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AttorneyBitcoin
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December 22, 2016, 08:44:55 AM
 #1

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com
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December 22, 2016, 02:20:34 PM
 #2

Hello,

There is a secret key remaining as an inheritance.
Heirs do not know bitcoin.
Can the court sell coins and share to heirs.
according to me, Should not be different from real money
How does this in US law

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December 23, 2016, 06:17:13 AM
 #3

I think this would at the very least be considered personal property that has value. If I were filing a probate with court I would definitely list this as an asset of the estate. An Executor could hire an expert to retrieve the coins and convert them to cash in favor of the estate. George Greenberg www.attorneybitcoin.com
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December 23, 2016, 07:31:08 PM
 #4

Thanks for doing this. My question is, that if I was involved in buying something online using bitcoin. Then if I was to pursue a legal case against the seller, then do they consider or help if the transaction was done with bitcoin, specially when the sellers country does not recognize bitcoin ?
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December 24, 2016, 08:42:03 AM
 #5

If you purchased something using BTC, in any country with a civil system of law, where you can sue for breach of contract, it will not matter if you used BTC, as long as you can show proof of delivery of your BTC to the seller and the failure of the seller to deliver the goods or services paid for.

It would be as if you traded a designer purse for a piece of art. If you can show that you sent the purse, that it was received by the seller of the art, and that the seller breached your agreement by not delivering the art to you, then you have a case. You will likely need the contract in writing. 
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December 25, 2016, 06:17:57 PM
 #6

hello sir ,, in my opinion the sale and purchase transactions using bitcoin will happen if both parties understand each other and agree to a payment transaction using bitcoin ,, and if it's in the country there are restrictions on the use bitcoin seller should inform you before the sale and purchase transactions occur ,

   
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December 25, 2016, 08:14:57 PM
 #7

Well put and you are on the right track. In the question above the buyer wanted to sue for some form of breach and was concerned that by having used BTC as the consideration (value traded) that a court would not deem the transaction as legal. My answer was that you can use any form of value as consideration to a transaction, as long as both parties agree to the form of the value of the consideration. The parties will be then be bound under law if there is a breach. Best, AttorneyBitcoin, www.attorneybitcoin.com
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December 28, 2016, 12:28:46 AM
 #8

There is a key issue regarding legal tender which might help some of the explanations here.

If a Bitcoin issue ends up in a court of law in a country that has a legal tender law similar to the USA, (most all countries), litigants are required to accept the legal tender of the state, in any dispute, as full compensation.  (This is the effect of "Good for all debts public and private")

This means that anytime a court is involved, the bitcoin can be sold and the government cash substituted as payment in full to whomever wins the case.  The value at time of transaction in the local fiat currency will be the important point to determine the amount, and should be one of the facts determined by the court.

Perhaps you could expand on this?

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December 28, 2016, 05:20:33 AM
 #9

Well put, Sir.

In the question above the facts assumed that the country (in which the BTC was used to purchase a good or service) did not recognize BTC. I believe it would be irrelevant whether the country recognize BTC as legal tender as the parties to the agreement both agreed that the BTC had value. This is not illusory as BTC does in fact have value. An agreement was struck and consideration was given. 

As to the measure of damages; if the BTC were considered personal property, it would be as if I were giving a valuable painting in consideration for a software program. The measure could come in the form of an expert opinion as to the value of the or painting at the time of the transaction.

A court could order specific performance, that the seller deliver the software program paid for, or monetary damages, which is more likely, which would then require (as you stated) an expert to determine the value of the BTC at the time of the transaction, and then reducing this to a fiat award.

AttorneyBitcoin

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December 29, 2016, 02:18:47 AM
 #10

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


why does the nevada bar have no record of you being an attorney
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December 29, 2016, 02:47:36 AM
 #11

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com
why does the nevada bar have no record of you being an attorney

The Nevada Bar does have a record. See the following link:
https://www.nvbar.org/find-a-lawyer/?usearch=4278

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December 29, 2016, 04:09:27 AM
 #12

Thank you agent.

Morantis will you kindly delete your question regarding no record of my being an attorney? I am licensed and have been practicing for 24 years. The Nevada Bar has had me listed as such the entire time. Did you have a question Sir? 

I have been a Bitcoin attorney for 3 years and was a speaker at Inside Bitcoin in Las Vegas at the Flamingo. Best: George D. Greenberg, Esq. www.attorneybitcoin.com
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December 30, 2016, 01:20:35 PM
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How do I pay the least amount of taxes when covering btc to usd?
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December 31, 2016, 07:11:20 AM
 #14

It depends upon the volume that you are dealing with. If there is a large volume, I understand that there are tax advantages to an LLC. If you wait to take profit for one year then your capital gains taxes are greatly reduced.

Another way to reduce taxes is to itemize on your tax return and list ALL of the expenses incurred in getting your BTC. Power for mining, hardware, software, rental space, tech support, anything you have to pay for in obtaining the BTC is a deduction from the overall profit made.

Another angle might be to simply convert the BTC to Gold. You still would not be converting it to cash and could hold onto the gold. I understand you can do this on EOBOT.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com


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January 02, 2017, 02:30:32 PM
 #15

Thanks for doing this!

I bought Bitcoin in 2015, and used some of it less than a year later to buy Monero (another cryptocurrency). Can I treat this as a "like kind" transaction on which I wouldn't have to pay tax immediately, or do I have to treat this as if I had sold my Bitcoin for cash, then bought the Monero? I'm unable to find a clear answer for this. If I could defer paying tax on the appreciation of the Bitcoin, then I'd have a long term rather than a short term gain.
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January 03, 2017, 06:36:33 AM
 #16

It is my understanding that if you bought the Monero with BTC then you have not made a conversion to fiat and it is not a taxable event.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

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January 07, 2017, 05:30:34 AM
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It is my understanding that if you bought the Monero with BTC then you have not made a conversion to fiat and it is not a taxable event.
lol, you are kidding right?

Are you even a real lawyer?

So by your logic if I use my Bitcoin to buy a house then I am not liable for any capital gains taxes because I didn't cash out to fiat?

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January 08, 2017, 05:19:44 AM
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Yes I am an attorney. If you had bothered to check you would have seen that I have been in practice 24 years. I am transparent and public. Are you? Or are you just hiding and throwing out defamatory statements? 

My Nevada Bar number is 4278

www.attorneybitcoin.com

www.probateattorneyslasvegas.com

Law Offices of George D. Greenberg
7674 W. Lake Mead #245
Las Vegas, Nevada 89128

702 796 5221

Stop on by anytime so I can serve you with a summons and complaint for defamation.

Now to your question/statement: Purchasing Monero with BTC is quite different than purchasing real property with BTC. Although you pose a thought provoking scenario. If you purchase Monero you are still in the crypto world. This is not a taxable event. Talk to a CPA familiar with this and see if you get a different answer.  If you convert virtual currency to a real property purchase this takes the virtual currency out of the virtual currency world, and in my opinion, this would be equivalent to converting to fiat. Any gains previously made on the virtual currency would then become taxable as income, IN MY OPINION.

While I am not a tax attorney I HAVE studied this issue. Problems do arise in the characterization of BTC (and other virtuals.) BTC has elements of fiat, of securities and of personal property/commodities. So it depends upon who is regulating it and for what purposes. The previous question was regarding taxes on a virtual crypto purchasing another virtual crypto.

BTW, have you seen a house for sale that will accept BTC?  I think that would be rare or non-existent.

Respectfully:

George D. Greenberg, Esq.

 
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January 10, 2017, 02:41:23 AM
 #19

Since Bitcoin is so new and such an innovation, it would be safe to say most courts and judges are ignorant of it so I would prefer (and I think it in everyone's best interest) to place any disputes into arbitration heard by an arbitrator with Bitcoin knowledge.

Question #1 How effective are arbitration clauses at keeping issues out of courts and in arbitration

Question #2 Do you offer arbitration services?

Question #3 If so, how do you charge?

Question #4 Do you offer Bitcoin escrow (by holding a signature in a multi-sig contract)?

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January 10, 2017, 07:00:55 AM
 #20

Arbitration has it's place and it's limits as well. Judges and juries are also not experts on details of construction, surgery or engineering, they rely upon expert testimony and exhibits and could rely upon experts in whatever field of Crypto that there is a dispute in.

I will answer you questions:

1. Arbitration clauses are quite effective. This could be good and bad. If the only way to see a Dr. in an emergency is to sign one even if you don't really want to, that is called an adhesion contract and can be voided. But on everyday transactions, visits to Dr.'s for non emergency, business between moderately sophisticated business people, buying a house, they are binding.

2 Yes, I am an Arbitrator for the Clark County Eighth Judicial District Courts and have been so for 9 years under the Arbitration rules established by the Nevada Supreme Court. I am available to Arbitrate or Mediate out of court as well.

3. I charge by the hour. The rate depends upon the nature of the dispute, the complexity, and the amount in controvery.

4. I do not offer BTC escrow services. I do however accept payment in BTC and most other virtual coins.

Thank you for the questions:

George D. Greenberg, Esq.

www.attorneybitcoin.com



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January 12, 2017, 12:55:18 AM
 #21

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


Great. Can tell me about bitcoin and taxes?
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January 12, 2017, 06:43:40 AM
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To the best of my understanding. When I keep BTC in BTC any income I make in BTC is not taxable as to Federal Income Tax. When I cash out BTC, and have made a profit, that is taxable as income. State taxation laws will vary. Can you be more specific about the situation you are seeking clarification on please?

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

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January 12, 2017, 11:32:11 AM
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Hi can you tell me if you need first: An MSB, second, FinCEN Registration, and 3rd, an established Compliance/AML/KYC Program, to sell bitcoins on places like LocalBitcoins? If so/not, is there a minimum amount of trading before you fall under the regulations?

Is selling bitcoins on localbitcoins, via a registered Money Transmitter Service (like Paypal or Western Union), 100% Legal without an MSB/Transmitter License?

Based on the FinCEN advisory letter, it seems like even if you buy & sell on an exchange like Coinbase, you, the user, would still be considered a Money Transmitter (thus required to become an MSB legally), is that false?

Also, I realize many of these issues are different by state, so if you could, please refer to either federal law or your state (I think you said Nevada) laws thanks.

P.S.S: I read that if you earn income as Bitcoin, then you record the dollar value of it that day, and any changes in value from the initial earnings value counts as capital gains/losses, but not sure about that.
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January 14, 2017, 04:04:13 AM
 #24

As to being a MSB and getting a Money Transmitter License that depends upon the State. As to FinCEN the activities are considered money transmission but that only applies to keeping and implementing some sort of KYC/AML procedures. These are differences if you are doing it as an individual or as business entity. Once you operate as a business entity you will get more scrutiny. The problems are not really the regulations, you can overcome that, but rather getting banks to do business with you. 

It is the nature of the business activity, not the amounts, that determines whether it is a M.T. business. There are however reporting requirements to FinCEN that depend upon the amounts of the transactions whether or not the activity is as an individual or as a business entity.

The State of Nevada does not currently hold BTC trading as a Money Transmission activity.

I do not have an answer as to the capital gains. Please speak to a CPA.

George D. Greenberg, Esq.

www.attorneybitcoin.com
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January 18, 2017, 12:45:28 AM
 #25

George,

I do Bitcoin research that involves attempting to crack keys that were generated with non-standard tools (e.g. http://fc16.ifca.ai/preproceedings/36_Vasek.pdf). I am curious as to your opinion on the following:

* What law(s), if any, would be broken if I were to used cracked private keys to take the Bitcoin for myself? To be clear, I don't believe this would be ethical, and wouldn't do it even if it didn't break any laws, but I'm nonetheless interested in the legal aspects.

* Would it be legal to create a transaction with the coins in an attempt to alert the owner, provided I paid the fees for such a transaction myself and the transaction kept the coins in the same address? If not, what law do you believe this would violate?

* Would it be legal to move the coins into an address I control, then make a good faith effort to find the rightful owner? If so, what would be appropriate to require in terms of verification? What happens if the rightful owner cannot be found for a long time?

* Is there any way to get standing to have a court to rule on any of this without exposing myself to criminal prosecution?

My current MO is not to touch any coins I find private keys for and avoid publishing the keys, and I'm not going to change that unless I get a really solid opinion from a lawyer in my state that says I can.
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January 18, 2017, 08:23:10 AM
 #26

I appreciate your ethics. I believe that your business idea is similar in the probate world to "heir finder" services. When a person dies and leaves an estate but has no family, heirs, beneficiaries, co-owners or the like, if no-one can be found then the estate "escheats" to the state. Here in Nevada it escheats (goes by default) to the state for educational purposes.

There are services that search for records of heirs on these types of estates. If they find the heir they charge a fee, usually a percentage, to share the information with that person so that person (usually the next of kin, distant relative) can then claim the money or estate through probate.

Another example is storage units, like on the t.v. shows. If the rent is not paid, then the storage company has to do legal notices, depending upon the state's laws, and after a period of time can put the unit up for auction to satisfy unpaid rent.

Another example is where a tenant abandons and leaves personal property, there are statutory notices that must be done before the property can be sold to satisfy damages to the property or unpaid rent.

As to this particular situation, I would like to discuss it with you further, but privately. Please PM me here and we can continue our conversation as to the details of legally and ethically locating and claiming abandoned BTC or other coins.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin

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January 18, 2017, 09:00:30 AM
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hello lawyer
I'm really curious. Bitcoin actually banned in some countries? can you tell me why it is forbidden? and how it affects
please answer my questions
sincerely thank you
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January 18, 2017, 10:13:18 PM
 #28

I have not researched BTC being banned in some countries. I can guess that certain Governments want to maintain control over transactions of value in order to obtain a tax on those transactions; or to maintain a control over the population. Repressive regimes and fascists are capable of all types of controlling behaviors.

George D. Greenberg, Esq.
www.attorneybitcoin.com
 
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January 18, 2017, 10:31:29 PM
 #29

Yes I am an attorney. If you had bothered to check you would have seen that I have been in practice 24 years. I am transparent and public. Are you? Or are you just hiding and throwing out defamatory statements? 

My Nevada Bar number is 4278

www.attorneybitcoin.com

www.probateattorneyslasvegas.com

Law Offices of George D. Greenberg
7674 W. Lake Mead #245
Las Vegas, Nevada 89128

702 796 5221

Stop on by anytime so I can serve you with a summons and complaint for defamation.

Now to your question/statement: Purchasing Monero with BTC is quite different than purchasing real property with BTC. Although you pose a thought provoking scenario. If you purchase Monero you are still in the crypto world. This is not a taxable event. Talk to a CPA familiar with this and see if you get a different answer.  If you convert virtual currency to a real property purchase this takes the virtual currency out of the virtual currency world, and in my opinion, this would be equivalent to converting to fiat. Any gains previously made on the virtual currency would then become taxable as income, IN MY OPINION.

While I am not a tax attorney I HAVE studied this issue. Problems do arise in the characterization of BTC (and other virtuals.) BTC has elements of fiat, of securities and of personal property/commodities. So it depends upon who is regulating it and for what purposes. The previous question was regarding taxes on a virtual crypto purchasing another virtual crypto.

BTW, have you seen a house for sale that will accept BTC?  I think that would be rare or non-existent.

Respectfully:

George D. Greenberg, Esq.

 

You can buy anything with btc including homes.

https://www.bitpremier.com/5-real-estate
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January 19, 2017, 06:41:17 AM
 #30

I have not researched BTC being banned in some countries. I can guess that certain Governments want to maintain control over transactions of value in order to obtain a tax on those transactions; or to maintain a control over the population. Repressive regimes and fascists are capable of all types of controlling behaviors.

George D. Greenberg, Esq.
www.attorneybitcoin.com
 

In your opinion, why do those country ban Bitcoin? Has Bitcoin to be the cause of crime?
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January 20, 2017, 02:43:09 AM
 #31

Bitcoin is not "criminal" in and of itself anymore than owning a kitchen knife. It is how people choose to use it that can cause concerns for governments. Yes, BTC can be used as a sort of anonymous way of money laundering or extortion but there are many other ways to achieve those illegal goals. It is my understanding however that true anonymity is pretty difficult to achieve.

BTC, like a kitchen knife, can and is used for many laudable functions. It has lower costs, cuts out multiple middlemen, it is very secure, and most importantly, it's just plain cool! Lol!


Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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January 20, 2017, 06:51:06 AM
 #32

Bitcoin is not "criminal" in and of itself anymore than owning a kitchen knife. It is how people choose to use it that can cause concerns for governments. Yes, BTC can be used as a sort of anonymous way of money laundering or extortion but there are many other ways to achieve those illegal goals. It is my understanding however that true anonymity is pretty difficult to achieve.

BTC, like a kitchen knife, can and is used for many laudable functions. It has lower costs, cuts out multiple middlemen, it is very secure, and most importantly, it's just plain cool! Lol!


Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

thank you for your support
the consultant of you will help me very much
you are so kind, I will contact here if you have any other questions
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January 20, 2017, 07:18:43 AM
 #33

I have not researched BTC being banned in some countries. I can guess that certain Governments want to maintain control over transactions of value in order to obtain a tax on those transactions; or to maintain a control over the population. Repressive regimes and fascists are capable of all types of controlling behaviors.

George D. Greenberg, Esq.
www.attorneybitcoin.com
 

In your opinion, why do those country ban Bitcoin? Has Bitcoin to be the cause of crime?

the existence of the bitcoin is very useful for all the good of the poor, middle and rich though, even in the presence of bitcoin is certainly a lot of business opportunities that we can for example by trading, steaking, mining and others,
although there are some countries that prohibit the use of bitcoin, but that does not diminish the value of bitcoin presence was very useful for us all,,, including our presence here through Bitcoin we're in this forum

   
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January 20, 2017, 07:43:30 AM
 #34

i'm not from usa or canada, but how it work when someone use bitcoin directly to buy stuff on the web and he earning them with mining only no trading and no capital gain involved?

he need to pay taxes anyway? and how is IRS going to trace people that do this? how can they we know what he bought especially if  the item is bought from another country, like here on the forum?
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January 20, 2017, 07:44:30 AM
 #35

You should probably PM me about this discussion.

Best:

George D. Greenberg, Esq.
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January 21, 2017, 02:09:00 AM
 #36

Hello AttorneyBitcoin,
It has been a pleasure reading your replies so far. Thanks for taking the time.

People talk about mining BTC and having to pay tax on that based on the daily or monthly cost of Bitcoin as income, but I have not seen anyone mention altcoins mining as income. People who mine at launches are effectively mining at a price of zero is that logical and/or correct?

It is my understanding that if you bought the Monero with BTC then you have not made a conversion to fiat and it is not a taxable event.
Best:
George D. Greenberg, Esq.
www.attorneybitcoin.com

Based on the quote if someone mined Monero at launch for a month then held for half a year and traded to bitcoin they would not be liable for income tax as the mining basis cost was zero, and the conversion to BTC is not a taxable event in your opinion.

Are you advising that anyone who had no initial fiat investment in cryptocurrency aside from their research time (and incidentals such as electricity) who mined alts at launch, and traded cryptocurrencies to other cryptocurrencies who amassed some wealth like we see every day people brag about on twitter and this forum have no tax liability in the US until they cash out into fiat or something with a traditional store of value? (holy hell thats a run-on sentence) I figure most people hope that this is the case as they can just fly under the radar until they decide to come forward into fiat from crypto.

Seems you advise to hold off on paying capital gains until a transaction takes you outside the crypto-crypto bubble. Inevitably a transaction like that would be classed as short term capital gains if you were an active crypto <--> crypto trader. So is it advisable to set aside 33% of any crypto cash outs to pay taxes on?

