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Author Topic: Avoiding Taxes on Bitcoin Gains  (Read 3009 times)
mgio
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April 02, 2013, 10:37:33 PM
 #21

I am an accountant, working towards CPA, who currently has a job in corporate tax.  The problem with your scenario is that the tax code is not black and white, there are many areas of gray that the IRS sets up for situationse exactly like this, it is in my professional opinion that you would still owe capital gains tax (which btw has now been increased to 20% if you were to make that much of a gain), because of the fact that you can buy more gold now than you would previously been able to, aka a gain.

I do like your scenario though, unfortunately as previously stated, the code is not black and white, and even if you can fully show compliance, the IRS has the power to simply say, "No, we dont agree and you owe tax on this gain" regardless of what the code says.  Then you could either pay the tax or take them to court, which would inevitably end up costing you much more than its worth to just pay the tax.

Although I agree that no penalties or interest would be assessed, although dont take my word for it, I have seen some pretty strange stuff be enforced for weird reasons, I still dont think they would care as long as you paid the back taxes or agreed to some kind of compromise on the amount owed.

Thanks, DebitMe. I'm fully aware this is definitely a gray area. None of this would matter until tax time next year anyways, at which time maybe there will be more clarification on the matter.

If I do try and show full compliance, and the IRS ends up taxing me, well, then I'm in the same position I was in had I just paid the taxes up front.

My understanding is that the 20% rate is only for those in the highest tax bracket (for ordinary tax), although I've seen different charts where 20% extends all the way down. I'm not sure which is more up to date for 2013.
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April 02, 2013, 10:43:07 PM
 #22

I just had a seminar on this, actually was fighting to stay awake, but what I took away was that people in the 0 to 15% tax rate would pay 0 on capital gains, and anything else is 20%, but dont quote me on that, but I am pretty sure that is correct.


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