Enjoy getting raided by the IRS for not reporting income and capital gains.

[Mike Christ]

Bitcoin is just like cash.

Not to governments as far as I know.  None of them have said they recognise bitcoin as cash, to my knowledge. 

Well, we recognize them as cash, so the government needs to pick up the pace.

[Aseras]

Make sure you write off the value of the thousands of bitcoins you lost to pirate. I'm sure you can find a log of the transaction somewhere....

[bg002h]

Paying taxes on bitcoin is likely to raise flags. Once they know what you're involved with Bitcoin, they're gonna presume you're underreporting and audit you.

[ralree]

This is something my 'friend' said to me when discussing bitcoins, how do i(you) respond?

How do I respond?  That I report all my income and capital gains.  Why would anyone assume that I'd be a tax cheat for using cryptocoins?  You have to report income.

[ralree]

Paying taxes on bitcoin is likely to raise flags. Once they know what you're involved with Bitcoin, they're gonna presume you're underreporting and audit you.

What?  You don't even have to specify exactly what the gain was from.  Just put "Services Rendered" on the Schedule D.  Also, if you can't even cite a single instance of this happening, you're just a total FUDmaster here.

[ralree]

Make sure you write off the value of the thousands of bitcoins you lost to pirate. I'm sure you can find a log of the transaction somewhere....

Actually, you can't write off losses on personal loans.  Look it up before tax time!

[Jobe7]

This is something my 'friend' said to me when discussing bitcoins, how do i(you) respond?

How do I respond?  That I report all my income and capital gains.  Why would anyone assume that I'd be a tax cheat for using cryptocoins?  You have to report income.

Do you live in the UK? Because if you do, please let me know what HMRC's response is when you report your income in Bitcoin and that they need to tax your Bitcoin (without changing it to fiat).

Because it's taxable when you change it to fiat (as company/business earnings, though if you show its offset by fiat expenditure then HMRC will have trouble trying to tax you even a small amount).

But ye, seriously, let us know how they tax you, especially if they tax you in Bitcoin.

edit: I'm all for paying taxes, just need the system to accept my taxes in btc.

[ralree]

Capital gains only apply when you *sell* bitcoins. Tell your friend that you're planning on spending them, and that there isn't an IRS dedicated to Bitcoins yet because we pay a network tax instead and don't have a seastead to start our libertarian government up proper.

you have misunderstood how realization of capital gains works in the united states and similar tax systems. while it is true that if you buy or mine bitcoins you probably don't owe tax until you 'sell' them in most cases, 'sell' in this context basically means 'dispose of'.  if you spend $1 to mine 1 coin and then use it to buy something worth $140, you have realized $139 in (capital) income at the time of your purchase.

the same would be true of stocks: if you bought GOOG at $400 in the past and trade it to someone for something worth $800 today, you have 'sold' it for $800 for tax purposes.

This is correct.  You realize the gain whether you spend it or trade it for fiat.  The same goes for gold, silver, bacon, cheese, guns, etc.  Technically, you have to report the fair market value as income upon receipt, and when you dispose of it, you have to report the gain.

[Aseras]

Make sure you write off the value of the thousands of bitcoins you lost to pirate. I'm sure you can find a log of the transaction somewhere....

Actually, you can't write off losses on personal loans.  Look it up before tax time!

It was theft. Deductible.  You can deduct losses in Ponzi schemes.

[marcus_of_augustus]

Make sure you write off the value of the thousands of bitcoins you lost to pirate. I'm sure you can find a log of the transaction somewhere....

Actually, you can't write off losses on personal loans.  Look it up before tax time!

It was theft. Deductible.  You can deduct losses in Ponzi schemes.

Maybe, but I'm pretty sure you can claim back taxes previously paid on unrealised gains of the Poniz that turned out to be fabricated, I heard that Madoff's "investors" did.

Seems to be lots of these FUD-like thread topics appearing, maybe getting close to an interim top I wonder?