Thanks,

$MAID & $BTC other than that some short hodls and some long held garbage.
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January 21, 2017, 10:30:32 AM
 #37

I have a question
Is Bitcoin virtual currency recognized by everyone?
it has been legally protected or not?
if my wallet compromised Bitcoin, who can guarantee my rights?
Please rep my question, thanks for your support
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January 24, 2017, 07:18:34 AM
 #38

Sorry for the delay. I've been downloading staking wallets and trying to get masternodes up as well. No easy trick.

I would like to respond to Jasonmoney first then to Canchuacaro1 next.

It is not the tax basis I was addressing, I was addressing the conversion from Monero to BTC. That conversion, in and of itself in my opinion is not a taxable event.

Once you convert the BTC to fiat or use it to purchase good or services, then you are looking at declaring the portion converted or used as income.

Yes, it is my opinion that it is not income until converted, even if a miner used POW and then converted the alt to BTC.

Capital Gains is a separate issue. As to the fascinating POW example you gave, how would you figure the cost basis? You state "zero." Okay lets say it is zero (which is debatable;) you absolutely must itemize and deduct all costs and expenses, including but not limited to the cost of the hardware, electricity, consultations regarding the coin that you mined, fees in mining, transferring, converting, as well as declare LOSES. Just like gamblers we tend to hear about the "killings" people make in coins and not hear about the losses.

There are certainly very clever men and women out there who jump all over POW, mine that coin aggressively, then take profit. However, I think if we look at this realistically there will be measurable loses along the way: Alt coins that plummet in price, that are de-listed, BTC drops in price, hacking losses, ETC.

I am not a tax attorney, I express my legal opinions here. I do not advise to hold off on preparing to pay for income and capital gains taxes and your suggestion to set aside sufficient funds to pay ALL taxes is a prudent one. Everyone doing that? Lol!  It is a matter of risk tolerance. Some of my clients are risk takers and don't mind living with uncertainty; others want certainty and to not worry. Most do this as a hobby or avocation which is fine, but earnings and gains are still subject to tax rules once you convert or start to blur the line between crypto and fiat, especially if this is how you make your living.

Respectfully:

George D. Greenberg, Esq.

www.attorneybitcoin.com

 



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January 24, 2017, 07:25:57 AM
 #39

I have a question
Is Bitcoin virtual currency recognized by everyone?
it has been legally protected or not?
if my wallet compromised Bitcoin, who can guarantee my rights?
Please rep my question, thanks for your support

Bitcoin is NOT recognized by everyone. Many people have never heard of it. If your wallet is compromised you are not going to be covered by FDIC insurance, credit card refunds, bank reimbursement or the like. These warnings have been expressed by several Attorney Generals in the different states. Consumer Protection is a key issue with Bitcoin and virtuals.

There are measures you can take to better secure your coins. Don't keep too much in any coin or wallet. Try to diversify investments and ventures. Use due diligence to better understand the reputation of a coin, a company or a given venture. Educate yourself as to the problems that may arise, or the degree of risk you are taking.

For example with coin wallets you can back up your coins to a separate hard drive. This web site and others are important to assess reputation. Thank you for the question:

Best:

George D. Greenberg, Esq.

Attorneybitcoin.com
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January 24, 2017, 08:25:28 AM
 #40

Thanks for taking the time to answer our questions here.

I have asked this question here some time before but was not able to get much help. When running a bitcoin exchange site, do I need to follow the bitcoin regulations of the countries of all the site's users?

I was looking at localbitcoins.com which is based in Finland but does not engage in trade with New York residents because the site does not comply with the New York bitlicense. This is what really puzzles me; does a non-US based company need to comply with US law (register as MSB and comply with FINCEN etc..) in order to trade bitcoins with US citizens/residents?
Considering that the company has no physical presence in the US I don't understand why localbitcoins needs to comply with the laws of US states.

 
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January 24, 2017, 03:12:14 PM
 #41

Thank you for your reply!

$MAID & $BTC other than that some short hodls and some long held garbage.
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January 25, 2017, 02:14:08 AM
 #42

Thanks for taking the time to answer our questions here.

I have asked this question here some time before but was not able to get much help. When running a bitcoin exchange site, do I need to follow the bitcoin regulations of the countries of all the site's users?

I was looking at localbitcoins.com which is based in Finland but does not engage in trade with New York residents because the site does not comply with the New York bitlicense. This is what really puzzles me; does a non-US based company need to comply with US law (register as MSB and comply with FINCEN etc..) in order to trade bitcoins with US citizens/residents?
Considering that the company has no physical presence in the US I don't understand why localbitcoins needs to comply with the laws of US states.

 

I don't recall your asking your question to me. You may have asked others but that has nothing to do with me. Your question are very broad and cannot be answered simply. Do you currently run a BTC exchange site or are you contemplating doing the same? If you are currently running a BTC exchange then please PM me for private discussion.

It is my understanding that a non U.S. based company, just like a U.S. based company, must comply with U.S. laws both Federal and State. That is a very general answer. Depending upon the laws of a given U.S. State and depending upon how the Bitcoin business operates there may or may not be state regulations to follow.

I hope that helps.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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January 25, 2017, 05:03:38 AM
 #43

I don't recall your asking your question to me. You may have asked others but that has nothing to do with me. Your question are very broad and cannot be answered simply. Do you currently run a BTC exchange site or are you contemplating doing the same? If you are currently running a BTC exchange then please PM me for private discussion.

It is my understanding that a non U.S. based company, just like a U.S. based company, must comply with U.S. laws both Federal and State. That is a very general answer. Depending upon the laws of a given U.S. State and depending upon how the Bitcoin business operates there may or may not be state regulations to follow.

I hope that helps.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com


I am only contemplating running a BTC exchange site and the question was asked before to the forum, not to you specifically. I find it confusing why an online business with no physical presence in the US is is suddenly subject to federal and state laws simply because US residents use the site to trade. Does this apply to other countries as well? If so, then I would need to be registered as a money services business or the equivalent in practically every country in the world.
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January 25, 2017, 05:47:44 AM
 #44

I don't recall your asking your question to me. You may have asked others but that has nothing to do with me. Your question are very broad and cannot be answered simply. Do you currently run a BTC exchange site or are you contemplating doing the same? If you are currently running a BTC exchange then please PM me for private discussion.

It is my understanding that a non U.S. based company, just like a U.S. based company, must comply with U.S. laws both Federal and State. That is a very general answer. Depending upon the laws of a given U.S. State and depending upon how the Bitcoin business operates there may or may not be state regulations to follow.

I hope that helps.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com


I am only contemplating running a BTC exchange site and the question was asked before to the forum, not to you specifically. I find it confusing why an online business with no physical presence in the US is is suddenly subject to federal and state laws simply because US residents use the site to trade. Does this apply to other countries as well? If so, then I would need to be registered as a money services business or the equivalent in practically every country in the world.

I cannot advise on other countries but in my opinion, if someone wishes to do business in the United States then they are availing themselves of the resources of the population, which are considerable, because, among other reasons, we all pay taxes to support our currency, our military, our freedoms and safety in most areas of life, which creates an environment that is conducive to making money. Businesses pay taxes as well as individuals. If a person does not want to do business here they can do business in other countries and not have to worry about the laws, regulations and taxes of this country.   
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January 26, 2017, 08:47:26 AM
 #45

Hi and respect!

What about the current definition of BTC in most of the states? Is it an asset or a currency?

Thank you!

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January 26, 2017, 09:55:40 PM
 #46

Hi there, could you please tell me if it is legally possible to run a sports betting website that only accepts bitcoin if I reside in the US?

If so, could you please provide what would be necessary, such as hosting the website in another country, blocking US players, etc,

Thank you!

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January 27, 2017, 08:28:40 AM
 #47

Hi there, could you please tell me if it is legally possible to run a sports betting website that only accepts bitcoin if I reside in the US?

If so, could you please provide what would be necessary, such as hosting the website in another country, blocking US players, etc,

Thank you!

It just won't work as sports betting, as far as I know, is only legal in Nevada. It does not matter that you are dealing only in BTC, they will shut you down. If it is a business in the U.S. and if you are only doing business in other countries, well, I just don't really know the answer to that. Any input from anyone else out there?  You could hire an attorney to investigate it but I am not hopeful that the news would be good. Now, you could possibly run one just in Nevada, for Nevada residents only, and try to get approval from the Gaming Control Board.

There is a new law in Nevada where you can accept money from out of state into a business entity, that does sport betting. But you cannot tell the investors what you have wagered on until after you have placed the bets. In addition you need to get a sports book to accept your business entity as a customer, not an easy thing to do. If you want to talk to me more about this venture PM me here please or call my office.

I cannot advise you on the legalities in other countries, it is outside of the scope of my practice.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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January 27, 2017, 08:32:40 AM
 #48

Hi and respect!

What about the current definition of BTC in most of the states? Is it an asset or a currency?

Thank you!

What a great question! Hell, I don't know! Lol! Most of the regulators are not sure either. It is definitely not considered a currency in any state as far as I know. It is not defined at all in some states. Other states hold it to be personal property. I have not read the laws in New York, theirs is the most developed.

If you could give me some context it would help. You can also search State Attorney Generals statements on Bitcoin.

Hope that helps.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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January 28, 2017, 11:43:22 AM
 #49

OK thank you for taking the time to answer such a question!



Respect!




Hi and respect!

What about the current definition of BTC in most of the states? Is it an asset or a currency?

Thank you!

What a great question! Hell, I don't know! Lol! Most of the regulators are not sure either. It is definitely not considered a currency in any state as far as I know. It is not defined at all in some states. Other states hold it to be personal property. I have not read the laws in New York, theirs is the most developed.

If you could give me some context it would help. You can also search State Attorney Generals statements on Bitcoin.

Hope that helps.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com


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February 07, 2017, 08:21:06 PM
 #50

Are business that accept Bitcoin as payment subject to KYC regulations? For example, if I go to the store and pay with cash they don't receive any information about who I am. Does this hold true for Bitcoin as well? Or would they be required to get my identity?

To take it one step further, if I've created a point-of-sales solution that allows merchants to accept Bitcoin, am I subject to KYC/AML? Do I need to identify every user even if the funds don't go through me? I'll never touch the money, it will go directly from the customer to the merchant, I will simply provide software that allows that to occur seamlessly.

Thanks,
Johnny
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February 15, 2017, 05:39:18 AM
 #51

Are business that accept Bitcoin as payment subject to KYC regulations? For example, if I go to the store and pay with cash they don't receive any information about who I am. Does this hold true for Bitcoin as well? Or would they be required to get my identity?

To take it one step further, if I've created a point-of-sales solution that allows merchants to accept Bitcoin, am I subject to KYC/AML? Do I need to identify every user even if the funds don't go through me? I'll never touch the money, it will go directly from the customer to the merchant, I will simply provide software that allows that to occur seamlessly.

Thanks,
Johnny

As always, it depends. If the business that is accepting BTC as payment is a money service business, such as a check cashing store or a business that deals in a lot of cash, such as an automobile dealership or big nightclub, then these businesses are going to be subject to FinCEN regulations. It doesn't matter if it is cash or BTC. The degree of tracking and reporting varies and is dependent upon the amount of money for any given transaction; but they still must have a compliance program in place in one form or another.

As to your interesting software, it depends. If you are selling the software and that is the end of the deal, then no, you are not subject to compliance. If you remain involved in the transmission and are taking a fee for each transaction, then you might be. I would have to research that further. If you want to follow up on that PM me here please. Great questions.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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February 17, 2017, 04:45:42 PM
 #52

Thanks for doing this. My question is that is it fine if I don't pay taxes on bitcoin payments converted to fiat in smaller amounts ?

I haven't transacted much and only do about 100-200$ conversion once in 5-6 months. I don't typically report it on my taxes because its a very small amount. Is there anything that can go wrong doing so ?

I am based in US.
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February 18, 2017, 08:15:34 AM
 #53

Thanks for doing this. My question is that is it fine if I don't pay taxes on bitcoin payments converted to fiat in smaller amounts ?

I haven't transacted much and only do about 100-200$ conversion once in 5-6 months. I don't typically report it on my taxes because its a very small amount. Is there anything that can go wrong doing so ?

I am based in US.

Hello Sir:

I guess I have to say it is not fine. But let's analyze this a bit more. Most income received from most sources is taxable. There are some things that are exempt from income taxes such as inheritance, or income from tax exempt bonds; but if you receive income from BTC then you should declare it as such as part of your entire gross income.

But let's look a little bit closer. You did not state how you obtained the BTC. That is very important. Almost all costs spent in order to obtain the BTC are deductible from your entire gross income. For example; if you spent five hundred dollars on mining equipment, that equipment as well as the cost of electricity needed to run it are deductible. If you obtained the BTC as payment for services, then any costs associated with providing those services are also deductible.

I hope that helps. If you would like to give me more specifics I can analyze this further. 

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

Lawyer for Bitcoin and Alternate Coins.
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February 20, 2017, 09:50:14 PM
 #54

Got a simple question:

Cashing out BTC from a BTC ATM that, as means of identification, requests your phone number, will indicate to some institutions that the person who own that phone number has to pay taxes on that?

How this BTC ATM works?
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February 22, 2017, 03:06:04 AM
 #55

Thanks for doing this. My question is that is it fine if I don't pay taxes on bitcoin payments converted to fiat in smaller amounts ?

I haven't transacted much and only do about 100-200$ conversion once in 5-6 months. I don't typically report it on my taxes because its a very small amount. Is there anything that can go wrong doing so ?

I am based in US.

Hello Sir:

I guess I have to say it is not fine. But let's analyze this a bit more. Most income received from most sources is taxable. There are some things that are exempt from income taxes such as inheritance, or income from tax exempt bonds; but if you receive income from BTC then you should declare it as such as part of your entire gross income.

But let's look a little bit closer. You did not state how you obtained the BTC. That is very important. Almost all costs spent in order to obtain the BTC are deductible from your entire gross income. For example; if you spent five hundred dollars on mining equipment, that equipment as well as the cost of electricity needed to run it are deductible. If you obtained the BTC as payment for services, then any costs associated with providing those services are also deductible.

I hope that helps. If you would like to give me more specifics I can analyze this further. 

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

Lawyer for Bitcoin and Alternate Coins.

Thanks for the reply. Well its mostly money I get from campaigns or just helping people out online, hence not a lot of amount. I can however declare as btc obtained by helping people out with some modelling, and then justify money spent on the parts to make prototypes first.

Would that be enough to get it exempted ?
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February 24, 2017, 04:56:01 AM
 #56

Got a simple question:

Cashing out BTC from a BTC ATM that, as means of identification, requests your phone number, will indicate to some institutions that the person who own that phone number has to pay taxes on that?

How this BTC ATM works?

I suspect that it has much more to do with KYC or "Know Your Client" a common term used for complying with United States Treasury Departments anti money laundering concerns. Every entity dealing with potentially larger amounts of cash or cash as a business has reporting requirements. For example any transactions over $1,000.00 must be kept track of. In addition these businesses are supposed to show some sort of effort or procedure in place in collecting information on who they are dealing with. The more cash, the more information they want. A simple phone number likely means a relatively low amount of cash. If you go on Coinbase or Poloniex, the higher the amount of money you want to deal in the more information they want from you. I seriously doubt that asking you for a phone number has anything to do with taxation.
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February 24, 2017, 04:58:52 AM
 #57

Thanks for doing this. My question is that is it fine if I don't pay taxes on bitcoin payments converted to fiat in smaller amounts ?

I haven't transacted much and only do about 100-200$ conversion once in 5-6 months. I don't typically report it on my taxes because its a very small amount. Is there anything that can go wrong doing so ?

I am based in US.

Hello Sir:

I guess I have to say it is not fine. But let's analyze this a bit more. Most income received from most sources is taxable. There are some things that are exempt from income taxes such as inheritance, or income from tax exempt bonds; but if you receive income from BTC then you should declare it as such as part of your entire gross income.

But let's look a little bit closer. You did not state how you obtained the BTC. That is very important. Almost all costs spent in order to obtain the BTC are deductible from your entire gross income. For example; if you spent five hundred dollars on mining equipment, that equipment as well as the cost of electricity needed to run it are deductible. If you obtained the BTC as payment for services, then any costs associated with providing those services are also deductible.

I hope that helps. If you would like to give me more specifics I can analyze this further. 

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

Lawyer for Bitcoin and Alternate Coins.

Thanks for the reply. Well its mostly money I get from campaigns or just helping people out online, hence not a lot of amount. I can however declare as btc obtained by helping people out with some modelling, and then justify money spent on the parts to make prototypes first.

Would that be enough to get it exempted ?

It's not a matter of exemption, it is a matter of your overall tax picture. You can absolutely deduct money spent for parts for prototypes as a cost of business. This offsets from your income. You are getting the idea! 
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February 24, 2017, 09:43:07 PM
 #58

Got a simple question:

Cashing out BTC from a BTC ATM that, as means of identification, requests your phone number, will indicate to some institutions that the person who own that phone number has to pay taxes on that?

How this BTC ATM works?

I suspect that it has much more to do with KYC or "Know Your Client" a common term used for complying with United States Treasury Departments anti money laundering concerns. Every entity dealing with potentially larger amounts of cash or cash as a business has reporting requirements. For example any transactions over $1,000.00 must be kept track of. In addition these businesses are supposed to show some sort of effort or procedure in place in collecting information on who they are dealing with. The more cash, the more information they want. A simple phone number likely means a relatively low amount of cash. If you go on Coinbase or Poloniex, the higher the amount of money you want to deal in the more information they want from you. I seriously doubt that asking you for a phone number has anything to do with taxation.
For example, there are some BTC ATMs that for transactions up to US1500 require a phone number. However for transactions over US5000 they require your ID and a (your) phone number.

It's not really clear whether those transaction limits are meant by day, week, month etc. Nor it's clear if by transaction is just meant cashing out or the whole action of buying and selling BTC?

I have also noted that (ATMs) have a camera pointing to you, altough it's not clear to me whether they are recording at all the time or not?

If a person cash out their BTC on a regular basis from a BTC ATM after what amount of money this regular cash out can be seen as an income and become "prey" of the United States Treasury Department?

To answer to your last sentence "I seriously doubt that asking you for a phone number has anything to do with taxation."

Well, during this kind of transactions the phone number is needed as means of confirmation of the purchased or sale of BTC. However, if for example, every month you cash out US1500 from an BTC ATM, I guess the ATM owner will have to provide (also )your data to the United States Treasury Department, and they will start to investigate about you right from your personal information, i.e the phone number you provided, and maybe they have the image of your face throught the ATM and see if you declared to the USTD your extra income and therefore pay taxes on it?


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February 26, 2017, 08:20:36 AM
 #59

Yes, as a United States Citizen I pay my taxes. I'm not here to advise on how to avoid payment of taxes. In addition I'm not a C.P.A. nor am I a tax attorney. I have already given my opinion to you. If you want to explore it further then you would indeed need to hire a C.P.A. or a tax attorney to help you.
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February 26, 2017, 10:57:30 PM
 #60

Thank you so much for replying to my question. I have one more question if you have the time!

Does providing a virtual currency -> virtual currency conversion service subject myself kyc/aml regulations? For example, letting users convert from Bitcoin to Ethereum and charging a small fee, do I need to identify the user? I would not be interacting with fiat currency.
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February 28, 2017, 08:06:01 AM
 #61

Thank you so much for replying to my question. I have one more question if you have the time!

Does providing a virtual currency -> virtual currency conversion service subject myself kyc/aml regulations? For example, letting users convert from Bitcoin to Ethereum and charging a small fee, do I need to identify the user? I would not be interacting with fiat currency.

