline Offline

Activity: 2002



View Profile
June 24, 2011, 08:02:33 PM
 #569

Unless you already claimed a gain from it, you can't claim a loss.  Or, I suppose you could claim a gain AND a loss, but you'd have to look at the tax liability implications of doing so - it may not just "net out" as you would think, it may cause your tax liability to go up.

You don't need to report capital gains until you sell an asset (pretty sure mark-to-market doesn't apply to bitcoins), so if it is stolen, you only report on the loss of what you initially purchased the asset for.  I suppose you could argue that the value you paid is the cost of electricity used to generate the coins, but I think that's the max you could take as a tax deductible for stolen goods.

I see. OK, thanks for the info. That's probably what I'll do..dump my btc and move on..declare that as a capital gain and pay taxes like a good subservient of the government..

Heh..yeah it should be fun to try to figure out how much I paid in electricity to generate them...time to dig out the old power bills.

phungus
Full Member
***
Offline Offline

Activity: 128


I'm doin' fine on cloud 9


View Profile
July 08, 2011, 03:02:29 PM
 #570


Hey everyone,

I just talked to Allinvain in #bitcoin and he had said that to date he had only received .01BTC to help recover his loss.

Seeing as how this is an important lesson for the community, I think folks should rightly chip in a little for him.

I've sent .5 BTC to Allinvain. I encourage others to do the same.

His BTC address is 16vD6WnnUfU1s6bbwShapoj9U5zwduBBbs

but he should probably post here to confirm that this really belongs to him before anyone sends anything to it. I promise it's the one he gave me on IRC though.


Just trying to look out for him since he said he wasn't sure he was comfortable asking for donations.

SO I'M ASKING FOR HIM.

He lost 25,000 BTC!


BitVPS -- Senior System Admin, Co-Owner
http://www.bitvps.com -- Reliable Servers and Support - KVM, OpenVZ & Dedicated
allinvain
Legendary
*
Offline Offline

Activity: 2002



View Profile
July 08, 2011, 03:07:58 PM
 #571

I confirm the donation sent by phungus, and I thank him from the bottom of my heart. Confirmation of him actually sending the donation:

1e61bfb878...   Block 135315 (2011-07-08 14:38:19)   0.5   Received: Address   
1Q9dXNraKmiDrPoSXevAGV4mniZaFSj3XH
1LrZdXTHbWYvPkzUfXCPK1bdWbZ2s7AggK
1AdP1P4SP7du9zkLGTEk9XVYAWpEHi6qdo
1LvzhjFT6zow41XTGr3f4QVnXPNMxB5q8R
1LLtyyPHqm8Jt1Hr5Tsq4JApTmvmgKgfEx

or

http://blockexplorer.com/t/29n6KoJmoo

Also I'd like to thank the other person who donated 0.01 btc. I forgot your name (I'm really sorry) but if you'd like to make yourself known here please do so. Thanks to all.


JoelKatz
Legendary
*
Offline Offline

Activity: 1386


Democracy is vulnerable to a 51% attack.


View Profile WWW
July 08, 2011, 03:54:05 PM
 #572

Any tax experts here? How should I treat this 25K BTC loss; tax write-off? Doubt that would fly with the tax man.
I don't see any reason you can't treat it as a loss and deduct your basis. Note that if this was a business loss, it's only deductible against business profits. I believe you can hold it over for future years when you have a profit. If this was a hobby loss, I believe you can only deduct it if you previously paid taxes on a hobby gain. I don't think you can hold over a hobby loss, but I'm not sure.

Basically, it's the same as if a physical object was stolen. Your loss is the lesser of its fair market value or your tax basis in it.

I am an employee of Ripple.
1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
sadpandatech
Hero Member
*****
Offline Offline

Activity: 504



View Profile
July 08, 2011, 04:40:44 PM
 #573

Any tax experts here? How should I treat this 25K BTC loss; tax write-off? Doubt that would fly with the tax man.
I don't see any reason you can't treat it as a loss and deduct your basis. Note that if this was a business loss, it's only deductible against business profits. I believe you can hold it over for future years when you have a profit. If this was a hobby loss, I believe you can only deduct it if you previously paid taxes on a hobby gain. I don't think you can hold over a hobby loss, but I'm not sure.