[Nemesis]

Capital gains only apply when you *sell* bitcoins. Tell your friend that you're planning on spending them, and that there isn't an IRS dedicated to Bitcoins yet because we pay a network tax instead and don't have a seastead to start our libertarian government up proper.

really? go buy a house with btc (ofcourse seller accept btc), and see where the fun is when IRS raid your new house with tax evasion.

Its pretty clear, you're in Jap as a vagabond while rambling this nonsense.

[bg002h]

Paying taxes on bitcoin is likely to raise flags. Once they know what you're involved with Bitcoin, they're gonna presume you're underreporting and audit you.

What?  You don't even have to specify exactly what the gain was from.  Just put "Services Rendered" on the Schedule D.  Also, if you can't even cite a single instance of this happening, you're just a total FUDmaster here.

Of course no one can cite an instance of audit caused by suspicious IRS filings related to Bitcoin. I should have said (for the statistically impaired): I strongly suspect that anyone who writes "Bitcoin trading" on their tax return is going to markedly increase their odds of being audited.

[madmadmax]

Implying we live in the U.S.

The best analogy to describe the world I've heard so far is that every country is like a drunkard, every drunkard drinks a bottle of vodka until he is lying with the face in the mud unable to stand up properly, the U.S. however is a pretentious drunkard that also works as a school bus driver, so it's not really that other countries are necessarily better or worse than the U.S., it's just that the U.S. allows itself wayy wayyy too much for the state it's currently in.

The country can't even go a decade without invading a foreign country and exploiting it in exchange for natural resources. If I was you bitcoin taxes would be the least thing I'd worry about.

[cdog]

Capital gains only apply when you *sell* bitcoins.

Exactly. Im pretty sure most people here are holding or trading BTC for alt coins, and spending their fiat money they would otherwise invest in something else.

[pyra-proxy]

This is something my 'friend' said to me when discussing bitcoins, how do i(you) respond?

Do you have to pay income/capital gains if you say take USD to buy Euros, then use those Euros to buy football tickets to see Germany vs. France on a Friday night?  No, then why should you have to with bitcoin?

Do you have to pay taxes on those Euros you bought if they just sit in your wallet/purse inactive even if Euro price appreciates vs the dollar?  No, then why should you have to with bit coin?

Now on the flip side, do you pay taxes/capital gains when you buy Euros with USD and when their value vs USD goes up you sell the Euros for more USD than you started with (thus a profit)?  Yes, then you should do the same with bitcoin.... but really the goal in developing bit coin is to improve the first scenario, not this scenario.... this scenario will be happily pulled up by the first scenario.

The likely IMHO most violated tax depending on each persons applicable laws are sales taxes and all their forms.....

[kiba]

For the love of god, just charge a uniform added value tax or a sale tax.

Who fricking cares about capital gains, income tax, property tax, etc?

ONE TAX! ZERO LIABILITY!

And no, you can't use the tax law to implement your favorite social engineering scheme. Also, I don't give a damn about those fucking turbotax and the rest of the tax preparation industry. Go do something more productive and fulfilling than doing tax.

[Merralea]

This is something my 'friend' said to me when discussing bitcoins, how do i(you) respond?

How do I respond?  That I report all my income and capital gains.

This, though for different reasons. If you need to put 'friend' in quotes, it's probably a bad idea to say or even imply that you're breaking any laws. The narcing capabilities of misguided retards are not to be underestimated.

[Thursday]

I wonder how the sale of the Porsche for 300 Bitcoins went.  What do you do when registering?

[RodeoX]

Why does your friend assume you are not going to pay taxes? Consider yourself lucky to only pay 20% on any gain in value. The money you work your butt off for, that is income, likely costs you 30+%.

Look, paying taxes is like praying to god except its real. Enough people stop paying and the world crumbles.

[Mike Christ]

Why does your friend assume you are not going to pay taxes? Consider yourself lucky to only pay 20% on any gain in value. The money you work your butt off for, that is income, likely costs you 30+%.

Look, paying taxes is like praying to god except its real. Enough people stop paying and the world crumbles.

Oh, you