That is a GREAT question. The answer is maybe, but I doubt it. It may depend upon how you structure the business venture. For example if you are acting as a business entity such as an LLC or a Corporation then you are more likely to need to comply. If you are doing it for yourself only then you are not handling fiat directly and it becomes less likely. Any fees you earn would be income subject to income tax, if the fees were in fiat that is. If not then when you convert the fee to fiat it then becomes taxable as income. Any costs and expenses would be deductible.

When  you say you collect a small fee, is the fee collected in a virtual coin? That would also remove you one step further away from being regulated as a money transmitter. You can PM me if you want to discuss further.

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George D. Greenberg, Esq.
www.attorneybitcoin.com
 
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March 10, 2017, 07:19:51 AM
 #62

Please advise on the following. In a legal matter where the subject matter is a breach of contract and the funds at issue have been deposited in a Bitcoin a/c , will a court be able to "freeze/ preserve" that specific a/c and secure the funds therein ie preserve/secure the fund value at that point in time until the contractual legal issue has been resolved ? (I am fully aware that the laws pertaining to certain countries may not apply in mine).
Your kind reply will be appreciated.
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March 14, 2017, 04:07:05 AM
 #63

Answered in PM.
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March 17, 2017, 04:51:50 PM
 #64

Would be lovely if you could spark and moderate discussion on the forums about my NY Lawsuit.

There is a lot of misunderstanding of it: http://www.article78againstnydfs.com

I have asked for the court transcripts of the first hearing and will post them as soon as they send them to me.

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March 18, 2017, 07:53:04 AM
 #65

Please forgive me I do not have the time to become involved in that discussion. i wish you the best.

George D. Greenberg, Esq.
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March 19, 2017, 06:14:38 AM
 #66

The problem is that many people don't understand it and don't understand why it's important to donate.

For example, Nick Spanos of the Bitcoin Center explain it simply in under a minute:
https://twitter.com/A78gnstNYDFS/status/843340008903901185


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April 26, 2017, 01:06:03 PM
 #67


Hello George, thanks for creating this thread, hope you don't mind me bumping it.

What's your expertise on proceeds from bitcoin gambling sites winnings? Assuming online gambling is legal in ones state/jurisdiction, but the gambling site itself is not registered/licensed anywhere - would such proceeds be deemed as illegal?

On one hand, I'm guessing that it's not the user's responsibility to check whether site is operating legally. On the other hand, anyone could create gambling site overnight and use it for money laundering.



Another one:

Is "51% attack" illegal (by US laws)? If a large bitcoin miner gains enough hashpower to perform a double-spend, would it be seen as a criminal behaviour? After all, there's no "hacking" involved, nor any other unauthorised access of information, and all the participants should be aware that Bitcoin protocol allows it to happen (all network operates on hope that hashpower will stay decentralised).

I appreciate there may not be an easy answer, as there's no precedent to it, but just curious on your opinion.

Personally, I don't see anything illegal in the act itself, but there's definitely an intent to deprive users/entities of their bitcoin wealth.

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April 27, 2017, 05:39:31 AM
 #68


Hello George, thanks for creating this thread, hope you don't mind me bumping it.

What's your expertise on proceeds from bitcoin gambling sites winnings? Assuming online gambling is legal in ones state/jurisdiction, but the gambling site itself is not registered/licensed anywhere - would such proceeds be deemed as illegal?

On one hand, I'm guessing that it's not the user's responsibility to check whether site is operating legally. On the other hand, anyone could create gambling site overnight and use it for money laundering.



Another one:

Is "51% attack" illegal (by US laws)? If a large bitcoin miner gains enough hashpower to perform a double-spend, would it be seen as a criminal behaviour? After all, there's no "hacking" involved, nor any other unauthorised access of information, and all the participants should be aware that Bitcoin protocol allows it to happen (all network operates on hope that hashpower will stay decentralised).

I appreciate there may not be an easy answer, as there's no precedent to it, but just curious on your opinion.

Personally, I don't see anything illegal in the act itself, but there's definitely an intent to deprive users/entities of their bitcoin wealth.

I have no expertise on gaming law as to BTC or any other gaming endeavor, however the user is responsible to know whether
his actions are legal or not.

As to 51% attack I agree that if there is intent to steal or defraud or destroy or manipulate for personal gain that it might be deemed an illegal act and the perpetrator could be subject to civil or criminal prosecution.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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May 04, 2017, 03:04:15 AM
 #69

is it illegal to run my bisiness without a licence>? a gaming website
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May 15, 2017, 07:25:08 AM
 #70

Your question is too general for me to answer effectively. Assuming you have a gaming web site in a state that allows it, you will need a business license and perhaps other types of licenses related to gaming.

Let's assume your gaming web site is legal and you have all the licenses required; is your question then whether or not laws related to gaming apply to BTC as the medium of wager? There have been many such sites closed down by the Feds and by States so I do not believe it is an escape hatch.

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May 21, 2017, 02:55:47 AM
 #71

George, thanks for this. NH looks like it will explicitly define BTC as not a MSB https://legiscan.com/NH/bill/HB436/2017 once governor signs. Sounds like Nevada is in same boat. For these states, if one were to operate a cash>bitcoin ATM, drawing from a hot wallet (not an exchange), I assume one still needs to register with Fincen. In doing so what is the simplest way to comply with AML/KYC? For example requiring all transactions above a certain $ amount to supply a phone number or ID? Would like it to be simple from the customer and the ATM owner perspective. Does below a certain $ amount require no KYC procedure that the customer must supply?
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May 25, 2017, 04:21:03 AM
 #72

How ownership of bitcoins is defined? I mean technically it is just a knowledge of the private key. What if many people has/know the wallet private key but not all of them ever used it?

For example:
Some non-US person John (he is not very good with computers) ask his son Sam to buy some bitcoins for him, and Sam is a US tax resident.
Now assume that a Sam traded some time after that and earn more bitcoin/altcoins from his father bitcoins assuming that he manage his father capital. Does Sam need to pay US taxes in this case?
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May 25, 2017, 06:37:13 AM
 #73

George, thanks for this. NH looks like it will explicitly define BTC as not a MSB https://legiscan.com/NH/bill/HB436/2017 once governor signs. Sounds like Nevada is in same boat. For these states, if one were to operate a cash>bitcoin ATM, drawing from a hot wallet (not an exchange), I assume one still needs to register with Fincen. In doing so what is the simplest way to comply with AML/KYC? For example requiring all transactions above a certain $ amount to supply a phone number or ID? Would like it to be simple from the customer and the ATM owner perspective. Does below a certain $ amount require no KYC procedure that the customer must supply?

That's a lot of questions, lol! There are answers to all of them that have been researched and labored over Yes, you would still need to register with FinCEN and make a good faith effort to comply with AML and KYC. As to the other information, well, I paid dearly to get it so I charge to share it. You are welcome to contact me via PM. BTW, I'm not convinced that exchanging cash for BTC and the reverse is not acting as a money transmitter. Yes, there are some educated guesses that have to be made as the regulator's are not sure either. However there are steps that can be taken preemptively to give you some cover, at least for awhile.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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May 25, 2017, 06:40:42 AM
 #74

How ownership of bitcoins is defined? I mean technically it is just a knowledge of the private key. What if many people has/know the wallet private key but not all of them ever used it?

For example:
Some non-US person John (he is not very good with computers) ask his son Sam to buy some bitcoins for him, and Sam is a US tax resident.
Now assume that a Sam traded some time after that and earn more bitcoin/altcoins from his father bitcoins assuming that he manage his father capital. Does Sam need to pay US taxes in this case?

Whomever claimed ownership of the coins would have to pay taxes on any gains, but ONLY when the owner converts (or has someone  on his behalf convert,) the BTC to Fiat.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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May 25, 2017, 11:59:22 PM
 #75

I have a question about Coinbase and the IRS.


Say someone is accumulating cryptocurrency at Coinbase and the value sold and used to buy back more crypto or transferred to other wallets is less than $1k, nothing has been sent back to a bank account or withdrawn as cash. I assume there are hundreds of thousands of people (with a fairly low-level of transfer activity) in this category. How likely is the IRS to target a person like this for an audit if they do not report this activity?

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May 26, 2017, 07:15:47 AM
 #76

The answer is: Not likely.

However, that does not make it right. I'm a Citizen of this Country. Taxes are not the enemy.

Concentration of wealth and power and failure to fairly tax the upper one half of one percent is the problem.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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May 27, 2017, 03:56:15 AM
 #77

George,

You should explain to the folks what the two plea deals in Missouri and Detroit means for bitcoiners in the US and why they should be thinking about the future.   
By the way, my lawyer filed a new amended complaint: http://article78againstnydfs.com/raw.php
Should be a good read.

Regards,
Theo

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May 27, 2017, 04:28:18 AM
 #78

Question: If I don't own a business and Bitcoin is my 'hobby' so to speak, how do I file my taxes when the profit is generated online, there is no record of that, and is on the basis of “for sport or recreation, not to make a profit". This would mean mostly Bitcoin sportsbetting and very rarely freelancing (which is basically doing odd jobs for people on this forum like many others do.)
Thank you in advance!                             

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May 27, 2017, 07:58:48 AM
 #79

i have another question regarding minig, what is considerer a business activity, there is a threshold to overcome to make your activity a business level one?

for example there must be a difference between someone running a RIG for mining and someone else running a 10-100 rig farm, the first one as i see it should not be considered a business operation right?

otherwise buy this logic everyone with a gpu is someone running a business activity because he can mine and generate an income, and it doesn't make any sense...
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May 29, 2017, 07:33:42 AM
 #80

Question: If I don't own a business and Bitcoin is my 'hobby' so to speak, how do I file my taxes when the profit is generated online, there is no record of that, and is on the basis of “for sport or recreation, not to make a profit". This would mean mostly Bitcoin sportsbetting and very rarely freelancing (which is basically doing odd jobs for people on this forum like many others do.)
Thank you in advance!                             

First of all, wagering online, unless it is legal in your state and conducted in your state, is not a legal activity whether you use BTC or fiat.

I think that the tax man would view the calling of making a profit with BTC trading or BTC businesses a hobby or recreation and therefore not subject to taxation as a thinly veiled attempt to avoid paying taxes.


Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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May 29, 2017, 07:42:44 AM
 #81

i have another question regarding minig, what is considerer a business activity, there is a threshold to overcome to make your activity a business level one?

for example there must be a difference between someone running a RIG for mining and someone else running a 10-100 rig farm, the first one as i see it should not be considered a business operation right?

otherwise buy this logi everyone with a gpu is someone running a business activity because he can mine and generate an income, and it doesn't make any sense...

If I am using a cpu, gpu or asic to mine bitcoin, when I convert it to fiat it is then considered income. In filing taxes you would be well advised to itemize and deduct everything that went into that mining including hardware, software, electricity, consultants and fees in the transfer and selling of the coins.

I can call it a hobby, recreation or business, it doesn't matter, I am engaged in money making activity that brings me income. Income is taxable. There are of course always exceptions, but not in the example given.

A threshold based on the volume of the activity is not really a good measure as to whether or not a business is being operated. Big or small it is all business. But typically those involved in a business venture have a business entity such as a corporation, although you can be a sole proprietor or have a joint venture or general  partnership, and also generally have a tax payer identification number and a license or licenses to conduct the business .

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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May 29, 2017, 05:26:21 PM
 #82

Hi, I have a question. What happens to the taxes if I buy amazon gift cards online by re-seller or purse.io and then use them to buy actual goods off amazon ? Also what if I have a virtual bitcoin debit card, and use it to buy online.
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May 30, 2017, 05:43:48 AM
 #83

i have another question regarding minig, what is considerer a business activity, there is a threshold to overcome to make your activity a business level one?

for example there must be a difference between someone running a RIG for mining and someone else running a 10-100 rig farm, the first one as i see it should not be considered a business operation right?

otherwise buy this logi everyone with a gpu is someone running a business activity because he can mine and generate an income, and it doesn't make any sense...

If I am using a cpu, gpu or asic to mine bitcoin, when I convert it to fiat it is then considered income. In filing taxes you would be well advised to itemize and deduct everything that went into that mining including hardware, software, electricity, consultants and fees in the transfer and selling of the coins.

I can call it a hobby, recreation or business, it doesn't matter, I am engaged in money making activity that brings me income. Income is taxable. There are of course always exceptions, but not in the example given.

A threshold based on the volume of the activity is not really a good measure as to whether or not a business is being operated. Big or small it is all business. But typically those involved in a business venture have a business entity such as a corporation, although you can be a sole proprietor or have a joint venture or general  partnership, and also generally have a tax payer identification number and a license or licenses to conduct the business .

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com


there must be a threshold where the IRS ignore the amount, just to avoid wasting time with peanuts money, and with this kind of situation that i explained

for chasing someone that is not going to declare his little income, they need to have money themselves, i mean it's not free, to trace someone who is alleged to be a evasor
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May 30, 2017, 07:01:34 AM
 #84

Hi, I have a question. What happens to the taxes if I buy amazon gift cards online by re-seller or purse.io and then use them to buy actual goods off amazon ? Also what if I have a virtual bitcoin debit card, and use it to buy online.

Excellent question. Yes, this has been an ongoing discussion with several people and a question I posed in general a few weeks ago.

I believe that in the context of this current discussion what you are referring to is using BTC to purchase goods or services instead of converting to fiat, and whether there is any difference in the tax treatment.

My short answer in no, there is no difference. Let us discuss. If I make furniture and then sell it, after the costs involved have been deducted, if I make a profit, then that profit is income and I would pay income tax on that profit. (As a caveat, costs and expenses are deducted in different ways at different times, but most are itemized at the end of the year on my tax return.)

It is the same if I mine BTC, or earn it in another way from my efforts. It becomes income in the eyes of the tax men whenl I convert it to fiat. What if I use the BTC earned to purchase something that I would otherwise have paid fiat for? Ah, that is the question then.

I say at that point you have done the same thing as you would have done had you converted it to fiat. It then becomes income and is subject to income tax.

I am always pushed on this point by people. Some argue that it is a barter and it may very well be and that may change the taxation dynamics.

What is your risk tolerance? That is always the question. How do you feel about paying your taxes? Are you a citizen? Do you and your family benefit from the things that our taxes pay for? There is an implied imperative as a citizen to participate and to follow the rule of law.

I hope I have answered your question or at least given you something meaningful to ponder.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
 
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May 30, 2017, 07:04:15 AM
 #85

i have another question regarding minig, what is considerer a business activity, there is a threshold to overcome to make your activity a business level one?

for example there must be a difference between someone running a RIG for mining and someone else running a 10-100 rig farm, the first one as i see it should not be considered a business operation right?

otherwise buy this logi everyone with a gpu is someone running a business activity because he can mine and generate an income, and it doesn't make any sense...

If I am using a cpu, gpu or asic to mine bitcoin, when I convert it to fiat it is then considered income. In filing taxes you would be well advised to itemize and deduct everything that went into that mining including hardware, software, electricity, consultants and fees in the transfer and selling of the coins.

I can call it a hobby, recreation or business, it doesn't matter, I am engaged in money making activity that brings me income. Income is taxable. There are of course always exceptions, but not in the example given.

A threshold based on the volume of the activity is not really a good measure as to whether or not a business is being operated. Big or small it is all business. But typically those involved in a business venture have a business entity such as a corporation, although you can be a sole proprietor or have a joint venture or general  partnership, and also generally have a tax payer identification number and a license or licenses to conduct the business .

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com


there must be a threshold where the IRS ignore the amount, just to avoid wasting time with peanuts money, and with this kind of situation that i explained

for chasing someone that is not going to declare his little income, they need to have money themselves, i mean it's not free, to trace someone who is alleged to be a evasor

I think you have answered your own question. But getting away with it does not make it the right thing to do. I'm not a FinCEN investigator so I don't have an answer as to what raises red flags. But the more red flags there are, the more suspicious they get.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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June 03, 2017, 08:30:08 PM
 #86

Hi,

Kudos for what you're doing here! I got paid with a couple btc sometime back. I was thinking of selling for cash using localbitcoins but I was reading earlier today, bitcoin.com I think, that increasingly sellers are being arrested for "illegal money transmission" by law enforcement posing as buyers. At least two of them involved illegal drugs so that may explain some of it. My question is should I be concerned?

Also, way back, we're talking 80s-90s, Lambda Legal had a self-help manual out at a time when homosexuality was criminalized by sodomy laws in many states. One piece of advise it had was, if you were going to pick up someone in any place that wasn't inside an LGBT commercial establishment or private property, like the sidewalk outside a bar where you met this person, to ask before any physical contact occurred - do you work for any law-enforcement? To avoid getting arrested for solicitation/whatever. I don't see this being a viable protective tactic for a drug dealer (otherwise we wouldn't have a show called The Wire), but what about if you are selling a couple btc?  Is there a magic number of transactions that sets apart a "trader" from a joe/schmoe occasional seller/buyer? Or anyone who sells even half a coin counts as engaging in "money transmission"? (I didn't think I would be asking questions like this in 2017!) Does it matter that I am not even advertising a trade on localbitcoins but will be answering an ad of a buyer?

Thanks in advance.
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June 05, 2017, 05:52:15 AM
 #87

As long as you are doing it for yourself and not acting as a broker for other people then there is no problem. You are not acting as a money transmitter under these facts. You have nothing to worry about. Now, when you receive the cash for the BTC, then that is considered income and should be reported as such on your year end tax return.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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June 06, 2017, 02:09:48 AM
 #88

Thanks, the broker function definition is a very useful and reassuring distinction. Taxes - yes, that and death.
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June 06, 2017, 02:45:20 AM
 #89

I'm happy to have helped you.

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June 07, 2017, 09:49:40 AM
 #90

Hi Mr. Greenberg,

This is a tax related question. I'm not looking for legal counsel or financial counsel so you will not be bound in any way from your response.

Scenario... (using rounded numbers just to keep the math simple)

On Jan. 1, 2017 I purchase 250,000 bitshares (BTS) at a cost of $27,500

I begin trading BTS for BTC then back to BTS for a gain of $1,000 daily

On Jan. 2, 2018 I begin withdrawing $1,000 daily to fiat as a "Long Term Capital Asset" since it was held for more than one year.

Having no taxable income the capital gains tax is 0% for the lowest IRS income tax bracket.

Question 1) Do I have to report the $1,000 daily gain as taxable income?

Question 2) If the answer to Q1 is "yes", then that puts me in the $365,000 annual income tax bracket. When I begin withdrawal of the $1,000 net daily (after a year and one day)... do I also have to pay "capital Gains Tax"?

Question 3) If I have to claim the $1,000 daily gain as "income" AND ALSO pay "capital gains tax", isn't this double taxation?

I hope this is clear.

In summary... Is the $1,000 daily gain considered taxable "income" or if held more than a year considered "capital gains"?

Thank you.
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June 07, 2017, 09:48:30 PM
 #91

In developing countries bitcoin transactions are not taxable since the government does not have structures in place to regulate the sector. How can this be an advantage to miners in this parts of the world and what could be the possible illegalities after new laws are introduced

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June 08, 2017, 06:19:28 AM
 #92

Hi Mr. Greenberg,

This is a tax related question. I'm not looking for legal counsel or financial counsel so you will not be bound in any way from your response.

Scenario... (using rounded numbers just to keep the math simple)

On Jan. 1, 2017 I purchase 250,000 bitshares (BTS) at a cost of $27,500

I begin trading BTS for BTC then back to BTS for a gain of $1,000 daily

On Jan. 2, 2018 I begin withdrawing $1,000 daily to fiat as a "Long Term Capital Asset" since it was held for more than one year.