Basically, it's the same as if a physical object was stolen. Your loss is the lesser of its fair market value or your tax basis in it.



This I can partially verify after running it by the wifey. She is a CPA/EA here in FL, mostly small to mid size clients.  Best you could probably do as Joel pointed out is to Schedule B the loss at its fair market value at time it was stolen. It will only go to lower your tax liability though but can be carried over to future filings atleast.  I would be very hesitant to file it as anything until you have run it by a qualified tax attorney though......

If you're not excited by the idea of being an early adopter 'now', then you should come back in three or four years and either tell us "Told you it'd never work!" or join what should, by then, be a much more stable and easier-to-use system. - GA
It is being worked on by smart people. -DamienBlack
SgtSpike
Legendary
*
Offline Offline

Activity: 1344



View Profile
July 08, 2011, 06:44:54 PM
 #574

Any tax experts here? How should I treat this 25K BTC loss; tax write-off? Doubt that would fly with the tax man.
I don't see any reason you can't treat it as a loss and deduct your basis. Note that if this was a business loss, it's only deductible against business profits. I believe you can hold it over for future years when you have a profit. If this was a hobby loss, I believe you can only deduct it if you previously paid taxes on a hobby gain. I don't think you can hold over a hobby loss, but I'm not sure.

Basically, it's the same as if a physical object was stolen. Your loss is the lesser of its fair market value or your tax basis in it.



This I can partially verify after running it by the wifey. She is a CPA/EA here in FL, mostly small to mid size clients.  Best you could probably do as Joel pointed out is to Schedule B the loss at its fair market value at time it was stolen. It will only go to lower your tax liability though but can be carried over to future filings atleast.  I would be very hesitant to file it as anything until you have run it by a qualified tax attorney though......
How could you possibly be allowed to file a loss on something you never filed a gain on?
sadpandatech
Hero Member
*****
Offline Offline

Activity: 504



View Profile
July 08, 2011, 07:04:02 PM
 #575

You can't.  I was only responding to the loss part. There is no 'gain' here though as he never cashed out on any 'earnings' or equity from the asset.  On his claim he would handle it the same way you would any other purchased or acquired asset.   There was no gain or loss when he commenced the trasnaction to acquire the capital asset as it was worth the very same at the moment he acquired it in comparison to bitcoins or other currecny that was used in the trasnaction.  I.e. He traded the intrensic value of one thing for the exact same intrensic value of another under the presumption that both were equal at the time. (if there is any way to show purchasing a capital asset at a loss at time of purchase and that being at all beneficial is well beyond the scope of my limited knowledge)

It can be much more involved if one would so chose it to be but it has been my limited experience that overcomplicated filings on such assets tend to raise red flags....


As stated before I would highly recommend at least consulting a qualified tax attorney before filing anything.

If you're not excited by the idea of being an early adopter 'now', then you should come back in three or four years and either tell us "Told you it'd never work!" or join what should, by then, be a much more stable and easier-to-use system. - GA
It is being worked on by smart people. -DamienBlack
SgtSpike
Legendary
*
Offline Offline

Activity: 1344



View Profile
July 08, 2011, 07:09:41 PM
 #576

You can't.  I was only responding to the loss part. There is no 'gain' here though as he never cashed out on any 'earnings' or equity from the asset.  On his claim he would handle it the same way you would any other purchased or acquired asset.   There was no gain or loss when he commenced the trasnaction to acquire the capital asset as it was worth the very same at the moment he acquired it in comparison to bitcoins or other currecny that was used in the trasnaction.  I.e. He traded the intrensic value of one thing for the exact same intrensic value of another under the presumption that both were equal at the time. (if there is any way to show purchasing a capital asset at a loss at time of purchase and that being at all beneficial is well beyond the scope of my limited knowledge)

It can be much more involved if one would so chose it to be but it has been my limited experience that overcomplicated filings on such assets tend to raise red flags....


