BitcoinBallin (OP)
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April 10, 2013, 03:07:07 PM |
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Chet
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April 10, 2013, 03:20:30 PM |
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1) don't sell, problem solved 2) the heat on media scare stories is really cranking up 3) If you do sell, be a good doobie and pay your taxes
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christop
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April 10, 2013, 03:21:24 PM |
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'Tis no different than reporting and paying taxes for other types of capital gains, such as stocks and precious metals.
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Tips are always welcome: 17Z63hLi2ox4fCMhDqVJrLTJiXVcBMJpMo Alpaca socks donations: 1sockzDWcF8mrC59CgiN7HAJm6xL7TiRW
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alexeft
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April 10, 2013, 05:16:03 PM |
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A question if you will. How does it work in the US? One must declare the bitcoins that he holds, or just declare the income when converting them to dollars?
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mebezac
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April 10, 2013, 06:22:41 PM |
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A question if you will. How does it work in the US? One must declare the bitcoins that he holds, or just declare the income when converting them to dollars?
Here in 'merica you would only have to claim your income you made from selling Bitcoins, the Bitcoins you're holding are completely worthless in the eyes of the IRS, they can't tax it. Which is why it is a good thing to pay for things using bitcoins.
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BTC: 168d57nW72Y6DidPgE88iL7vYmpQD45dYK|LTC: LLPttXuFF2uTo2CWeEwXU5CwcUcgQ4NGd3
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JBDive
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April 10, 2013, 07:01:39 PM |
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A question if you will. How does it work in the US? One must declare the bitcoins that he holds, or just declare the income when converting them to dollars?
Here in 'merica you would only have to claim your income you made from selling Bitcoins, the Bitcoins you're holding are completely worthless in the eyes of the IRS, they can't tax it. Which is why it is a good thing to pay for things using bitcoins. I don't think that would be true in all cases. I might go with that if you bought 100 BTC at $100 and sold 100BTC at $200 however if you mined those same coins you would at best fall under the Uniform Capitalization Rules and since my cost would be included in determining Cost Basis the "income" if any would be what I determined much of it to be. At the same time if I traded those BTC for say silver I'm pretty sure there is no "gain" to be taxed. A Capital Gain is when you buy an asset at one price and sell it at a higher one. Income is derived from employment. BTC falls under neither unless we start stretching the terminology and laws.
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eadmanday
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April 10, 2013, 08:43:56 PM |
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Guys the way you are view this is not a form of stock or a form of bitcoin for bitcoins good. Bitcoins are a barter currency. In the EYES of the IRS that is what it is... so if you made money off of the money in 2013 then when you file the taxes you will be asked to for other income and this is where you would put your barter income from bitcoins.
One way to do this is 1) start it as a small home business. This way you can write off your business cost and your internet, eletro etc..
either way if you sold a old toy for $800 that would be barter income because it was more then the original cost of the toy and thus in IRS's Eyes its taxable.
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Lethn
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April 10, 2013, 09:35:03 PM |
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1) don't sell, problem solved 2) the heat on media scare stories is really cranking up 3) If you do sell, be a good doobie and pay your taxes
You're right, since it seems that Bitcoin has been legally defined as a 'commodity' ( lol ) despite more and more people accepting it as a currency you could just trade for stuff in Bitcoin and you wouldn't have to pay taxes, the only time you'd ever have to pay taxes is if you're dealing purely in paper with the classic utility companies and so on.
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DeathAndTaxes
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Gerald Davis
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April 10, 2013, 10:04:04 PM |
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1) don't sell, problem solved 2) the heat on media scare stories is really cranking up 3) If you do sell, be a good doobie and pay your taxes
You're right, since it seems that Bitcoin has been legally defined as a 'commodity' ( lol ) despite more and more people accepting it as a currency you could just trade for stuff in Bitcoin and you wouldn't have to pay taxes, the only time you'd ever have to pay taxes is if you're dealing purely in paper with the classic utility companies and so on. Currency (i.e. Forex) trades pay taxes on their gains as well. Simple version: if you profit from it the IRS wants a cut. Now our tax code fills a small room so the rules get complex and there are long term capital gains, short term capital gains, special tax rates for dividends, rules for wash sales, limits on this, cutoffs of that, etc. Simple version if you profited the IRS wants a cut.
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Mike Christ
aka snapsunny
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April 10, 2013, 10:25:40 PM |
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The answer is simple:
Get Bitcoin. Keep Bitcoin. Spend Bitcoin.
The IRS only works when it comes to the dollar.
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theta
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April 10, 2013, 10:41:13 PM |
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The answer is simple:
Get Bitcoin. Keep Bitcoin. Spend Bitcoin.
The IRS only works when it comes to the dollar.
Are you sure about that? I think the guys above that mentioned barter income are correct. If you spend bitcoins, in the eyes of the IRS it's as if you sold the bitcoins and used the USD proceeds to buy goods. So at the time of spending them you are subject to capital gains tax. This should apply regardless of how you got the bicoins. Example 1: You buy 10 BTC @ $10. A year later you buy something for 5 BTC. At that time 1 BTC = $100. You are liable for tax on capital gains of 5 BTC * (100-10) = $450. Example 2: You mine 10 BTC. Price of BTC when you mine them is $10. Later you spend 5 of them, when 1 BTC = $100. You are liable for tax on capital gains of 5 BTC * (100-10) = $450. In the second example you haven't even touched dollars yet you have to pay taxes. Be very careful with taxes.
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Sabi
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April 10, 2013, 10:43:24 PM |
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Okay, does the IRS allow you to write off losses on Bitcoin as well?