Having no taxable income the capital gains tax is 0% for the lowest IRS income tax bracket.

Question 1) Do I have to report the $1,000 daily gain as taxable income?

Question 2) If the answer to Q1 is "yes", then that puts me in the $365,000 annual income tax bracket. When I begin withdrawal of the $1,000 net daily (after a year and one day)... do I also have to pay "capital Gains Tax"?

Question 3) If I have to claim the $1,000 daily gain as "income" AND ALSO pay "capital gains tax", isn't this double taxation?

I hope this is clear.

In summary... Is the $1,000 daily gain considered taxable "income" or if held more than a year considered "capital gains"?

Thank you.

You need a Certified Public Accountant to answer these questions.
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June 08, 2017, 06:20:59 AM
 #93

In developing countries bitcoin transactions are not taxable since the government does not have structures in place to regulate the sector. How can this be an advantage to miners in this parts of the world and what could be the possible illegalities after new laws are introduced

I don't advise on laws and strategies in other countries.
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June 13, 2017, 06:36:56 PM
 #94

It is my understanding that if you bought the Monero with BTC then you have not made a conversion to fiat and it is not a taxable event.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com




This is brilliant and the first time that I've seen a good answer on the crypto -> crypto currency conversion. Just to break this down further let's say someone does the following:

1) Acquire DCR (so cost basis is $10)  
2) Trades the DCR for BTC after 1 year
3) Trades the BTC for ETH within 1 week
4) After 1 week sells the ETH for $500

Using the concept of "like kind" transaction is the only taxable event (4), when you convert the crypto over to $ for a profit of $490? Also since the period from (1) to (4) is >1 year is it seen as long-term capital gains?

thanks!

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June 14, 2017, 06:49:17 AM
 #95

I appreciate the question and example however I am not a tax attorney and am not a CPA. You will have to go to one of them to figure this one out. Best: GDG
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June 16, 2017, 02:55:51 AM
 #96

Ok - it's odd we can't get a real tax attorney, or CPA on this board to answer these questions .
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June 16, 2017, 06:11:07 AM
 #97

I hardly think it is odd. You have asked a complex question. If you can't find a tax attorney or CPA on this board who will answer your question, go hire one.
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June 17, 2017, 11:42:29 AM
 #98

Hello Mr. Greenberg J.D. I am planning on starting up a business using bitcoins by essentially making money through the good pricing and robust exchange of goods to btc (such as having a good ratio on btc to walmart card, or btc to said property etc). I live in a relatively small/medium (pop 300,000) town with a lot of good old boys and money. I want this to be legitimate as my family are rather neophytes in this very small and established community and I feel like me and mine still have dues to pay "before we're full members of the club", if you get my drift sir.

I have done some fair/surface amount of diligence into federal and state laws but it seems like everything is in its infancy stages with all three branches of government confused as to what to do and no judges wanting to determine important precedents yet. From my understanding you should report your BTC as property to the IRS but there is no commercial law.. how are my earnings taxed? How is this fair financially from my viewpoint when another federal judge defined BTC as "funds" (vague) and the currency itself is regulated by the futures trading commission. Wouldn't the FTC have the final say in what will happen next? And from an honest fiduciary standpoint if it's already being regulated as "digital currency" why should I be taxed on currency I've already earned fairly through my salary and file it as property? Honestly it sounds like a lot of passing the buck to me and there is no definitive legal framework even in place on any level.. federal or state.


Also on a more concrete practical note if I may get in a 2nd more simple question.. this business will essentially be providing a service. I will be providing my knowledge of the market as well as the BTC system to act as portfolio manager and broker. I am confident in this system and with amounts of more than $5000 I'm sure  me as well as my clients would like a legal retainer agreeing to some fixed amount of risk that kinda covers my end but also legally gives me some type of fiduciary responsibility with the man's money so that I am covered and in the event I make a profit of more than $100k or something like or lose whatever difference that ill guarantee that as to attract attention I would have proof of said responsibility for services rendered and that I'm doing everything by the book.

BTW you may have guessed but that state is GA... would registering it as an llc or something like that be MORE RISKY practically in that it would draw attention or less in that it would appear i have been completely transparent. 

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June 17, 2017, 11:53:29 AM
 #99

It is my understanding that if you bought the Monero with BTC then you have not made a conversion to fiat and it is not a taxable event.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com




This is brilliant and the first time that I've seen a good answer on the crypto -> crypto currency conversion. Just to break this down further let's say someone does the following:

1) Acquire DCR (so cost basis is $10)  
2) Trades the DCR for BTC after 1 year
3) Trades the BTC for ETH within 1 week
4) After 1 week sells the ETH for $500

Using the concept of "like kind" transaction is the only taxable event (4), when you convert the crypto over to $ for a profit of $490? Also since the period from (1) to (4) is >1 year is it seen as long-term capital gains?

thanks!



But eventually you will have to declare it as something or turn it into fiat or straight deposit into an exchange if you want easier liquidity of your assests.. Am I missing something where?

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June 17, 2017, 11:47:17 PM
 #100

You may PM me.

George D. Greenberg

www.attorneybitcoin.com
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June 17, 2017, 11:56:16 PM
 #101

Hello Mr. Greenberg J.D. I am planning on starting up a business using bitcoins by essentially making money through the good pricing and robust exchange of goods to btc (such as having a good ratio on btc to walmart card, or btc to said property etc). I live in a relatively small/medium (pop 300,000) town with a lot of good old boys and money. I want this to be legitimate as my family are rather neophytes in this very small and established community and I feel like me and mine still have dues to pay "before we're full members of the club", if you get my drift sir.

I have done some fair/surface amount of diligence into federal and state laws but it seems like everything is in its infancy stages with all three branches of government confused as to what to do and no judges wanting to determine important precedents yet. From my understanding you should report your BTC as property to the IRS but there is no commercial law.. how are my earnings taxed? How is this fair financially from my viewpoint when another federal judge defined BTC as "funds" (vague) and the currency itself is regulated by the futures trading commission. Wouldn't the FTC have the final say in what will happen next? And from an honest fiduciary standpoint if it's already being regulated as "digital currency" why should I be taxed on currency I've already earned fairly through my salary and file it as property? Honestly it sounds like a lot of passing the buck to me and there is no definitive legal framework even in place on any level.. federal or state.


Also on a more concrete practical note if I may get in a 2nd more simple question.. this business will essentially be providing a service. I will be providing my knowledge of the market as well as the BTC system to act as portfolio manager and broker. I am confident in this system and with amounts of more than $5000 I'm sure  me as well as my clients would like a legal retainer agreeing to some fixed amount of risk that kinda covers my end but also legally gives me some type of fiduciary responsibility with the man's money so that I am covered and in the event I make a profit of more than $100k or something like or lose whatever difference that ill guarantee that as to attract attention I would have proof of said responsibility for services rendered and that I'm doing everything by the book.

BTW you may have guessed but that state is GA... would registering it as an llc or something like that be MORE RISKY practically in that it would draw attention or less in that it would appear i have been completely transparent. 



You have some misunderstandings as to the characterization of BTC  It sounds like you want to do the right thing, provide a service, pay your taxes and comply with laws and regulations. It is true that regulation of crypto currencies is confusing. Virtual currency is a tough thing to understand and therefore, to regulate. I don't know your sources but you do not have to report your BTC to the IRS as property. It is only when you convert the same to fiat that you would declare the income. You should probably PM me before you go any further.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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June 20, 2017, 01:55:44 AM
 #102

It is my understanding that if you bought the Monero with BTC then you have not made a conversion to fiat and it is not a taxable event.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com




This is brilliant and the first time that I've seen a good answer on the crypto -> crypto currency conversion. Just to break this down further let's say someone does the following:

1) Acquire DCR (so cost basis is $10)  
2) Trades the DCR for BTC after 1 year
3) Trades the BTC for ETH within 1 week
4) After 1 week sells the ETH for $500

Using the concept of "like kind" transaction is the only taxable event (4), when you convert the crypto over to $ for a profit of $490? Also since the period from (1) to (4) is >1 year is it seen as long-term capital gains?

thanks!



I appreciate the question and example however I am not a tax attorney and am not a CPA. You will have to go to one of them to figure this one out. Best: GDG

For what its worth, I did hire a tax advisor who specializes in cryptocurrencies and we used bitcoin.tax to compute the gain on every trade imported from all the exchanges I use, and manually input for ICO's and mining. The person i hired had done research and their conclusion was that like kind if you were to file that way may slide under the radar but probably would not hold up in court. so we did the damn thing and i paid on gains for every trade whether it ended the year as fiat or not. it sucked but conscience is clear and the government is paid.

$MAID & $BTC other than that some short hodls and some long held garbage.
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June 23, 2017, 02:07:20 AM
 #103

It is my understanding that if you bought the Monero with BTC then you have not made a conversion to fiat and it is not a taxable event.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com




This is brilliant and the first time that I've seen a good answer on the crypto -> crypto currency conversion. Just to break this down further let's say someone does the following:

1) Acquire DCR (so cost basis is $10)  
2) Trades the DCR for BTC after 1 year
3) Trades the BTC for ETH within 1 week
4) After 1 week sells the ETH for $500

Using the concept of "like kind" transaction is the only taxable event (4), when you convert the crypto over to $ for a profit of $490? Also since the period from (1) to (4) is >1 year is it seen as long-term capital gains?

thanks!



I appreciate the question and example however I am not a tax attorney and am not a CPA. You will have to go to one of them to figure this one out. Best: GDG

For what its worth, I did hire a tax advisor who specializes in cryptocurrencies and we used bitcoin.tax to compute the gain on every trade imported from all the exchanges I use, and manually input for ICO's and mining. The person i hired had done research and their conclusion was that like kind if you were to file that way may slide under the radar but probably would not hold up in court. so we did the damn thing and i paid on gains for every trade whether it ended the year as fiat or not. it sucked but conscience is clear and the government is paid.

Did he say why it wouldn't hold up in court? It makes complete sense that crypto -> crypto is like kind. I searched the web - didn't find much but did find this article --> https://money.stackexchange.com/questions/74789/do-altcoin-trades-count-as-like-kind-exchanges-deferred-capital-gains-tax/81117#81117

Btw, unless there's a short-term --> long-term difference the like-kind vs. not taxes should be near equivalent.
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July 06, 2017, 12:23:46 PM
 #104

First of all, thank you very much for hosting this forum. I find it very helpful.

My question is, lets say I have a fund with which I raise money in Bitcoin, Ethereum or other altcoins. I issue shares of the fund to the investors who will then get dividends from my fund (think hedgefund) Can I use the money raised in crypto, convert it to USD and invest it on the stock market? In other words, are you aware of any regulation which prohibits you from investing in the stock market with funds raised from cryptocurrency?

Thanks a lot
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July 07, 2017, 07:27:43 AM
 #105

First of all, thank you very much for hosting this forum. I find it very helpful.

My question is, lets say I have a fund with which I raise money in Bitcoin, Ethereum or other altcoins. I issue shares of the fund to the investors who will then get dividends from my fund (think hedgefund) Can I use the money raised in crypto, convert it to USD and invest it on the stock market? In other words, are you aware of any regulation which prohibits you from investing in the stock market with funds raised from cryptocurrency?

Thanks a lot

It is not illegal to take USD and invest in stocks for yourself. The source of your money should be legal of course. If you are investing cash for other people you then have legal and regulatory issues that must be addressed.

As to the underlying crypto hedge fund, this really depends upon the amounts of money and the persons you are dealing with. There are AML/KYC issues with FinCEN. There may be state money transmission issues is you are dealing in cash at all. Even if you are only dealing in BTC/ETH and the like you must protect yourself from AML issues by registering with FinCEN and making a good faith effort to collect identities where needed and to report when required.

You will of course be on safer ground as to money transmission laws if your hedgefund is opened with purely crypto and dividends paid purely in crypto and you are in a state that does not regulate that.

Finally you are going to have banking issues. But everyone has that.

I hope I answered your question.

George D. Greenberg, Esq.
www.attorneybitcoin.com
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July 07, 2017, 12:17:36 PM
 #106

First of all, thank you very much for hosting this forum. I find it very helpful.

My question is, lets say I have a fund with which I raise money in Bitcoin, Ethereum or other altcoins. I issue shares of the fund to the investors who will then get dividends from my fund (think hedgefund) Can I use the money raised in crypto, convert it to USD and invest it on the stock market? In other words, are you aware of any regulation which prohibits you from investing in the stock market with funds raised from cryptocurrency?

Thanks a lot

It is not illegal to take USD and invest in stocks for yourself. The source of your money should be legal of course. If you are investing cash for other people you then have legal and regulatory issues that must be addressed.

As to the underlying crypto hedge fund, this really depends upon the amounts of money and the persons you are dealing with. There are AML/KYC issues with FinCEN. There may be state money transmission issues is you are dealing in cash at all. Even if you are only dealing in BTC/ETH and the like you must protect yourself from AML issues by registering with FinCEN and making a good faith effort to collect identities where needed and to report when required.

You will of course be on safer ground as to money transmission laws if your hedgefund is opened with purely crypto and dividends paid purely in crypto and you are in a state that does not regulate that.

Finally you are going to have banking issues. But everyone has that.

I hope I answered your question.

George D. Greenberg, Esq.
www.attorneybitcoin.com


Thank you very much for the informative response. Just to be clear, as far as you know, it is legal to invest USD raised from a token sale into the US stock market as long as the fund is registered with FinCen and complies with AML/KYC regulation?
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July 07, 2017, 04:26:26 PM
 #107

First of all, thank you very much for hosting this forum. I find it very helpful.

My question is, lets say I have a fund with which I raise money in Bitcoin, Ethereum or other altcoins. I issue shares of the fund to the investors who will then get dividends from my fund (think hedgefund) Can I use the money raised in crypto, convert it to USD and invest it on the stock market? In other words, are you aware of any regulation which prohibits you from investing in the stock market with funds raised from cryptocurrency?

Thanks a lot

It is not illegal to take USD and invest in stocks for yourself. The source of your money should be legal of course. If you are investing cash for other people you then have legal and regulatory issues that must be addressed.

As to the underlying crypto hedge fund, this really depends upon the amounts of money and the persons you are dealing with. There are AML/KYC issues with FinCEN. There may be state money transmission issues is you are dealing in cash at all. Even if you are only dealing in BTC/ETH and the like you must protect yourself from AML issues by registering with FinCEN and making a good faith effort to collect identities where needed and to report when required.

You will of course be on safer ground as to money transmission laws if your hedgefund is opened with purely crypto and dividends paid purely in crypto and you are in a state that does not regulate that.

Finally you are going to have banking issues. But everyone has that.

I hope I answered your question.

George D. Greenberg, Esq.
www.attorneybitcoin.com


Thank you very much for the informative response. Just to be clear, as far as you know, it is legal to invest USD raised from a token sale into the US stock market as long as the fund is registered with FinCen and complies with AML/KYC regulation?

Are you trying to pin me down to a legal conclusion? Tell me, are you going to point a finger at me if my advice turns out not to be 100% correct? If you are going to manage others money and be an investor then you need to hire an attorney so you can get your "Just to be clear...." answers. I give only general advice here.

In general, it's just not that simple. Sorry but we are in the real world and the real world is complex. That is why attorneys and CPA's devote much of their lives to understanding the complexities, then people pay them for advice they can rely upon.

I'm beginning to tire of readers who think they are somehow entitled to have all of their problems solved without doing their own research and paying their way to solve the more complex issues. I don't mind your general questions but your "Just to be clear...." is a sign to me that you are not willing to put your money where your mouth is, all the while wanting to make money from other people's investments in you.

IN GENERAL SIR, you need to be careful about the sources of your token income as well as declaring any income on your taxes once you have converted the tokens to dollars (hint...hire a CPA.) In addition you need to be mindful of state regulations as to money transmission.   

Another looming issue here is whether or not this new breed of crypto fund owner/managers needs to send out 1099's. When regulators catch up they may very well have to do so.

To all readers; these issues cannot be simplified to a few words. There are no magic solutions as these areas of regulation and taxation are constantly evolving.

George D. Greenberg, Esq.
7674 W. Lake Mead Blvd Suite 245
Las Vegas, Nevada 89128
www.attorneybitcoin.com
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July 09, 2017, 09:29:00 AM
 #108

Just spoke with another member and you need to watch for his post here, this guy has a few things going on at his local area that you guys will find very interesting.  Take a look and do your own research on this attorney, especially in his local district



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.ANGEL TOKEN.
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July 09, 2017, 08:40:31 PM
 #109

Just spoke with another member and you need to watch for his post here, this guy has a few things going on at his local area that you guys will find very interesting.  Take a look and do your own research on this attorney, especially in his local district
Watch out, you might be starting something here Grin
Taken from George's website:
This is a relatively small community and it only takes one or two harsh comments from credible players to hurt a business.

Now, seriously, he's giving free legal advice and fishing for clients at the same time. Just business. All fine by me. 

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July 10, 2017, 04:52:00 AM
 #110

Just spoke with another member and you need to watch for his post here, this guy has a few things going on at his local area that you guys will find very interesting.  Take a look and do your own research on this attorney, especially in his local district

Really? How very cryptic. If you have anything you want to talk to me about please come to my office at 7674 W. Lake Mead Blvd. #245 Las Vegas, Nevada 89128 and say it to me face to face, man to man, or call me at 702 796 5221. I have no idea what you are referring to. My reputation is solid and I am an established 25 year attorney. If you have something to say come out and say it. Otherwise, please refrain from vague statements. And by the way, yes, please everyone research me. Unlike the statement above I put myself out there and am accountable for my statements and actions.

George D. Greenberg, Esq.
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July 10, 2017, 04:56:43 AM
 #111

Just spoke with another member and you need to watch for his post here, this guy has a few things going on at his local area that you guys will find very interesting.  Take a look and do your own research on this attorney, especially in his local district
Watch out, you might be starting something here Grin
Taken from George's website:
This is a relatively small community and it only takes one or two harsh comments from credible players to hurt a business.

Now, seriously, he's giving free legal advice and fishing for clients at the same time. Just business. All fine by me. 

Thank you Sir. Not only have I given free advice from this site but from people who have called from my web site. I have done so for the past 2 years. I have paid my dues, contributed to the community and have earned the right to charge for my time and advice which has kept many out of trouble and saved many more, thousands of dollars.

Respectfully:

GDG
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July 10, 2017, 07:08:38 AM
 #112

First of all, thank you very much for hosting this forum. I find it very helpful.

My question is, lets say I have a fund with which I raise money in Bitcoin, Ethereum or other altcoins. I issue shares of the fund to the investors who will then get dividends from my fund (think hedgefund) Can I use the money raised in crypto, convert it to USD and invest it on the stock market? In other words, are you aware of any regulation which prohibits you from investing in the stock market with funds raised from cryptocurrency?

Thanks a lot

It is not illegal to take USD and invest in stocks for yourself. The source of your money should be legal of course. If you are investing cash for other people you then have legal and regulatory issues that must be addressed.

As to the underlying crypto hedge fund, this really depends upon the amounts of money and the persons you are dealing with. There are AML/KYC issues with FinCEN. There may be state money transmission issues is you are dealing in cash at all. Even if you are only dealing in BTC/ETH and the like you must protect yourself from AML issues by registering with FinCEN and making a good faith effort to collect identities where needed and to report when required.

You will of course be on safer ground as to money transmission laws if your hedgefund is opened with purely crypto and dividends paid purely in crypto and you are in a state that does not regulate that.

Finally you are going to have banking issues. But everyone has that.

I hope I answered your question.

