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

[kiba]

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+%.

It sucks that it costs like 30% of your paycheck but what sucks more is the stress brought by overly complicated tax code.

If all 300 million people pay a simple tax of 1000 bucks a year to the US gubernment, they would have something like three hundred billion dollars to work with every year. Very simple tax and plenty of money for the government to run.

Alas, our government is not a lean, efficient machine.

Hundred of billion of dollars are lost every year to inefficient military research program, pointless wars, jails, porks, paperwork for social security, and enforcement cost for the US' byzantine tax code.

[1715668846]

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[1715668846]

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[hiima]

I will be paying my taxes, next year...

[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+%.

It sucks that it costs like 30% of your paycheck but what sucks more is the stress brought by overly complicated tax code.

If all 300 million people pay a simple tax of 1000 bucks a year to the US gubernment, they would have something like three hundred billion dollars to work with every year. Very simple tax and plenty of money for the government to run.

Alas, our government is not a lean, efficient machine.

Hundred of billion of dollars are lost every year to inefficient military research program, pointless wars, jails, porks, paperwork for social security, and enforcement cost for the US' byzantine tax code.

+1
It's not the concept of taxes that irks me. It's the foolishness with which our government incompetently fritters it away.

[bb113]

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+%.

It sucks that it costs like 30% of your paycheck but what sucks more is the stress brought by overly complicated tax code.

If all 300 million people pay a simple tax of 1000 bucks a year to the US gubernment, they would have something like three hundred billion dollars to work with every year. Very simple tax and plenty of money for the government to run.

Alas, our government is not a lean, efficient machine.

Hundred of billion of dollars are lost every year to inefficient military research program, pointless wars, jails, porks, paperwork for social security, and enforcement cost for the US' byzantine tax code.

Don't forget the billions wasted on generating misleading scientific publications due to the publish or perish atmosphere they have created.

[mjc]

Track what you put in and take out and pay the taxes on the balance an you should be fine.  These are not stocks so it's not capital gains.

[hugolp]

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+%.

It sucks that it costs like 30% of your paycheck but what sucks more is the stress brought by overly complicated tax code.

If all 300 million people pay a simple tax of 1000 bucks a year to the US gubernment, they would have something like three hundred billion dollars to work with every year. Very simple tax and plenty of money for the government to run.

Alas, our government is not a lean, efficient machine.

Hundred of billion of dollars are lost every year to inefficient military research program, pointless wars, jails, porks, paperwork for social security, and enforcement cost for the US' byzantine tax code.

If tax laws where simple and short, how do you create loopholes?

[farlack]

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+%.

It sucks that it costs like 30% of your paycheck but what sucks more is the stress brought by overly complicated tax code.

If all 300 million people pay a simple tax of 1000 bucks a year to the US gubernment, they would have something like three hundred billion dollars to work with every year. Very simple tax and plenty of money for the government to run.

Alas, our government is not a lean, efficient machine.

Hundred of billion of dollars are lost every year to inefficient military research program, pointless wars, jails, porks, paperwork for social security, and enforcement cost for the US' byzantine tax code.

You know only 75% of the United States is 18+ right?
46% of working Americans don't pay any taxes or get refunds at the end of the year.

You can tax that way with the current system, a lot of people are barely making it, and the tax money at the end of the year is very helpful, let alone a husband and wife, with their 2 - 18yo just graduated kids owing 4k to the government.

[BTCisthefuture]

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

Your friend is correct if you sell any of your bitcoins. Any bitcoins you sell/trade for $$$ you are suppose to report/pay when filing your taxes.  If not you do run the risk of getting caught and being audited.

No one likes to pay taxes but you probably should even if you feel like its a small amount and the IRS would never notice, the last thing you want is to be audited, being audited can literally destroy your life and cause so many headaches.  Better to just pay your taxes on any money you make from selling bitcoins.

[thebaron]

I lost all my Bitcoins in an unfortunate boating accident.

[Mike Christ]

I lost all my Bitcoins in an unfortunate boating accident.

IRS proof

[marcus_of_augustus]

I lost all my Bitcoins in an unfortunate boating accident.

I forgot the password, haxor took them, hard drive failure, brain wallet explosion when you kicked my door in, dog ate my paper wallet ... endless lulz to be had with that one.

[muyuu]

I lost all my Bitcoins in an unfortunate boating accident.

IRS proof

I had them in my brainwallet and forgot 


I'd love to fund the IRS heroes, I feel terrible about this...

[Gurthang]

If I have no choice but to pay taxes I'll gladly pay Bitcoins to a government department of my choosing that I actually believe in, so no military funding for youuuu!

Freedom is not free.  Your freedom is paid for with money and the blood of patriots.

[johnyj]

Do you need to pay tax if you bought some wow gold?

[kiba]

Freedom is not free.  Your freedom is paid for with money and the blood of patriots.

That's propaganda speak.

Nobody wants to believe that the founding of their nation is based on a stupid war based on naked financial interest and tinfoil religious conspiracy theory.

[mobile4ever]

I lost all my Bitcoins in an unfortunate boating accident.

I forgot the password, haxor took them, hard drive failure, brain wallet explosion when you kicked my door in, dog ate my paper wallet ... endless lulz to be had with that one.

That is probably not necessary. I am not a tax expert, but this guy has some good things to say. I believe he knows what he is talking about. The tax rates for certain lifestyles are very different.

[DataPlumber]

Not a lawyer, but I don't think you need to report capital gains until they're realized (ie, you cash out.)

Personally, I'm reporting that income should I incur some, because my, um, "respect" for the IRS outweighs my greed.

Besides, capital gains is taxed at a way lower rate than money I actually had to work for.  (Which is a doorway to a very off-topic discussion I'll leave closed.)

[axus]

You only report realized USD profits.  If you sell off your bitcoins, subtract what you spent for them.  If you don't sell your bitcoins, you are fine.  It's the same rules as gold coins.

[RodeoX]

You only report realized USD profits.  If you sell off your bitcoins, subtract what you spent for them.  If you don't sell your bitcoins, you are fine.  It's the same rules as gold coins.

I'm not a lawyer, but this is my understanding and what my financial advisor thinks. 

[omgitsmehehe]

Wait... So if I keep my BTC that I bought at say $4 and don't cash it into fiat it is not liable to CGT since it is not actually 'money'?

If that is the case, I can just buy items with BTC and sell them for fiat on fleabay?