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Mike Christ
aka snapsunny
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April 10, 2013, 10:51:46 PM |
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The answer is simple:
Get Bitcoin. Keep Bitcoin. Spend Bitcoin.
The IRS only works when it comes to the dollar.
Are you sure about that? I think the guys above that mentioned barter income are correct. If you spend bitcoins, in the eyes of the IRS it's as if you sold the bitcoins and used the USD proceeds to buy goods. So at the time of spending them you are subject to capital gains tax. This should apply regardless of how you got the bicoins. Example 1: You buy 10 BTC @ $10. A year later you buy something for 5 BTC. At that time 1 BTC = $100. You are liable for tax on capital gains of 5 BTC * (100-10) = $450. Example 2: You mine 10 BTC. Price of BTC when you mine them is $10. Later you spend 5 of them, when 1 BTC = $100. You are liable for tax on capital gains of 5 BTC * (100-10) = $450. In the second example you haven't even touched dollars yet you have to pay taxes. Be very careful with taxes. You could be right. However, the IRS is American, and Bitcoin is global. If the IRS plans on profiting from someone's gains, they would first have to figure out who has Bitcoin in America and how much Bitcoin they have. This is very difficult to do, as the IRS does not keep tabs on Bitcoin; they only keep tabs on USD. It would be the same as trading cash; the IRS can't tax you when you hand your buddy 50 bucks for fixing your roof; they can only tax your buddy if he spends that cash on, say, food, or clothing, and then the inescapable taxes of land etc. One would need to declare he is making purchases with Bitcoin for the IRS to tax them for it. Otherwise, it's as if it's not happening.
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NikolaTesla
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April 10, 2013, 11:07:38 PM |
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They have no idea whether I made capital gains or not. They don't know who owns the addresses that sent to and received from my Coinbase account.
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theta
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April 10, 2013, 11:09:50 PM |
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The answer is simple:
Get Bitcoin. Keep Bitcoin. Spend Bitcoin.
The IRS only works when it comes to the dollar.
Are you sure about that? I think the guys above that mentioned barter income are correct. If you spend bitcoins, in the eyes of the IRS it's as if you sold the bitcoins and used the USD proceeds to buy goods. So at the time of spending them you are subject to capital gains tax. This should apply regardless of how you got the bicoins. Example 1: You buy 10 BTC @ $10. A year later you buy something for 5 BTC. At that time 1 BTC = $100. You are liable for tax on capital gains of 5 BTC * (100-10) = $450. Example 2: You mine 10 BTC. Price of BTC when you mine them is $10. Later you spend 5 of them, when 1 BTC = $100. You are liable for tax on capital gains of 5 BTC * (100-10) = $450. In the second example you haven't even touched dollars yet you have to pay taxes. Be very careful with taxes. You could be right. However, the IRS is American, and Bitcoin is global. If the IRS plans on profiting from someone's gains, they would first have to figure out who has Bitcoin in America and how much Bitcoin they have. This is very difficult to do, as the IRS does not keep tabs on Bitcoin; they only keep tabs on USD. It would be the same as trading cash; the IRS can't tax you when you hand your buddy 50 bucks for fixing your roof; they can only tax your buddy if he spends that cash on, say, food, or clothing, and then the inescapable taxes of land etc. One would need to declare he is making purchases with Bitcoin for the IRS to tax them for it. Otherwise, it's as if it's not happening. True, in most cases they won't be able (or won't bother) to find you. But the fact that you can escape being taxed, doesn't mean you are legal. Quite the opposite. You are breaking the law, and what you are telling me (quite right) is that it will be difficult for them to discover you. Yes, possibly, just the same as if you work for cash and don't declare the income. Still, it's a) risky and b) illegal.
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Elwar
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Viva Ut Vivas
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April 10, 2013, 11:13:28 PM |
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More reason to stay out of the Federal Reserve's realm.
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First seastead company actually selling sea homes: Ocean Builders https://ocean.builders Of course we accept bitcoin.
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Mike Christ
aka snapsunny
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April 10, 2013, 11:30:46 PM |
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True, in most cases they won't be able (or won't bother) to find you. But the fact that you can escape being taxed, doesn't mean you are legal. Quite the opposite. You are breaking the law, and what you are telling me (quite right) is that it will be difficult for them to discover you. Yes, possibly, just the same as if you work for cash and don't declare the income. Still, it's a) risky and b) illegal.
If you're worried about the IRS, don't let me stop you. Report all your earnings on BTC and roll with it from there.
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Keninishna
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April 10, 2013, 11:41:54 PM |
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sell btc and transfer into offshore bank account.
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||bit
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April 11, 2013, 12:16:19 AM |
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Okay, does the IRS allow you to write off losses on Bitcoin as well?
Good question. But I don't know. And I'm assuming you mean if you buy btc at price 'X', then the price drops and you sell out for a loss. ...hmmmm... You can with stocks and forex trading. But let's a assume worse case that this is not like either of those. Seems almost as if you don't have at least claim a home business you are operating under, it might be difficult to categorize the loss. But I'm not sure. .............. Here's a scenario: Assume the following under two circumstances: either a home business model and as just individual speculation. 1. You mine bitcoins. 2. You sell them on an exchange. (effective gain) 3. You keep the money in the exchange, and buy bitcoins again to trade. 4. You sell those at a lower price. (effective loss) Can you deduct (4) from (2) under either circumstance? Ifso, which one and how? If not, then in what other circumstance could it be deducted?
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||bit
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April 11, 2013, 01:05:33 AM |
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