George D. Greenberg, Esq.
www.attorneybitcoin.com


Thank you very much for the informative response. Just to be clear, as far as you know, it is legal to invest USD raised from a token sale into the US stock market as long as the fund is registered with FinCen and complies with AML/KYC regulation?

Are you trying to pin me down to a legal conclusion? Tell me, are you going to point a finger at me if my advice turns out not to be 100% correct? If you are going to manage others money and be an investor then you need to hire an attorney so you can get your "Just to be clear...." answers. I give only general advice here.

In general, it's just not that simple. Sorry but we are in the real world and the real world is complex. That is why attorneys and CPA's devote much of their lives to understanding the complexities, then people pay them for advice they can rely upon.

I'm beginning to tire of readers who think they are somehow entitled to have all of their problems solved without doing their own research and paying their way to solve the more complex issues. I don't mind your general questions but your "Just to be clear...." is a sign to me that you are not willing to put your money where your mouth is, all the while wanting to make money from other people's investments in you.

IN GENERAL SIR, you need to be careful about the sources of your token income as well as declaring any income on your taxes once you have converted the tokens to dollars (hint...hire a CPA.) In addition you need to be mindful of state regulations as to money transmission.   

Another looming issue here is whether or not this new breed of crypto fund owner/managers needs to send out 1099's. When regulators catch up they may very well have to do so.

To all readers; these issues cannot be simplified to a few words. There are no magic solutions as these areas of regulation and taxation are constantly evolving.

George D. Greenberg, Esq.
7674 W. Lake Mead Blvd Suite 245
Las Vegas, Nevada 89128
www.attorneybitcoin.com

I'm really uncertain about the connotation you seem to give to "just to be clear." I was simply clarifying your advice. Certainly, I was not and am not going to be taking any of your advice as matter of fact. Of course I wouldn't as you are merely a "bitcoin" lawyer behind a screen somewhere who knows...
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July 10, 2017, 04:08:48 PM
 #113

Just spoke with another member and you need to watch for his post here, this guy has a few things going on at his local area that you guys will find very interesting.  Take a look and do your own research on this attorney, especially in his local district

Really? How very cryptic. If you have anything you want to talk to me about please come to my office at 7674 W. Lake Mead Blvd. #245 Las Vegas, Nevada 89128 and say it to me face to face, man to man, or call me at 702 796 5221. I have no idea what you are referring to. My reputation is solid and I am an established 25 year attorney. If you have something to say come out and say it. Otherwise, please refrain from vague statements. And by the way, yes, please everyone research me. Unlike the statement above I put myself out there and am accountable for my statements and actions.

George D. Greenberg, Esq.


Just a heads up, and I have said nothing bad here, just to check things out for yourself and make your own choices based on what you find out about anyone and his personal business dealings. I am just saying for those who have not deal with you yet that do your own research and you can't go wrong from there.
As far as i am concern,  recently do not need any legal advice, but when i do, i will surely consult you because i think you are providing good services.



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July 10, 2017, 08:34:42 PM
 #114

First of all, thank you very much for hosting this forum. I find it very helpful.

My question is, lets say I have a fund with which I raise money in Bitcoin, Ethereum or other altcoins. I issue shares of the fund to the investors who will then get dividends from my fund (think hedgefund) Can I use the money raised in crypto, convert it to USD and invest it on the stock market? In other words, are you aware of any regulation which prohibits you from investing in the stock market with funds raised from cryptocurrency?

Thanks a lot

It is not illegal to take USD and invest in stocks for yourself. The source of your money should be legal of course. If you are investing cash for other people you then have legal and regulatory issues that must be addressed.

As to the underlying crypto hedge fund, this really depends upon the amounts of money and the persons you are dealing with. There are AML/KYC issues with FinCEN. There may be state money transmission issues is you are dealing in cash at all. Even if you are only dealing in BTC/ETH and the like you must protect yourself from AML issues by registering with FinCEN and making a good faith effort to collect identities where needed and to report when required.

You will of course be on safer ground as to money transmission laws if your hedgefund is opened with purely crypto and dividends paid purely in crypto and you are in a state that does not regulate that.

Finally you are going to have banking issues. But everyone has that.

I hope I answered your question.

George D. Greenberg, Esq.
www.attorneybitcoin.com


Thank you very much for the informative response. Just to be clear, as far as you know, it is legal to invest USD raised from a token sale into the US stock market as long as the fund is registered with FinCen and complies with AML/KYC regulation?

Are you trying to pin me down to a legal conclusion? Tell me, are you going to point a finger at me if my advice turns out not to be 100% correct? If you are going to manage others money and be an investor then you need to hire an attorney so you can get your "Just to be clear...." answers. I give only general advice here.

In general, it's just not that simple. Sorry but we are in the real world and the real world is complex. That is why attorneys and CPA's devote much of their lives to understanding the complexities, then people pay them for advice they can rely upon.

I'm beginning to tire of readers who think they are somehow entitled to have all of their problems solved without doing their own research and paying their way to solve the more complex issues. I don't mind your general questions but your "Just to be clear...." is a sign to me that you are not willing to put your money where your mouth is, all the while wanting to make money from other people's investments in you.

IN GENERAL SIR, you need to be careful about the sources of your token income as well as declaring any income on your taxes once you have converted the tokens to dollars (hint...hire a CPA.) In addition you need to be mindful of state regulations as to money transmission.   

Another looming issue here is whether or not this new breed of crypto fund owner/managers needs to send out 1099's. When regulators catch up they may very well have to do so.

To all readers; these issues cannot be simplified to a few words. There are no magic solutions as these areas of regulation and taxation are constantly evolving.

George D. Greenberg, Esq.
7674 W. Lake Mead Blvd Suite 245
Las Vegas, Nevada 89128
www.attorneybitcoin.com

I'm really uncertain about the connotation you seem to give to "just to be clear." I was simply clarifying your advice. Certainly, I was not and am not going to be taking any of your advice as matter of fact. Of course I wouldn't as you are merely a "bitcoin" lawyer behind a screen somewhere who knows...

I do not hide behind any screen Sir. You may see me in person at 7674 West Lake Mead #245 Las Vegas, Nevada 89128 or call me at 702 796 5221 anytime. I'm here every day of the week.
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July 14, 2017, 08:59:38 PM
 #115

Thank you for doing this.  Free information from a knowledgeable professional is much appreciated.

I have read that many states require that a bitcoin seller be licensed and bonded as a money transmitter.  With regards to my particular state, New Jersey, my googling has failed to turn up any such information. 

My questions:

1.  Assuming that NJ does not yet require a seller to be a licensed money transmitter, does this mean that anyone could set themselves up as a buyer/reseller?

2.  How would you recommend going about finding out what the relevant laws are for my state?  What type of agency would have the information?

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July 14, 2017, 11:54:58 PM
 #116

First of all, thank you very much for hosting this forum. I find it very helpful.

My question is, lets say I have a fund with which I raise money in Bitcoin, Ethereum or other altcoins. I issue shares of the fund to the investors who will then get dividends from my fund (think hedgefund) Can I use the money raised in crypto, convert it to USD and invest it on the stock market? In other words, are you aware of any regulation which prohibits you from investing in the stock market with funds raised from cryptocurrency?

Thanks a lot

It is not illegal to take USD and invest in stocks for yourself. The source of your money should be legal of course. If you are investing cash for other people you then have legal and regulatory issues that must be addressed.

As to the underlying crypto hedge fund, this really depends upon the amounts of money and the persons you are dealing with. There are AML/KYC issues with FinCEN. There may be state money transmission issues is you are dealing in cash at all. Even if you are only dealing in BTC/ETH and the like you must protect yourself from AML issues by registering with FinCEN and making a good faith effort to collect identities where needed and to report when required.

You will of course be on safer ground as to money transmission laws if your hedgefund is opened with purely crypto and dividends paid purely in crypto and you are in a state that does not regulate that.

Finally you are going to have banking issues. But everyone has that.

I hope I answered your question.

George D. Greenberg, Esq.
www.attorneybitcoin.com


Thank you very much for the informative response. Just to be clear, as far as you know, it is legal to invest USD raised from a token sale into the US stock market as long as the fund is registered with FinCen and complies with AML/KYC regulation?

Are you trying to pin me down to a legal conclusion? Tell me, are you going to point a finger at me if my advice turns out not to be 100% correct? If you are going to manage others money and be an investor then you need to hire an attorney so you can get your "Just to be clear...." answers. I give only general advice here.

In general, it's just not that simple. Sorry but we are in the real world and the real world is complex. That is why attorneys and CPA's devote much of their lives to understanding the complexities, then people pay them for advice they can rely upon.

I'm beginning to tire of readers who think they are somehow entitled to have all of their problems solved without doing their own research and paying their way to solve the more complex issues. I don't mind your general questions but your "Just to be clear...." is a sign to me that you are not willing to put your money where your mouth is, all the while wanting to make money from other people's investments in you.

IN GENERAL SIR, you need to be careful about the sources of your token income as well as declaring any income on your taxes once you have converted the tokens to dollars (hint...hire a CPA.) In addition you need to be mindful of state regulations as to money transmission.   

Another looming issue here is whether or not this new breed of crypto fund owner/managers needs to send out 1099's. When regulators catch up they may very well have to do so.

To all readers; these issues cannot be simplified to a few words. There are no magic solutions as these areas of regulation and taxation are constantly evolving.

George D. Greenberg, Esq.
7674 W. Lake Mead Blvd Suite 245
Las Vegas, Nevada 89128
www.attorneybitcoin.com

I'm really uncertain about the connotation you seem to give to "just to be clear." I was simply clarifying your advice. Certainly, I was not and am not going to be taking any of your advice as matter of fact. Of course I wouldn't as you are merely a "bitcoin" lawyer behind a screen somewhere who knows...

I do not hide behind any screen Sir. You may see me in person at 7674 West Lake Mead #245 Las Vegas, Nevada 89128 or call me at 702 796 5221 anytime. I'm here every day of the week.

There's always someone around the corner looking to discredit someone  Roll Eyes  @JohnBitCo

AttorneyBitcoin/GDG- Nice to see you offering some helpful advice to the forum and for FREE?!!

Thanks again and Best Wishes in your practice.

~Be Wise & Scrutinize Everything~~Scammers are like roaches squash 1 there's millions more hiding~I will NEVER ask for a loan~I got plenty of my own ~ BIGGEST lie to date said about me: https://bitcointalk.org/index.php?topic=2046485.msg20429473#new
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July 15, 2017, 06:42:35 AM
 #117

Hi George,

I'm interested in starting up a website where people can gamble with bitcoins. The game is similar to a "heads or tails" game. In my website there is no specific account where people sign up for. When they want to bet they send their money to one bitcoin address for "heads" and another for "tails". At the end of the week one side wins and the other side loses. The winning side gets slightly shy of double their money. The losing side gets nothing. I collect the remainder.

Since Bitcoin isn't technically recognized by the US as a currency does this even count as gambling? I live in Michigan if that changes anything.

1) Is this legal?
2) If it is illegal what are the consequences and likelihood of those consequences occurring?

Looking for more ways to earn more Bitcoin? Go to www.earnthosebitcoin.com to find out how.
___Man of mystery--Satoshi Nakamoto--Creator of coin______Making history--An innovative money--The future is here______My link shows it clear--A better way to earn those--Now earn those Bitcoin___
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July 15, 2017, 07:15:39 AM
 #118

First of all, thank you very much for hosting this forum. I find it very helpful.

My question is, lets say I have a fund with which I raise money in Bitcoin, Ethereum or other altcoins. I issue shares of the fund to the investors who will then get dividends from my fund (think hedgefund) Can I use the money raised in crypto, convert it to USD and invest it on the stock market? In other words, are you aware of any regulation which prohibits you from investing in the stock market with funds raised from cryptocurrency?

Thanks a lot

It is not illegal to take USD and invest in stocks for yourself. The source of your money should be legal of course. If you are investing cash for other people you then have legal and regulatory issues that must be addressed.

As to the underlying crypto hedge fund, this really depends upon the amounts of money and the persons you are dealing with. There are AML/KYC issues with FinCEN. There may be state money transmission issues is you are dealing in cash at all. Even if you are only dealing in BTC/ETH and the like you must protect yourself from AML issues by registering with FinCEN and making a good faith effort to collect identities where needed and to report when required.

You will of course be on safer ground as to money transmission laws if your hedgefund is opened with purely crypto and dividends paid purely in crypto and you are in a state that does not regulate that.

Finally you are going to have banking issues. But everyone has that.

I hope I answered your question.

George D. Greenberg, Esq.
www.attorneybitcoin.com


Thank you very much for the informative response. Just to be clear, as far as you know, it is legal to invest USD raised from a token sale into the US stock market as long as the fund is registered with FinCen and complies with AML/KYC regulation?

Are you trying to pin me down to a legal conclusion? Tell me, are you going to point a finger at me if my advice turns out not to be 100% correct? If you are going to manage others money and be an investor then you need to hire an attorney so you can get your "Just to be clear...." answers. I give only general advice here.

In general, it's just not that simple. Sorry but we are in the real world and the real world is complex. That is why attorneys and CPA's devote much of their lives to understanding the complexities, then people pay them for advice they can rely upon.

I'm beginning to tire of readers who think they are somehow entitled to have all of their problems solved without doing their own research and paying their way to solve the more complex issues. I don't mind your general questions but your "Just to be clear...." is a sign to me that you are not willing to put your money where your mouth is, all the while wanting to make money from other people's investments in you.

IN GENERAL SIR, you need to be careful about the sources of your token income as well as declaring any income on your taxes once you have converted the tokens to dollars (hint...hire a CPA.) In addition you need to be mindful of state regulations as to money transmission.   

Another looming issue here is whether or not this new breed of crypto fund owner/managers needs to send out 1099's. When regulators catch up they may very well have to do so.

To all readers; these issues cannot be simplified to a few words. There are no magic solutions as these areas of regulation and taxation are constantly evolving.

George D. Greenberg, Esq.
7674 W. Lake Mead Blvd Suite 245
Las Vegas, Nevada 89128
www.attorneybitcoin.com

I'm really uncertain about the connotation you seem to give to "just to be clear." I was simply clarifying your advice. Certainly, I was not and am not going to be taking any of your advice as matter of fact. Of course I wouldn't as you are merely a "bitcoin" lawyer behind a screen somewhere who knows...

I do not hide behind any screen Sir. You may see me in person at 7674 West Lake Mead #245 Las Vegas, Nevada 89128 or call me at 702 796 5221 anytime. I'm here every day of the week.

There's always someone around the corner looking to discredit someone  Roll Eyes  @JohnBitCo

AttorneyBitcoin/GDG- Nice to see you offering some helpful advice to the forum and for FREE?!!

Thanks again and Best Wishes in your practice.

Thank you for the kind and supportive words of appreciation. Best: GDG
AttorneyBitcoin
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July 15, 2017, 07:23:05 AM
 #119

Hi George,

I'm interested in starting up a website where people can gamble with bitcoins. The game is similar to a "heads or tails" game. In my website there is no specific account where people sign up for. When they want to bet they send their money to one bitcoin address for "heads" and another for "tails". At the end of the week one side wins and the other side loses. The winning side gets slightly shy of double their money. The losing side gets nothing. I collect the remainder.

Since Bitcoin isn't technically recognized by the US as a currency does this even count as gambling? I live in Michigan if that changes anything.

1) Is this legal?
2) If it is illegal what are the consequences and likelihood of those consequences occurring?

Dear TheGodson:

Sure, it's legal if gaming is legal in your state and you have a gaming license in your state and you limit the wagering to people in your state.

That is unlikely so the answers are: 1) It is probably illegal, and; 2)You can face criminal prosecution.

I'm sorry I don't have better news for you. If you want to explore a gaming site online you might look into my home State of Nevada. You would have to live here though, get a gaming license here, and limit the gaming to in-state wagering. Honestly it doesn't sound very promising.

Keep looking for opportunities to make use of Bitcoin and other cryptos in business and best of luck to you Sir.

George D. Greenberg, Esq.
www.attorneybitcoin.com
 
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July 15, 2017, 07:09:45 PM
 #120

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


Hi! I was wondering if you could put me in the right direction here. Seeing as you are an actual attorney is a plus, seeing that you are located in Las Vegas makes you seem even more qualified to answer my question!
So I am part of a small team (people who work at facebook/fitbit/salesforce) that is developing a new gambling based cryptocurrency. My question is, is how do we go about incorporating a business offshore for the purpose of accepting payments through our ICO? Is that even necessary and should we just incorporate in Nevada seeing as cryptocurrenices are not securities but personal property?

Thank you for your time, I appreciate it, and we would love to talk to you more as a team if you would be willing to give us of it outside of replying to my post right now.
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July 15, 2017, 08:32:10 PM
 #121

Your questions will require in depth discussions. Please PM me. Thank you for writing.

George Greenberg
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July 15, 2017, 11:57:54 PM
 #122

I don't suppose I could use a charity to offset the gambling issue by any chance. I'm guessing probably not.


I've thought of an alternative idea which I'm pretty sure wouldn't have any legal issues, but maybe I'm missing something:

I build a website with a virtual tree. People interact with the tree to get it to grow. If you are a top contributor to the growth of the tree you get access to place a message on one of the branches (this could be a friendly simple message or even an advertisement). Soon people start to realize that paying money/bitcoin is the quickest way to get treegrowth points and get a message on a branch. The short term plan would be to get interaction. The long term plan would be to make money.

To run a game like this would I be required to have some special license or permit? Anything illegal that I'm overlooking?


On a side note, I really must say that creating this AMA thread was a brilliant idea. If I ever get into Bitcoin legal trouble I'll know who to go to  Grin... Actually since you're in Nevada, which is a ways across the country for me, that probably won't happen. Good idea though nevertheless. Thanks for your help.

Looking for more ways to earn more Bitcoin? Go to www.earnthosebitcoin.com to find out how.
___Man of mystery--Satoshi Nakamoto--Creator of coin______Making history--An innovative money--The future is here______My link shows it clear--A better way to earn those--Now earn those Bitcoin___
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July 16, 2017, 06:13:35 AM
 #123

I like the tree idea. It is clever and creative. There is not much marketing to female crypto enthusiasts, this might be something they enjoy.  It does not look like gaming to me. It needs some more work but you are on the right track, keep working and thank you for the kind words.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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July 17, 2017, 10:59:53 PM
 #124

Gonna repost in case this was overlooked.  Hopefully it's not a case of being too state specific...


Thank you for doing this.  Free information from a knowledgeable professional is much appreciated.

I have read that many states require that a bitcoin seller be licensed and bonded as a money transmitter.  With regards to my particular state, New Jersey, my googling has failed to turn up any such information. 

My questions:

1.  Assuming that NJ does not yet require a seller to be a licensed money transmitter, does this mean that anyone who meets the Federal standards could set themselves up as a buyer/reseller?

2.  How would you recommend going about finding out what the relevant laws are for my state?  What type of agency would have the information?

3.  On the Federal level, is my understanding correct that I would have to register with FinCEN, and follow all AML and KYC protocols?  Would this be sufficient or is there more to it?

Thanks in advance.
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July 18, 2017, 06:32:28 AM
 #125

Dear New Jersey:

As to FinCEN, yes, you are on the right track. Register as an MSB and make a reasonable good faith effort to follow their requirements. This will take some research on your behalf. You can hire a professional to summarize it for you and to help you set up a plan.

Money Transmitters. Every state that has these licenses has a division that oversees them. In Nevada it is under the Department of Business and Industry. You will have something similar in New Jersey. Look under banking regulations or money service business regulations for your state as a start.