As stated before I would highly recommend at least consulting a qualified tax attorney before filing anything.
My bad, I missed the "deduct your basis".  I thought Joel was talking about deducting the full $500k value of the coins, not just the basis.
sadpandatech
Hero Member
*****
Offline Offline

Activity: 504



View Profile
July 08, 2011, 07:13:08 PM
 #577

You can't.  I was only responding to the loss part. There is no 'gain' here though as he never cashed out on any 'earnings' or equity from the asset.  On his claim he would handle it the same way you would any other purchased or acquired asset.   There was no gain or loss when he commenced the trasnaction to acquire the capital asset as it was worth the very same at the moment he acquired it in comparison to bitcoins or other currecny that was used in the trasnaction.  I.e. He traded the intrensic value of one thing for the exact same intrensic value of another under the presumption that both were equal at the time. (if there is any way to show purchasing a capital asset at a loss at time of purchase and that being at all beneficial is well beyond the scope of my limited knowledge)

It can be much more involved if one would so chose it to be but it has been my limited experience that overcomplicated filings on such assets tend to raise red flags....


As stated before I would highly recommend at least consulting a qualified tax attorney before filing anything.


To add, a lot more depends on his situation and manner and time period of acquiring said asset. There is a lot more information needed to correctly file or even really comment on this than what is available publicly.  If you are in a similar boat or are wondering how to file if you have used real world assets to acquire bitcoins feel free to conact me via PM and I can set you up with a tax attorney thats into this kind of non traditional investments who is very discrete and would be much more capable of answering such things.

If you're not excited by the idea of being an early adopter 'now', then you should come back in three or four years and either tell us "Told you it'd never work!" or join what should, by then, be a much more stable and easier-to-use system. - GA
It is being worked on by smart people. -DamienBlack
tonto
Hero Member
*****
Offline Offline

Activity: 678


BubblesBit.com


View Profile WWW
July 08, 2011, 09:50:07 PM
 #578

Hi everyone. I have a brief update. I have a way to keep track of the transactions through the blockchain:

http://folk.uio.no/vegardno/allinvain-transactions.txt

http://folk.uio.no/vegardno/allinvain-addresses.txt

http://folk.uio.no/vegardno/allinvain-transactions-addresses.txt

I'm hoping to soon have an open source script that will check for you if you've unknowingly accepted stolen funds.

Those links continually update with the most recent transactions at the bottom and the earliest at the top, so you can refresh to get the latest.



This kind of bothers me.  What if someone is the recipient 20 iterations from now, are they supposed to send the coins back if they were purchased legitimately?
 
If someone stole $25k in cash, are merchants/banks/etc supposed to verify every serial number they come across?
 
I feel your pain, really I do.  I'm sure it was like a punch in the gut (or worse), but if buy coins from someone (*especially if the stolen coins are 10 or more iterations from the original*), I'll be God-damned if I'm going to give them away for free.  (unless I'm caught on a very good day, then I might sell back at a slight loss)

.
.......
.......
.......
.......
.......
.......
..........
.....
.....
.....
.....
.....
.
GeniuSxBoY
Hero Member
*****
Offline Offline

Activity: 546



View Profile
July 08, 2011, 10:03:04 PM
 #579

It's a charity thing. You don't have to donate to charity... but it's a nice thought if you did.
phungus
Full Member
***
Offline Offline

Activity: 128


I'm doin' fine on cloud 9


View Profile
July 09, 2011, 01:11:15 PM
 #580


Yeah, that's like $300K right now. Imagine knowing you had that for a year or more and that it could finally be a safe nest egg for you and your family, only to lose it because you were trying to be safe by backing it up to Dropbox, because that's a very popular way to back stuff up. Regardless of Allinvain's technical acumen and what he should or should not have known and done, it's a very crappy situation for him.

For Bitcoin to gain any kind of real acceptance, people have to learn from this Universal lesson. This needs to happen now, because it's shaking out the fears and the realities of a world-wide, decentralized digital currency. It's a hard lesson to learn, and Allinvain is going to be remembering this for the rest of his life. Why not help to soften those memories a bit for him?


BitVPS -- Senior System Admin, Co-Owner
http://www.bitvps.com -- Reliable Servers and Support - KVM, OpenVZ & Dedicated
Pages: « 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [29] 30 31 32 »
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!