They may or may not require you to have a M.T. license. If they do it won't be cost effective for a small business. You can write the proper state agency or have an attorney write them and state your business plan and ask if they consider it a M.T. activity that requires a license. Send the letter certified mail return receipt requested. It is known as a "no action letter." Meaning that you hope there is no action required by you and that they will take no action against you.

It will carry greater weight if sent by and attorney. I have sent many of these to many states.

Really, the biggest problem is banking. But that is another story.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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July 20, 2017, 01:54:50 PM
 #126

Thank you for the informative reply.  You've been a big help and it is much appreciated.
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August 09, 2017, 06:43:14 AM
 #127

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


COINBASE AND BCC

I would like to comment and get comments on BCC and Coinbase. Coinbase may not have given a full and fair warning as to the implications of leaving BTC in Coinbase at the recent fork. If a user had transferred his BTC to say Bittrex, he would have been given BCC on or after August 1, 2017. If a user left his BTC in Coinbase he receives no BCC. I have seen talk of legal action. Now I have nothing against Coinbase. I have a wallet there and they are an industry leader; however it seems they have perhaps missed the boat on this one. The question looms, what happened to the BCC that was awarded to to Coinbase? What's missing here? Have I misunderstood?

Comments from Dev's would be greatly appreciated. I think there are many people affected by this. Thousands?

George D. Greenberg, Esq.
www.attorneybitcoin.com
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August 12, 2017, 05:55:42 AM
 #128

I understand you are focused on US law.

But which country would you recommend investigating to move to to avoid a tax point for realizing crypto gains? Both for US and non-US citizens.

1ntemetqbXokPSSkuHH4iuAJRTQMP6uJ9
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August 12, 2017, 10:15:12 AM
 #129

If one earns bitcoin f.e. via signature campaign, when should he pay tax? At the moment he cashed in Bitcoin or when he cashes out to fiat? In Japan its clear, he should pay taxes for the date, he earned the BTC, but other countries f.e. in Europe or USA ?
Many thanks for your awesome thread.


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August 13, 2017, 05:15:06 AM
 #130

I understand you are focused on US law.

But which country would you recommend investigating to move to to avoid a tax point for realizing crypto gains? Both for US and non-US citizens.

I vote for staying in the United States and paying taxes as a Citizen. We are all in this together and choose to live here.
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August 13, 2017, 05:38:56 AM
 #131

If one earns bitcoin f.e. via signature campaign, when should he pay tax? At the moment he cashed in Bitcoin or when he cashes out to fiat? In Japan its clear, he should pay taxes for the date, he earned the BTC, but other countries f.e. in Europe or USA ?
Many thanks for your awesome thread.

I am not a tax expert but I do understand how confusing taxation is for Crypto-Currencies. There are 2 different taxes. Income tax and capital gains tax.

Income, to the best of my understanding, happens when you turn BTC, into fiat. It is considered income for that year and claimed in that year as part of your entire income, for income tax return purposes. 

Capital gains is a bit more complicated. It has to do with the gains you have made on investments. This type of tax is one of the most disliked. It's basically the difference between what you bought an asset for and what you sold it for.

The calculating of capital gains in the crypto-world can be quite complicated. If you buy a coin  and it increases or decreases in price, did you keep track of the price you bought it at and the price you sold it at? Is your trading platform tracking that? Then you use that coin and buy a different coin, then you sell that and buy another coin and so on and so forth; then you add some more funding to the account at the trading platform; are you tracking the added funding separately? Then you continue buying and selling the same coins which are all then grouped together in their own trading platform wallets. You get the drift.   

A C.P.A. will understand these things and be able to answer more specifically.

I hope that helps.

George D. Greenberg, Esq.
www.attorneybitcoin.com   
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August 13, 2017, 06:35:53 AM
 #132

If one earns bitcoin f.e. via signature campaign, when should he pay tax? At the moment he cashed in Bitcoin or when he cashes out to fiat? In Japan its clear, he should pay taxes for the date, he earned the BTC, but other countries f.e. in Europe or USA ?
Many thanks for your awesome thread.

I am not a tax expert but I do understand how confusing taxation is for Crypto-Currencies. There are 2 different taxes. Income tax and capital gains tax.

Income, to the best of my understanding, happens when you turn BTC, into fiat. It is considered income for that year and claimed in that year as part of your entire income, for income tax return purposes.  

Capital gains is a bit more complicated. It has to do with the gains you have made on investments. This type of tax is one of the most disliked. It's basically the difference between what you bought an asset for and what you sold it for.

The calculating of capital gains in the crypto-world can be quite complicated. If you buy a coin  and it increases or decreases in price, did you keep track of the price you bought it at and the price you sold it at? Is your trading platform tracking that? Then you use that coin and buy a different coin, then you sell that and buy another coin and so on and so forth; then you add some more funding to the account at the trading platform; are you tracking the added funding separately? Then you continue buying and selling the same coins which are all then grouped together in their own trading platform wallets. You get the drift.  

A C.P.A. will understand these things and be able to answer more specifically.

I hope that helps.

George D. Greenberg, Esq.
www.attorneybitcoin.com  
.
Many thanks, your answer helped me really. Although it is very complicated, your answer clarified the both taxes for income and capital.
So as soon as we change btc or cryptocurrency income to fiat, we have two kinds of taxes.
 But would exchange to another cryptocurreny already be handled like exchange to fiat, so that already also income tax for that amount would be calculated? Lets say one earns 1 BTC and exchanges half of BTC to ETH. Has he now half BTC also income or only as soon as he pays out to fiat?


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August 13, 2017, 06:40:45 AM
 #133

Hello and thanks for having this little section.

My main question is about capital gains tax on bitcoin transactions.

Say you are holding bitcoins for business purchases(importing goods, buying goods in bitcoin, etc.), but in the process of holding these bitcoins the price of bitcoin rises. Will there still be a capital gains tax on your bitcoin holdings?

This is an usage case for bitcoin as a currency, not as an investment.

Also, is there an age minimum for capital gains tax to apply? For example, 18 y.o.'s or below don't qualify for CGT?

Thanks in advance?

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August 13, 2017, 07:00:04 PM
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Where's the best place to incorporate a blockchain project these days? Some people say Singapore or Switzerland but I've heard both places are becoming less friendly to crypto lately. TIA
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August 14, 2017, 05:21:08 AM
 #135

If one earns bitcoin f.e. via signature campaign, when should he pay tax? At the moment he cashed in Bitcoin or when he cashes out to fiat? In Japan its clear, he should pay taxes for the date, he earned the BTC, but other countries f.e. in Europe or USA ?
Many thanks for your awesome thread.

I am not a tax expert but I do understand how confusing taxation is for Crypto-Currencies. There are 2 different taxes. Income tax and capital gains tax.

Income, to the best of my understanding, happens when you turn BTC, into fiat. It is considered income for that year and claimed in that year as part of your entire income, for income tax return purposes.  

Capital gains is a bit more complicated. It has to do with the gains you have made on investments. This type of tax is one of the most disliked. It's basically the difference between what you bought an asset for and what you sold it for.

The calculating of capital gains in the crypto-world can be quite complicated. If you buy a coin  and it increases or decreases in price, did you keep track of the price you bought it at and the price you sold it at? Is your trading platform tracking that? Then you use that coin and buy a different coin, then you sell that and buy another coin and so on and so forth; then you add some more funding to the account at the trading platform; are you tracking the added funding separately? Then you continue buying and selling the same coins which are all then grouped together in their own trading platform wallets. You get the drift.  

A C.P.A. will understand these things and be able to answer more specifically.

I hope that helps.

George D. Greenberg, Esq.
www.attorneybitcoin.com  
.
Many thanks, your answer helped me really. Although it is very complicated, your answer clarified the both taxes for income and capital.
So as soon as we change btc or cryptocurrency income to fiat, we have two kinds of taxes.
 But would exchange to another cryptocurreny already be handled like exchange to fiat, so that already also income tax for that amount would be calculated? Lets say one earns 1 BTC and exchanges half of BTC to ETH. Has he now half BTC also income or only as soon as he pays out to fiat?

To the best of my knowledge converting to a different crypto-currency does not trigger a taxable event. Please consult a CPA as I am not an expert in tax matters.

George D. Greenberg
www.attorneybitcoin.com
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August 14, 2017, 05:24:21 AM
 #136

Where's the best place to incorporate a blockchain project these days? Some people say Singapore or Switzerland but I've heard both places are becoming less friendly to crypto lately. TIA

I'm sorry I do not have an answer to your question. Look into the country that you are a citizen of. That way you can be accountable for your actions and pay taxes for the country you live in.

George D. Greenberg, Esq.
www.attorneybitcoin.com
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August 14, 2017, 05:26:19 AM
 #137

If one earns bitcoin f.e. via signature campaign, when should he pay tax? At the moment he cashed in Bitcoin or when he cashes out to fiat? In Japan its clear, he should pay taxes for the date, he earned the BTC, but other countries f.e. in Europe or USA ?
Many thanks for your awesome thread.

I am not a tax expert but I do understand how confusing taxation is for Crypto-Currencies. There are 2 different taxes. Income tax and capital gains tax.

Income, to the best of my understanding, happens when you turn BTC, into fiat. It is considered income for that year and claimed in that year as part of your entire income, for income tax return purposes. 

Capital gains is a bit more complicated. It has to do with the gains you have made on investments. This type of tax is one of the most disliked. It's basically the difference between what you bought an asset for and what you sold it for.

The calculating of capital gains in the crypto-world can be quite complicated. If you buy a coin  and it increases or decreases in price, did you keep track of the price you bought it at and the price you sold it at? Is your trading platform tracking that? Then you use that coin and buy a different coin, then you sell that and buy another coin and so on and so forth; then you add some more funding to the account at the trading platform; are you tracking the added funding separately? Then you continue buying and selling the same coins which are all then grouped together in their own trading platform wallets. You get the drift.   

A C.P.A. will understand these things and be able to answer more specifically.

I hope that helps.

George D. Greenberg, Esq.
www.attorneybitcoin.com   

It's really a difficult issue about bitcoin and taxation on it.
Thanks for your explanation.
I will keep following your thread because it is very informative.

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August 15, 2017, 05:10:24 AM
 #138

Hey, i have a question , so i bought a few bitcoins years ago
and basically forgot about them
but now they are worth a small fortune , as u know 1 bitcoin is worth 4,3 k today
i am not planning on selling them quite yet , u never know, they might be worth even more in the future.
but my question is , would that get me in trouble with the authorities ? do i need to pay taxes on them?
if i do sell them, how would the bank react ? does that breach some sort of money laundering law ? since i do not trade or anything
i've just been ''hodling'' the btc all this time. and what's your advice ?
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August 15, 2017, 06:33:34 AM
 #139

Hey, i have a question , so i bought a few bitcoins years ago
and basically forgot about them
but now they are worth a small fortune , as u know 1 bitcoin is worth 4,3 k today
i am not planning on selling them quite yet , u never know, they might be worth even more in the future.
but my question is , would that get me in trouble with the authorities ? do i need to pay taxes on them?
if i do sell them, how would the bank react ? does that breach some sort of money laundering law ? since i do not trade or anything
i've just been ''hodling'' the btc all this time. and what's your advice ?


I think it is a great set of questions. First of all good for you! Currently, just holding Bitcoin, to the best of my knowledge, is not a taxable event. There are no money laundering issues here. You are not going to get in trouble with any authorities. It is perfectly legal to own BTC.

My advice going forward though is that you diversify. Spread it out a little bit. ETH seems to be a worthy investment. There are other coins out there that have utility and a following such as CURE coin. Also, consider taking some profit, that is, sell a little, then you would declare that as income and it would be subject to income taxe but so what, pay them. It is wise to take some profit and foolish to think that BTC will go up forever.

I do want to caution all, BTC is speculative. Yes, it has been going up in price and everyone is excited, but it could drop in price as well. If you have been around for a few years you will know this to be true.

George D. Greenberg, Esq.
www.attorneybitcoin.com
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August 15, 2017, 03:15:20 PM
 #140

Hello. Thanks your for taking the time answer all these question. I have one I have been wondering about.
1.If I sell bit coin for usd, but the usd stay on an exchange, to be respent on more bitcoin, do I pay taxes on that capital gain? I wonder since the money never left the exchange and can't be used for anything but crypto unless I withdraw it.
2. Same scenario but instead of usd, I sell for usdt (tether) which is tied to the usd. Would this count as a capital gain? Or only when it is actual fiat USD?

3. I live in Arkansas. To your knowledge, what taxes would my profits be subject too. Is there any state laws here not found elsewhere pertaining to crypto currencies.

4.I know your not a tax attorney, but I'd appreciate your insight on these matters. Also, can you recommend a tax attorney in this area who deals with bitcoin?
5. What type of laws would apply to a bit coin investment and trading group? Many people I talk to would like to get into bit coin or invest, but don't have the time to monitor the market and reasearch. Several have asked if I could handle this for them. If I do this and charge a fee, what 
would/could I be liable for? What license's would be required and what license would probably be a good idea, if not yet required? Would these answers change if we started dealing with larger amount's of money? Like from 1000 invested to 100k invested.
Thank you once again
HP

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August 16, 2017, 05:48:01 AM
 #141

Hello. Thanks your for taking the time answer all these question. I have one I have been wondering about.
1.If I sell bit coin for usd, but the usd stay on an exchange, to be respent on more bitcoin, do I pay taxes on that capital gain? I wonder since the money never left the exchange and can't be used for anything but crypto unless I withdraw it.
2. Same scenario but instead of usd, I sell for usdt (tether) which is tied to the usd. Would this count as a capital gain? Or only when it is actual fiat USD?

3. I live in Arkansas. To your knowledge, what taxes would my profits be subject too. Is there any state laws here not found elsewhere pertaining to crypto currencies.

4.I know your not a tax attorney, but I'd appreciate your insight on these matters. Also, can you recommend a tax attorney in this area who deals with bitcoin?
5. What type of laws would apply to a bit coin investment and trading group? Many people I talk to would like to get into bit coin or invest, but don't have the time to monitor the market and reasearch. Several have asked if I could handle this for them. If I do this and charge a fee, what 
would/could I be liable for? What license's would be required and what license would probably be a good idea, if not yet required? Would these answers change if we started dealing with larger amount's of money? Like from 1000 invested to 100k invested.
Thank you once again
HP

1. It is my opinion that once you convert BTC to fiat, even if you leave the fiat on the exchange, it is still a taxable event both for income and capital gains. However, why would you leave fiat on a crypto exchange? Normally when BTC is converted to fiat it is with the intention of taking profit and withdrawing the cash.

2. I don't know much about usdt, but if the price is merely tied to USD then it is still a crypto-currency or token, and therefore you would not be converting BTC to fiat so not a taxable event.

3. I am licensed in Nevada. I do not know the laws of Arkansas and have never been hired to explore them.

4. I do not generally make public or private referrals on this site unless hired privately to investigate the same.

5. The questions in #5 are far beyond the scope of the free advice I provide on this site. In general the SEC, FinCEN and State regulators may  look into those who are acting as Brokers for others. This type of venture is much more complex than people initially assume. 

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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August 16, 2017, 08:07:40 AM
 #142

hey mr. does bitcoin have a tax ??
because i think that the tax we are paying when we are cashing out is like the handling fee of the remitance center does it legit legal??
thankyou in advance if this will have an answer

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August 16, 2017, 10:53:41 AM
 #143

Hi George.

1st thanks for this thread, your taking time for this is much appreciated.

my question is as far as i know the irs clarified its rules in bitcoin in 2014 for tax purposes.. what rules were in place before this clarification? such as mined coins being treated as income?
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August 17, 2017, 06:15:25 AM
 #144

Hi George.

1st thanks for this thread, your taking time for this is much appreciated.

my question is as far as i know the irs clarified its rules in bitcoin in 2014 for tax purposes.. what rules were in place before this clarification? such as mined coins being treated as income?

Great question that I don't know the answer to. Time for me to research.
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August 17, 2017, 06:33:06 AM
 #145

hey mr. does bitcoin have a tax ??
because i think that the tax we are paying when we are cashing out is like the handling fee of the remitance center does it legit legal??
thankyou in advance if this will have an answer

That would be "Mr. Greenberg," not "hey mr." Bitcoin does not have a direct tax. Fees from trading platforms and exchanges and remittance are simply fees from the companies handling the transactions. They are not taxes.

What you need to consider is when you convert BTC to U.S. Dollars. You would then generally consider the dollars as income under most scenarios. But let's take a closer look at this.

If I took after tax dollars, then bought BTC, then sold that same BTC at the same or lower price, would this then be income? Of course it would not be.

If I invested in BTC at 400 and sold it at 4,000 would the gain be considered income and/or capital gains? Well, yes. For clarification as to whether this would be income or capital gains or both please consult with a CPA.

If I perform a service and am paid in BTC and I convert that to dollars is this income? You bet it is. But there is no immediate tax due. I would declare this as part of my taxable income for quarterly estimated tax payments and year end income tax returns.

If I perform a service and I am paid in BTC and I use that BTC to buy other goods or services, is that BTC then considered income at the time of use? This is one of the hardest questions. It does seem to be income in this scenario. There are many variations to this fact pattern and the answers are not always clear. It would also be something that would be difficult for tax authorities to find, for now. However, the goal is not to cheat my own country out of my tax liabilities but rather to legally minimize my tax liabilities and to recognize and pay my lawful obligations so I'm not surprised with a big tax bill later.

Finally, If i MINE BTC, is this considered income when I convert it to fiat? I do believe so.

George D. Greenberg, Esq.

www.attorneybitocin.com

 
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August 17, 2017, 07:12:17 AM
 #146

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


Good morning! I hope, you can give me some useful advices about my question. I've heard, that there can appear problems with сashing out of money, which were received from the ICO, if during the ICO we did not follow the KWC-policy. I mean that as i understood we must collect different personal information of our investors to identify them and to counteract legalisatio of crime money. And, if the only information we know about our investors is their e-mail adress and adress of their crypto-currency wallet there can be problems whith cashing out of money throuhg the cryptocurrency burse and bank. Is that true? What personal informaition of investors should we collect to avoid this kind of difficultis?

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August 17, 2017, 12:31:16 PM
 #147

Hi George.

1st thanks for this thread, your taking time for this is much appreciated.

my question is as far as i know the irs clarified its rules in bitcoin in 2014 for tax purposes.. what rules were in place before this clarification? such as mined coins being treated as income?

Great question that I don't know the answer to. Time for me to research.

well i guess i shouldnt feel too bad that i couldnt find the answer on my own then Smiley

anything you find and can share i will greatly appreciate. last thing i want is the irs after me since i have done bitcoin taxes according to their rules since 2014. if i have to refile stuff prior to 2014 well so be it.
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August 17, 2017, 12:41:42 PM
 #148

Hello Mr. Greenberg,
I aquire old junk laptops, computer, usb and hard drives for scrap and recycling (usually a as is deal or off the roadside). Let's assume there is a btc wallet stored on such a device, and possibly the keys as well. Assuming I can gain access to the wallet, would I legally be the owner of any coins ?

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August 19, 2017, 12:06:56 PM
 #149

Hi I have a question about using bitcoin. If I run a website where I buy bitcoin from users globally but I don't sell any, do I need to register as a money transmitter or money services business even though I am only buying bitcoins? Does such a website count as an exchange?
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August 20, 2017, 05:12:28 AM
 #150

Hello Mr. Greenberg,
I aquire old junk laptops, computer, usb and hard drives for scrap and recycling (usually a as is deal or off the roadside). Let's assume there is a btc wallet stored on such a device, and possibly the keys as well. Assuming I can gain access to the wallet, would I legally be the owner of any coins ?

No.

George D. Greenberg, Esq.
www.attorneybitcoin.com
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August 20, 2017, 05:14:24 AM
 #151

Hi I have a question about using bitcoin. If I run a website where I buy bitcoin from users globally but I don't sell any, do I need to register as a money transmitter or money services business even though I am only buying bitcoins? Does such a website count as an exchange?

It depends upon your business model, if any, and what you intend to do with the BTC. 

George D. Greenberg, Esq.

www.attorneybitcoin.com
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August 23, 2017, 08:25:35 PM
 #152

Hi I have a question about using bitcoin. If I run a website where I buy bitcoin from users globally but I don't sell any, do I need to register as a money transmitter or money services business even though I am only buying bitcoins? Does such a website count as an exchange?

It depends upon your business model, if any, and what you intend to do with the BTC. 

George D. Greenberg, Esq.

www.attorneybitcoin.com

Assuming that the bitcoins will be used for personal use and/or internationally, how does the business model determine whether or not I would be considered a MT/MSB if I am only buying and never selling?
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August 24, 2017, 06:26:26 AM
 #153

Ah, but that was not your original question. Your original question was regarding a website that you own and use to buy BTC globally, in order to accumulate for yourself only, and whether in so doing whether you would be considered a Money Transmitter or operating a Money Service Business.

Now that you have addressed my response to you I can proceed to discuss. It is my understanding that you would not be considered a Money Service Business by FinCEN. MT requirements vary by state. Your activity would not be considered as MT activity in the State of Nevada where I am located.

Now if you act in a manner that crosses over into regulated activity, such as being given other peoples money to invest, or if you were a business entity,  or you had partners and so on....then you might be considered as running a business in ways that States may view as as MT. There might also may be SEC issues.

There are potential tax issues. If you have been using your accumulated BTC to buy and sell for yourself and you are making a profit, this then becomes subject to capital gains taxes and income tax.

There are laws regarding countries that we are not allowed to conduct business with. This might be an issue if you are purchasing BTC from a person in one of these countries.

Finally, large transactions get the attention of FinCEN. You must be careful that you are not just turning a blind eye to larger transactions that may look suspicious without gathering some information about the seller.

My answers free and intended to be general and should not be relied upon in these areas. You should always seek out paid legal counsel.     

I hope that helps:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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August 26, 2017, 04:49:37 PM
 #154

Hello Mr. Greenberg,

Prediction markets were shut down in the US a while back but now they seem to be doing well on blockchain.

I would like to add prediction market functionality to my website but I don't know if it's something I could get in trouble for.

Is there some legally safe way to offer prediction market services?

Thanks!
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August 28, 2017, 04:39:59 PM
 #155

Ah, but that was not your original question. Your original question was regarding a website that you own and use to buy BTC globally, in order to accumulate for yourself only, and whether in so doing whether you would be considered a Money Transmitter or operating a Money Service Business.

Now that you have addressed my response to you I can proceed to discuss. It is my understanding that you would not be considered a Money Service Business by FinCEN. MT requirements vary by state. Your activity would not be considered as MT activity in the State of Nevada where I am located.

Now if you act in a manner that crosses over into regulated activity, such as being given other peoples money to invest, or if you were a business entity,  or you had partners and so on....then you might be considered as running a business in ways that States may view as as MT. There might also may be SEC issues.

There are potential tax issues. If you have been using your accumulated BTC to buy and sell for yourself and you are making a profit, this then becomes subject to capital gains taxes and income tax.

There are laws regarding countries that we are not allowed to conduct business with. This might be an issue if you are purchasing BTC from a person in one of these countries.

Finally, large transactions get the attention of FinCEN. You must be careful that you are not just turning a blind eye to larger transactions that may look suspicious without gathering some information about the seller.

My answers free and intended to be general and should not be relied upon in these areas. You should always seek out paid legal counsel.     

I hope that helps:

George D. Greenberg, Esq.
www.attorneybitcoin.com

Thanks for the info. Though my original response is the same. I still plan to buy and accumulate bitcoin for myself only. I am just intending to use it as cash for personal use and not sell it nor provide financial services etc.
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August 28, 2017, 08:21:36 PM
 #156

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


Hello and thanks for doing this! I had some questions regarding the recent SEC decision on the DAO token, classifying them as securities.

I've been doing some research on this topic and have not found the exact answer.

1) Basically, I was wondering what are the legal/tax implications when participating in an ICO as an American citizen?
Let's say a US citizen uses a VPN to partake in an ICO. They double their money and then sell. They decide to cash out to fiat (USD) legally and pay the 40% short-term tax on that trade profit (as well as report it) to the IRS.
I heard that ICO providers prevent US citizens from participating to protect themselves legally from the American Government if a scam were to occur. Is this true? I basically come to realize this is a gray area.

2) If someone invests into a crypto months ago and then sells and the SEC determines that it was a security in the future, did that investor break the law? Can retroactive action be applied to this if no firm legal standing was enacted in the first place?

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August 29, 2017, 05:38:24 PM
 #157

1. It is my understanding that some ICO may not be accepting investments from U.S. Citizens in order to avoid being subject to SEC oversight.

2. This question is beyond the scope of my expertise.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com
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August 31, 2017, 01:17:43 AM
 #158

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


Hello and thanks for doing this! I had some questions regarding the recent SEC decision on the DAO token, classifying them as securities.

I've been doing some research on this topic and have not found the exact answer.

1) Basically, I was wondering what are the legal/tax implications when participating in an ICO as an American citizen?
Let's say a US citizen uses a VPN to partake in an ICO. They double their money and then sell. They decide to cash out to fiat (USD) legally and pay the 40% short-term tax on that trade profit (as well as report it) to the IRS.
I heard that ICO providers prevent US citizens from participating to protect themselves legally from the American Government if a scam were to occur. Is this true? I basically come to realize this is a gray area.

2) If someone invests into a crypto months ago and then sells and the SEC determines that it was a security in the future, did that investor break the law? Can retroactive action be applied to this if no firm legal standing was enacted in the first place?



1. second question:  ICO issuers may be cautious not to accept contributions from US citizens for fear of "selling unregistered securities" thereby possibily subjecting the issuers to SEC jurisdiction.

2. Interesting question.  Take a look at https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings.
The focus in the Investor Bulletin are sales by the ICO issuer.  It's not so much whether the investor broke the law rather to help the investor protect against fraud.  

Full disclosure, I am an attorney practicing securities arbitration.  The foregoing is not intended to be legal advice and no attorney-client relationship is implied.

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August 31, 2017, 06:55:34 AM
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Hello Mr. Greenberg,

I am a lawyer from China and am doing some research on Bitcoin/block chain issues.

I understand from various news reports that FBI seized a lot of Bitcoin from Silk Road and BTC-e during previous operations against them, and FBI may sell or may have sold them in the market. I am wondering how FBI can do this. As I understand it, no one can have access to the Bitcoin unless they get the private key to it. How can FBI get the private key to the Bitcoin held by Silk Road or BTC-e? Can FBI force someone to surrender his/her private key? I don't think so.

If I am the owner of some Bitcoin and I memorize the private key in my mind instead of writing it down, is it possible for the law enforcement authority in the US to take my Bitcoin and sell it in the market? If not, does it mean that the Bitcoin may not be subject to enforcement even if there is an effective judgment?

I would appreciate your thoughts. Thanks.

Regards,

Yao Liang
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September 02, 2017, 04:29:56 PM
 #160

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


Did you listen to Rossdale CLE class on bitcoin ? If so, what was your opinion ?
I felt it wasn't comprehensive on certain subject ....
http://www.mcssl.com/store/legalresourcesinc/catalog/product/10a48f46dc5141e99cda0056d1eda08f

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September 02, 2017, 06:04:23 PM
 #161

So if I have records of purchases on coinbase a while ago, and I used that btc to play on chinese bitcoin futures (margin), I never touched fiat, and I increased my bitcoin stash around 800%, and have been holding that bitcoin ever since, should there be any problems with me claiming that bitcoin as long term capital gains tax? What if the chinese bitcoin exchange was hacked and is now gone for some time?

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September 02, 2017, 11:10:15 PM
 #162

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


Hello and thanks for doing this! I had some questions regarding the recent SEC decision on the DAO token, classifying them as securities.

I've been doing some research on this topic and have not found the exact answer.

1) Basically, I was wondering what are the legal/tax implications when participating in an ICO as an American citizen?
Let's say a US citizen uses a VPN to partake in an ICO. They double their money and then sell. They decide to cash out to fiat (USD) legally and pay the 40% short-term tax on that trade profit (as well as report it) to the IRS.
I heard that ICO providers prevent US citizens from participating to protect themselves legally from the American Government if a scam were to occur. Is this true? I basically come to realize this is a gray area.

2) If someone invests into a crypto months ago and then sells and the SEC determines that it was a security in the future, did that investor break the law? Can retroactive action be applied to this if no firm legal standing was enacted in the first place?



1. second question:  ICO issuers may be cautious not to accept contributions from US citizens for fear of "selling unregistered securities" thereby possibily subjecting the issuers to SEC jurisdiction.

2. Interesting question.  Take a look at https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings.
The focus in the Investor Bulletin are sales by the ICO issuer.  It's not so much whether the investor broke the law rather to help the investor protect against fraud.  

Full disclosure, I am an attorney practicing securities arbitration.  The foregoing is not intended to be legal advice and no attorney-client relationship is implied.

The above answers were not from me, George D. Greenberg. The Author failed to identify himself by name.
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September 02, 2017, 11:12:05 PM
 #163

So if I have records of purchases on coinbase a while ago, and I used that btc to play on chinese bitcoin futures (margin), I never touched fiat, and I increased my bitcoin stash around 800%, and have been holding that bitcoin ever since, should there be any problems with me claiming that bitcoin as long term capital gains tax? What if the chinese bitcoin exchange was hacked and is now gone for some time?

I suggest you consult a Certified Public Accountant, Sir.

George D. Greenberg
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September 02, 2017, 11:19:01 PM
 #164

Hello Mr. Greenberg,

I am a lawyer from China and am doing some research on Bitcoin/block chain issues.

I understand from various news reports that FBI seized a lot of Bitcoin from Silk Road and BTC-e during previous operations against them, and FBI may sell or may have sold them in the market. I am wondering how FBI can do this. As I understand it, no one can have access to the Bitcoin unless they get the private key to it. How can FBI get the private key to the Bitcoin held by Silk Road or BTC-e? Can FBI force someone to surrender his/her private key? I don't think so.

If I am the owner of some Bitcoin and I memorize the private key in my mind instead of writing it down, is it possible for the law enforcement authority in the US to take my Bitcoin and sell it in the market? If not, does it mean that the Bitcoin may not be subject to enforcement even if there is an effective judgment?

I would appreciate your thoughts. Thanks.

Regards,

Yao Liang

Dear Yao Liang:

That is a lot of 'if's.' Your worries are speculative as you do not have any current issues. In general, if there is a judgment and you are asked under oath to disclose assets that may be subject to attachment or garnishment to satisfy the judgment, and you refuse to so disclose, you could be held in contempt of court.

George D. Greenberg, Esq.
www.attorneybitcoin.com
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September 03, 2017, 12:46:57 PM
 #165

Hello,

Maybe you can answer me this:

The Bitcoin & crypto exchange C-CEX.com literally stole 358 Dash from my account back in 2014 and used the money to pay other users whose bitcoins had been stolen in a hack that happened a couple months before the incident. After many months they finally refunded me 50 Dash. When I asked for the other 300 they closed my account and banned my IP address. Now in august 2017 308 Dash is worth $100,838
Very little is known about C-CEX.com and who runs it beside that they are based in Ukraine. Could they be associated with BTC-E.com? Could be but I have no proof.

I offered a Bitcoin bounty on Roger Ver's BitcoinBounty.com but no information was ever gathered.

Other users got their digital money stolen from C-CEX as well so I am not excluding a class action lawsuit but for that I need resources and I don't have any at the moment.

What are my other options?

Thanks for taking the time to read this.
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September 04, 2017, 01:59:01 AM
 #166

Hello George,

We're a BTC mining team from South America and we'd like to start mining next year in Trinidad and Tobago. We know is legal there but we wanted to know if there're any laws that you know might prevent us from doing it legally.

Thank you,

Chris
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September 05, 2017, 05:53:13 AM
 #167

Hello,

Maybe you can answer me this:

The Bitcoin & crypto exchange C-CEX.com literally stole 358 Dash from my account back in 2014 and used the money to pay other users whose bitcoins had been stolen in a hack that happened a couple months before the incident. After many months they finally refunded me 50 Dash. When I asked for the other 300 they closed my account and banned my IP address. Now in august 2017 308 Dash is worth $100,838
Very little is known about C-CEX.com and who runs it beside that they are based in Ukraine. Could they be associated with BTC-E.com? Could be but I have no proof.

I offered a Bitcoin bounty on Roger Ver's BitcoinBounty.com but no information was ever gathered.

Other users got their digital money stolen from C-CEX as well so I am not excluding a class action lawsuit but for that I need resources and I don't have any at the moment.

What are my other options?

Thanks for taking the time to read this.

I'm sorry for your losses. I have had a lot of questions recently about frozen, lost, stolen BTC. Is there a pattern emerging here? Were the exchanges prepared for such a huge run up in such a short amount of time? I do not have other options for you, but then again, I'm not a litigation attorney so don't take my word as final. One thing is for sure; it is not wise to keep larger amounts of coin on an exchange.

George D. Greenberg, Esq.
www.attorneybitcoin.com
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September 05, 2017, 05:55:17 AM
 #168

Hello George,

We're a BTC mining team from South America and we'd like to start mining next year in Trinidad and Tobago. We know is legal there but we wanted to know if there're any laws that you know might prevent us from doing it legally.

Thank you,

Chris

Hello Chris. I cannot advise on laws outside of the United States as I simply don't know and have not been engaged to study the same.

Best of luck:

George D. Greenberg, Esq.
www.attorneybitcoin.com
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September 05, 2017, 11:22:24 AM
 #169

what is the best legal structure to have for an ICO?
best place to incorporate?

thank you
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September 06, 2017, 05:33:09 AM
 #170

Please PM me here.

Best:

George Greenberg
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September 07, 2017, 01:36:33 AM
 #171

Thanks for the thread.  I have questions i like to ask.



1.  I know assuming you buy bitcoin and hold it and dont sell, there is no taxes on it.  Now let me use this example.  Let say you bought 10 bitcoin a long time ago for like 500 each.  You held on to it.  However you also sportsbet and play some poker online.  And let say these sites use bitcoin as deposit/withdraw.  So let say you have 5000 usd in a sportsbetting account.  You withdraw from it via btc.  So when you receive the btc, you receive around that amount in btc.  However lets make it simple and say you did not have any sportsbetting winnings.  Now if you withdraw that btc, there is obviously no tax involved right?  Now the other thing is say you deposit that same amount of btc into another sportsbetting site.  Let say when you deposit that amt of btc in another site, they only credit you with 4850 or something like that because most sites charge you a percentage on btc fees.  So here... you actually lost money going from btc to fiat.  But in the first process where you withdraw the 5k fiat into btc, let just say it was around 5k to make it simple.  So basically with this 4850 in your balance in a sportsbook let say you bet sports and just break even again.  Then you cash it out into btc and want to transfer that 4850 usd worth of btc into another sportsbetting site.  The thing is here even though you moved more than 1 btc a few times and it got converted into fiat every time, there is no tax on bitcoin right?  The reason i ask this is because you have 10btc in your wallet.  But now you moved the 1.xx btc few times with sportsbetting sites which converted to fiat.


However, you are not touching your original 10btc.  You are basically using this other btc to move money around sportsbook or poker sites etc.  Because my thought would be... wouldnt they say you cashed out btc 2 or 3 times already and have gains of 4000 btc price -500 btc original buying price so 3500 each times 2 = 7000?  Because it seems like now your original 10btc... 8 of them are at 500 original price and 2 are at 4000 usd price?  I assume there is no way this is done like this right?  I guess you can say its like a First in first out method?  However, if someone needs to use btc to move funds to sportsbooks and poker sites...  its obvious that the original 10 btc that are being held are not touched right?  Because if this was the case, then unless someone holds btc and never even use btc withdrawn from other sites to move... then wouldnt everyone have capital gains immediately?



2.   Do trading sites like bittrex, coinbase and others give 1099?  I heard coinbase does but one person told me he had a 1099 that was so incorrect.  He said they gave him a 1099 which showed like over 100k profit in a year when he made less than 20k i believe.  He said it was because coinbase tracks every btc send and receive as INCOME... which is obviously incorrect.  So i dont plan to use coinbase at all because of it.  But do you know about bittrex?  Because that is what im planning to use to trade altcoins.


3.  If you are trading altcoins for altcoins or btc for altcoins and vice versa, is there a tax on it?  I recall ppl say there is no tax unless that coin is converted into usd.  That makes the most sense.  Because say you trade btc for another coin like lisk.  Thus if you want lisk... you need to trade btc for it.  You cannot even trade usd for it.  So say you made a 1k profit on lisk.  However the profit is in BTC... its not in usd.  But every sale you make that has profit is capital gains right?  But how are these gains even computed?  Let say this.  Let say you traded 10k worth of btc for 10k worth of lisk.  Lisk goes up 50 percent.  You selll it and make around 5k in profit minus fees so let say 4800 usd worth of profit.  However this profit is in btc ON THAT DAY.  So what happens if u just keep the btc as it is.  Let say btc drops a bit and now your profit is only 4300 etc.  But are you suppose to record the profit on that day.. or the last day of the calendar year?  The thing is if you are a usd balance in your account and say you use 10k usd to buy 10k worth of lisk.  Then say you sold it for 15k usd.  Then sure... its easy to say the profit is like 4800 usd after fees.  But if its in BTC AND YOU HAVEN'T CASHED ANY BTC OUT... how do you even record gains?  I believe i read trading altcoin to altcoin counts tax.  But how is it even possible when the profit is in BTC?  Your profit is fluctuation all the time.  Say you profited 1.1 btc from trading btc for lisk.  But after a while that 1.1 btc is only worth 3500.  Later on its 3800.  What is even the amount you tax it at?  Unless you convert it to usd... how do you even record a tax?



4.  I heard you get taxed on long term and short term gains.  How much percentage is each?  And how long is each?


5.  If someone bought btc a long time ago let say $10000 worth.  Let just say that btc turned into 250000 usd.  How much percentage in that tax would that person has to pay?  I know it depends on what state you are but let say you are in the highest tax state which i believe is california.  If someone makes like 240000 usd holding btc and then selling it... would he get taxed like 30-35 percent?  Or would it be like 15-20 percent etc?  So basically if someone makes 250k trading btc... they pay less tax as oppose to do them working a regular job because capital gains is only 15 percent?  However they also have to pay self employment tax so it adds up to at least 30 percent?  So if someone is a professional sportsbettor or poker player and makes 50k... that person would pay more tax than someone who trades btc and make the same 50k even though both are self employed?  Because from this, im assuming if you make most of your money on capital gains, you pay less tax than a regular job or a professional gambler etc?


6.  Related to the question about the 1099.  So if sites like bittrex i believe reports to the irs... is this true or not?  Then what numbers are they giving to the irs?  I assume all the numbers?  The thing is wouldn't there be issues because if someone withdraws 15k worth of btc from the site.  But say 13k worth of btc was theres?  Thus they only had 2k profit but bittrex would say its 15k?  So how do traders even record their profit/loss for taxes when you sell and buy but its NOT IN USD?  thus its in btc to other altcoins etc?  This is really confusing because the same btc now could be worth much less or more later on.  And if u dont cash your btc out, then how is there any profit? 


7.  What happens if you profit a good amount trading but never cashed any btc into fiat.  Thus the btc profit is always in an exchange or your btc wallet.  Say you make 50k trading.  But u did not cash any of it out.  So you are suppose to report 50k even though you never turned any btc into cash and never cashed it out to your bank account?  So what happens if next year you lose 50k worth of btc trading?  So you pay tax on 50k trading one year... do you get back your taxes paid the next year if you lose the 50k back etc?



I know i posted quite a bit of questions.  I have not traded yet still because im not sure how taxes work with btc since i found out on bittrex... if u want to buy altcoins, u need to use btc and u cannot use usd.  That just makes it so confusing.


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. COMSA
ICO: Oct 2 - Nov 6
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September 07, 2017, 04:12:30 AM
 #172

Thanks for the thread.  I have questions i like to ask.



1.  I know assuming you buy bitcoin and hold it and dont sell, there is no taxes on it.  Now let me use this example.  Let say you bought 10 bitcoin a long time ago for like 500 each.  You held on to it.  However you also sportsbet and play some poker online.  And let say these sites use bitcoin as deposit/withdraw.  So let say you have 5000 usd in a sportsbetting account.  You withdraw from it via btc.  So when you receive the btc, you receive around that amount in btc.  However lets make it simple and say you did not have any sportsbetting winnings.  Now if you withdraw that btc, there is obviously no tax involved right?  Now the other thing is say you deposit that same amount of btc into another sportsbetting site.  Let say when you deposit that amt of btc in another site, they only credit you with 4850 or something like that because most sites charge you a percentage on btc fees.  So here... you actually lost money going from btc to fiat.  But in the first process where you withdraw the 5k fiat into btc, let just say it was around 5k to make it simple.  So basically with this 4850 in your balance in a sportsbook let say you bet sports and just break even again.  Then you cash it out into btc and want to transfer that 4850 usd worth of btc into another sportsbetting site.  The thing is here even though you moved more than 1 btc a few times and it got converted into fiat every time, there is no tax on bitcoin right?  The reason i ask this is because you have 10btc in your wallet.  But now you moved the 1.xx btc few times with sportsbetting sites which converted to fiat.


However, you are not touching your original 10btc.  You are basically using this other btc to move money around sportsbook or poker sites etc.  Because my thought would be... wouldnt they say you cashed out btc 2 or 3 times already and have gains of 4000 btc price -500 btc original buying price so 3500 each times 2 = 7000?  Because it seems like now your original 10btc... 8 of them are at 500 original price and 2 are at 4000 usd price?  I assume there is no way this is done like this right?  I guess you can say its like a First in first out method?  However, if someone needs to use btc to move funds to sportsbooks and poker sites...  its obvious that the original 10 btc that are being held are not touched right?  Because if this was the case, then unless someone holds btc and never even use btc withdrawn from other sites to move... then wouldnt everyone have capital gains immediately?



2.   Do trading sites like bittrex, coinbase and others give 1099?  I heard coinbase does but one person told me he had a 1099 that was so incorrect.  He said they gave him a 1099 which showed like over 100k profit in a year when he made less than 20k i believe.  He said it was because coinbase tracks every btc send and receive as INCOME... which is obviously incorrect.  So i dont plan to use coinbase at all because of it.  But do you know about bittrex?  Because that is what im planning to use to trade altcoins.


3.  If you are trading altcoins for altcoins or btc for altcoins and vice versa, is there a tax on it?  I recall ppl say there is no tax unless that coin is converted into usd.  That makes the most sense.  Because say you trade btc for another coin like lisk.  Thus if you want lisk... you need to trade btc for it.  You cannot even trade usd for it.  So say you made a 1k profit on lisk.  However the profit is in BTC... its not in usd.  But every sale you make that has profit is capital gains right?  But how are these gains even computed?  Let say this.  Let say you traded 10k worth of btc for 10k worth of lisk.  Lisk goes up 50 percent.  You selll it and make around 5k in profit minus fees so let say 4800 usd worth of profit.  However this profit is in btc ON THAT DAY.  So what happens if u just keep the btc as it is.  Let say btc drops a bit and now your profit is only 4300 etc.  But are you suppose to record the profit on that day.. or the last day of the calendar year?  The thing is if you are a usd balance in your account and say you use 10k usd to buy 10k worth of lisk.  Then say you sold it for 15k usd.  Then sure... its easy to say the profit is like 4800 usd after fees.  But if its in BTC AND YOU HAVEN'T CASHED ANY BTC OUT... how do you even record gains?  I believe i read trading altcoin to altcoin counts tax.  But how is it even possible when the profit is in BTC?  Your profit is fluctuation all the time.  Say you profited 1.1 btc from trading btc for lisk.  But after a while that 1.1 btc is only worth 3500.  Later on its 3800.  What is even the amount you tax it at?  Unless you convert it to usd... how do you even record a tax?



4.  I heard you get taxed on long term and short term gains.  How much percentage is each?  And how long is each?


5.  If someone bought btc a long time ago let say $10000 worth.  Let just say that btc turned into 250000 usd.  How much percentage in that tax would that person has to pay?  I know it depends on what state you are but let say you are in the highest tax state which i believe is california.  If someone makes like 240000 usd holding btc and then selling it... would he get taxed like 30-35 percent?  Or would it be like 15-20 percent etc?  So basically if someone makes 250k trading btc... they pay less tax as oppose to do them working a regular job because capital gains is only 15 percent?  However they also have to pay self employment tax so it adds up to at least 30 percent?  So if someone is a professional sportsbettor or poker player and makes 50k... that person would pay more tax than someone who trades btc and make the same 50k even though both are self employed?  Because from this, im assuming if you make most of your money on capital gains, you pay less tax than a regular job or a professional gambler etc?


6.  Related to the question about the 1099.  So if sites like bittrex i believe reports to the irs... is this true or not?  Then what numbers are they giving to the irs?  I assume all the numbers?  The thing is wouldn't there be issues because if someone withdraws 15k worth of btc from the site.  But say 13k worth of btc was theres?  Thus they only had 2k profit but bittrex would say its 15k?  So how do traders even record their profit/loss for taxes when you sell and buy but its NOT IN USD?  thus its in btc to other altcoins etc?  This is really confusing because the same btc now could be worth much less or more later on.  And if u dont cash your btc out, then how is there any profit? 


7.  What happens if you profit a good amount trading but never cashed any btc into fiat.  Thus the btc profit is always in an exchange or your btc wallet.  Say you make 50k trading.  But u did not cash any of it out.  So you are suppose to report 50k even though you never turned any btc into cash and never cashed it out to your bank account?  So what happens if next year you lose 50k worth of btc trading?  So you pay tax on 50k trading one year... do you get back your taxes paid the next year if you lose the 50k back etc?



I know i posted quite a bit of questions.  I have not traded yet still because im not sure how taxes work with btc since i found out on bittrex... if u want to buy altcoins, u need to use btc and u cannot use usd.  That just makes it so confusing.

In Order:

1. You are asking about sport betting sites which is for the most part illegal in the United States. In Nevada a resident may have an online or mobile account so long as it is with a licensed sport book and any wagers are made while in the state only. However the books here don't take BTC. Therefore, you are asking me to comment upon potential unlawful activity and I will not do that. However you could substitute trading platforms/exchanges for the sport betting sites in your fact pattern and the same taxation issues would be still be there. As to the taxation issues you have asked about, I am not a tax attorney nor am I a C.P.A. I suggest you consult with a professional who practices in these areas in order to sort it all out for you.

2. I have not to date received a 1099 from Bittrex for my personal trading. However the exchanges reporting and information gathering requirements seem to toughen in direct proportion to the heat they may be receiving from regulatory agencies including the SEC, FinCEN and Treasury.

3.  Your questions are the same that confound thousands of crypto investors. To get comprehensive answers you need to hire a tax attorney or a C.P.A. There are many different variations as you have pointed out so there are bound to be different answers depending upon the different fact patterns.

4. 5. and 6.   See 3 above.

7. Until you sell for fiat or use to purchase goods or services you have no taxable gain.

Yes, you need BTC to purchase other crypto-coins and tokens. Welcome to the crypto world.
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September 07, 2017, 04:33:48 AM
 #173

Hi there thanks for the response.


So basically you are saying this.


Say i have 5 btc that i want to use to trade on bittrex.  So during this time the btc is either in bittrex or my bitcoin wallet because i read its better to keep btc in your wallet for security issues.


I trade for other altcoins etc to do trades as i read this is what is needed which again i find strange because i figure usd would make the most sense.  Let say i make 10btc in a year doing this.  So now my bitcoin balance  goes up from 5 btc to 15btc.  But i never turn any of these btc into usd. 


Thus you are basically saying if btc and altcoins never get converted into fiat, then there is no tax on it?  So basically someone could trade for one whole year and make say 10 btc and have 15 btc in their wallet.  But they do not have to pay any tax until they cash it to usd?  So basically someone could trade for years and could turn that 5btc into 35 btc and not pay any tax until they cash out?  So when they do cashout, then they pay their tax right?  Because if this is true, then im going to start trading very soon because i had thought you had to pay taxes on trades even if its altcoin to altcoin. 


Can you confirm this?  Because i had thought trading altcoin to altcoin there is no tax.  But i read someone posted in a forum not sure if its this one or not where there is tax even if its altcoin to altcoin.  But if you dont cash it to usd... how can you even record it because your profits would be in btc and that price is changing all the time.  And also since you havent turned it into usd.


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. COMSA
ICO: Oct 2 - Nov 6
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Ardiansyah12345
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September 07, 2017, 09:25:31 AM
 #174

Thanks for the explanation.
I now understand.
why legal bitcoin in some countries.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

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September 07, 2017, 05:49:59 PM
 #175

Also... you say

7. Until you sell for fiat or use to purchase goods or services you have no taxable gain.


Are you 100 percent sure about this?  I checked reddit and alot of other threads on this and it seems many accountants say there is a gain even if you go from altcoin to altcoin.  A few ppl say you dont but majority say you do.


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. COMSA
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September 08, 2017, 12:16:48 AM
 #176

Regarding ALT coins, wouldn't it be safe to simplify and say that as long as purchasers agree that this is not a security, not an investment, that covers the company offering an ICO?

Where do these fit in:
1.no US customers/purchasers
2. and/or accredited investors only
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September 08, 2017, 02:04:14 AM
 #177

Dear BTC/Crypto Legal Forum:

As an experienced BTC attorney I'm happy to answer all questions here.

I have noticed some misinformation in some answers here. When it comes to taxes, laws and regulations, guessing or opinions are not helpful and can easily lead to problems. Most solutions to all the questions here can be summed up in a few short answers.

I can only give legal advice to laws in the United States but can discuss other countries in general terms. I've been involved as an attorney and a miner in BTC and Crypto's for 3 years. During that time I have represented many client's involved in our crypto world. Happy Mining!

George D. Greenberg, Esq.
AttorneyBitcoin
Las Vegas, Nevada, U.S.A.
www.attorneybitcoin.com


Hello and thanks for doing this! I had some questions regarding the recent SEC decision on the DAO token, classifying them as securities.

I've been doing some research on this topic and have not found the exact answer.

1) Basically, I was wondering what are the legal/tax implications when participating in an ICO as an American citizen?
Let's say a US citizen uses a VPN to partake in an ICO. They double their money and then sell. They decide to cash out to fiat (USD) legally and pay the 40% short-term tax on that trade profit (as well as report it) to the IRS.
I heard that ICO providers prevent US citizens from participating to protect themselves legally from the American Government if a scam were to occur. Is this true? I basically come to realize this is a gray area.

2) If someone invests into a crypto months ago and then sells and the SEC determines that it was a security in the future, did that investor break the law? Can retroactive action be applied to this if no firm legal standing was enacted in the first place?



1. second question:  ICO issuers may be cautious not to accept contributions from US citizens for fear of "selling unregistered securities" thereby possibily subjecting the issuers to SEC jurisdiction.

2. Interesting question.  Take a look at https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings.
The focus in the Investor Bulletin are sales by the ICO issuer.  It's not so much whether the investor broke the law rather to help the investor protect against fraud.  

Full disclosure, I am an attorney practicing securities arbitration.  The foregoing is not intended to be legal advice and no attorney-client relationship is implied.

The above answers were not from me, George D. Greenberg. The Author failed to identify himself by name.

I believe that is obvious, Mr. Greenberg.  Stating that I "failed" to do anything implies I did something wrong, to which I disagree.  Nevertheless, my commentary is correct.

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September 08, 2017, 02:07:11 AM
 #178

Regarding ALT coins, wouldn't it be safe to simplify and say that as long as purchasers agree that this is not a security, not an investment, that covers the company offering an ICO?

Where do these fit in:
1.no US customers/purchasers
2. and/or accredited investors only

Unfortunately, purchasers cannot waive the status of an offering from a security to a non-security.  The issuer cannot have the purchaser waive the issuer's non-compliance with any securities regulation.  Bottom line, the onus is on the issuer.


Full disclosure, I am an attorney practicing securities arbitration.  The foregoing is not intended to be legal advice and no attorney-client relationship is implied.

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September 08, 2017, 03:42:52 AM
 #179

I thought crypto was classified as property and not securities? If so, the securities rules wouldn't necessarily apply, right?

But let's say that crypto is a security. On top of that, let's say that every transaction, including exchanges between coins are taxable events. How exactly would that work out at tax time, on a practical level? I would think the easiest way is to track the valuation of each coin against say, USD, at both the time of buy/mine and exchange, but that's a huge amount of historical data to maintain, on top of keeping the historical transaction dates/amounts. Does someone care to opine on this?

I believe in paying my taxes so I want to get it right, but frankly it seems to me that even the regulators are kind of confused on this whole area and not providing much in the way of guidance.

Saw this article on Coindesk today, hope this goes through.
https[Suspicious link removed]mption-bitcoin-transactions-600/
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September 09, 2017, 07:51:04 AM
 #180

George,

I just sent you a PM. When you get a chance please read it.

Thanks!
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September 11, 2017, 04:29:05 AM
 #181

Also... you say

7. Until you sell for fiat or use to purchase goods or services you have no taxable gain.


Are you 100 percent sure about this?  I checked reddit and alot of other threads on this and it seems many accountants say there is a gain even if you go from altcoin to altcoin.  A few ppl say you dont but majority say you do.

If you are making profit, you are responsible for any taxes on that profit. However, you have only made theoretical fiat profit. Until you convert to fiat or purchase goods and services with the profit then you have not realized a fiat gain. So yes, keep track, consult a CPA or Tax Attorney and by all means pay any taxes you owe.

There is no question that there are overlapping explanations and some conflict. 
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September 11, 2017, 04:30:55 AM
 #182

Regarding ALT coins, wouldn't it be safe to simplify and say that as long as purchasers agree that this is not a security, not an investment, that covers the company offering an ICO?

Where do these fit in:
1.no US customers/purchasers
2. and/or accredited investors only

Unfortunately, purchasers cannot waive the status of an offering from a security to a non-security.  The issuer cannot have the purchaser waive the issuer's non-compliance with any securities regulation.  Bottom line, the onus is on the issuer.


Full disclosure, I am an attorney practicing securities arbitration.  The foregoing is not intended to be legal advice and no attorney-client relationship is implied.

THE ABOVE ANSWER DID NOT COME FROM GEORGE D. GREENBERG.
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September 11, 2017, 04:44:00 AM
 #183

What can you say about tax laws in Canada for bitcoins?

If I was to cash out bitcoins do I have to pay tax or is there no law for it yet?
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September 13, 2017, 04:36:09 AM
 #184

What can you say about tax laws in Canada for bitcoins?

If I was to cash out bitcoins do I have to pay tax or is there no law for it yet?

When I find some time to study law in Canada I'll let you know. I'm an attorney licensed in the State of Nevada, United States. I'm sure that there are attorneys in Canada that can answer your questions. Perhaps google the same. Vancouver always sounded like a nice place to me. I hope to visit there one day. Good luck.
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September 19, 2017, 11:39:50 AM
 #185

What are the legalities for running a website like https://satoshibox.com and https://xmrlotto.com? Their terms are fairly poorly-worded. What troubles are they likely to face? I have a million ideas like this and I'm just too ignorant of the law and figure I'll end up getting sued or something. I'm in the UK, but I'll take the US answer over none at all.
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October 13, 2017, 09:08:53 AM
 #186

Hello dear,

Considering the law and new bitcoin regulations created by Dept of finance, it's very unlear for most of new yorkers whether trading crypto is legal or not. Many would hide their identeties. As a proud resident of new york city - am I eligible for trading crypto in NYC ? Bittrex is claiming that they carry bitcoinlicense which supposely makes their services legal in new york. Can I use their services without being punished for law violation? Or do i need to move to another state such as New Jersey? Huh
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October 25, 2017, 07:00:08 AM
 #187

Like many, I have opted not to advise New York State residents regarding their BTC laws. It is a sub specialty that is unique to your beautiful state. New York tends to lead the nation in many things. 
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October 26, 2017, 02:52:13 PM
 #188

I have Green Card for about 2 years. For the last 1.5 years I lived mostly outside of US (except 35 days).
I have crypto that I bought N days ago, if I sell it now then since I am GC holder I will need to pay capital gain taxes. My question
what if surrender my GC? Do I need to pay any US capital gain taxes if I sell it next day after GC surrender (after visit US Embassy)?
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October 31, 2017, 12:51:55 AM
 #189

In the US, if businesses were to pay each other with crypto, would contracts be enforceable? How would accounting of those funds work if you never cash out?
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November 01, 2017, 06:43:47 PM
 #190

In the US, if businesses were to pay each other with crypto, would contracts be enforceable? How would accounting of those funds work if you never cash out?

Any legal agreement/contract is enforceable I could write down on a piece of paper a contract of you paying me $20 for 5 sweets and I would be legally required to follow that contract too the letter the same as you.

Veritas Mining

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BCFX1
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November 01, 2017, 09:15:12 PM
 #191

Hello Mr. Greenberg,

What is your opinion of Florida's Money Laundering Statute regarding buying and selling Bitcoin online and in person for cash?

https://www.coindesk.com/floridas-money-laundering-statute-wont-affect-most-bitcoin-users/

Thank you.

BCFX1



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November 01, 2017, 10:11:19 PM
 #192

Do you or do you know anyone who can help file a lawsuit regarding a scammer person and a website- Purse.io that facilitated his scams? i have the evidence.
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November 02, 2017, 04:18:04 PM
 #193

Thank for taking the time to do this as many of the laws regarding this can be rather confusing and complex.

As for my question:

If i start a mining farm operation in the Midwest (Indiana or Michigan) do I need to get an MSB license. From my understanding of FINCEN I would not need one as long as I am NOT providing a service or selling to an individual. If the company exchanges the crypocurrency for Fiat on Coinbase, which has a MSB license, would we be covered by proxy since we are not actually selling to an individual or providing some service to others.

A following up question would be in regards to using NiceHash. Since Nicehash sells hashing power to an individual, you as a miner are technically providing a service for someone, thus needing an MSB license. So at that point would we not be able to use Nicehash. or am i misunderstanding this?
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November 03, 2017, 04:41:51 PM
 #194

While I appreciate the attempt to reconcile all legal matters concerning cryptocurrencies, I do not think the laws of the US applies to all sovereign jurisdictions. Nonetheless, I know for a fact that there are laws that are general in nature, like for instance, common laws; yet again, we have varying laws per State vis-a-vis the policies of ones government and one cannot be made to apply to the other. So, as for me, I think it is still best to consult your local counsels for legal matters.

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November 05, 2017, 02:32:04 AM
 #195

How do taxes work with cashing out? What if you're a business that pays another business with crypto? How do you account for that? What would contracts need to cover?