Why are people so eager to pay tax?

[NewLiberty]

I do not care about my country, because it does not care about me.
They spend it on all kinds of bullshit.
I'm already a slave to their tax system, from a birth, If there's a way to avoid it, I would go for it without any doubt.
I should not care about other people (the society) too, because it's a rat race, you can only survive by walking on other people's heads.

My experience is entirely different.
I've found survival requirements to be most easily satisfied by providing something which society values, or at minimum, individual members of society. 
Rather than walking on heads, helping others more easily walk on their own feet can be quite rewarding, and I recommend it heartily.

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[PrintMule]

I do not care about my country, because it does not care about me.
They spend it on all kinds of bullshit.
I'm already a slave to their tax system, from a birth, If there's a way to avoid it, I would go for it without any doubt.
I should not care about other people (the society) too, because it's a rat race, you can only survive by walking on other people's heads.

My experience is entirely different.
I've found survival requirements to be most easily satisfied by providing something which society values, or at minimum, individual members of society. 
Rather than walking on heads, helping others more easily walk on their own feet can be quite rewarding, and I recommend it heartily.

I've considered myself "mr nice guy, always to lend a hand" to a point in my life, where I'm almost broke.
Although it's hard to make a sudden change - now I try to be more selfish, and it works out much better, at least I'm halfway out of my debts, and the only waste of time I allow myself - are 1-2 forums like this and a movie now and then. There is quite a lot of thieves around, and it's hard to keep up, if you want a little bite for your piece of happiness and welfare.

[JohnyBigs]

there is taxing on bartering, but the argument above seems to point at services and "profit-generating activity". In the above they are exchanging services for a specific dollar amount. There is no mention of exchanging a good for equal value of another good. For example if you take 4BTC and convert it into equal value of 24 Silver Coins, you did not earn any income you just converted value. It's like exchanging cheese or knives, even if the act itself is taxable since you are exchanging for an equal value there won't be a taxable event. Not to mention that exchanging goods is not mentioned at all.

Think about that for a second. If the IRS enforced the tax code using your interpretation there would be no such thing as taxable income. When a dealership trades you a car worth $20000 for $20000 in dollars that is an equal value trade yet the IRS very clearly demands a cut of the transaction.

Regardless of whether you think your definition is correct they'll still throw you in jail and confiscate your property if they catch you trying to use it. What they actually do is treat all received value as profit and then let you subtract certain types of expenses from that in order to calculate your income.

In the plumber and carpenter case if the IRS scrutinized the transaction the auditor would assess a dollar value for each service and then allow each person to claim the expenses they incurred by performing their respective portions, and the difference would be expected to be accounted for as income.

If you ever want to know which interpretation of the tax code is the one the IRS won't kidnap you, throw you in a cage, and steal your property for, just assume it's the interpretation that gives them the most money.

your example isn't correct. The dealer is giving you fiat money in return, he is not exchanging for example a pick up truck for a car. There is no taxable event If I trade you my car for another car. It's like saying I gave you 10 tomatoes and you gave me 5 potatoes in return there is no income event. They clearly are only talking about services rendered as that would of been income earned.

[justusranvier]

There is no taxable event If I trade you my car for another car. It's like saying I gave you 10 tomatoes and you gave me 5 potatoes in return there is no income event. They clearly are only talking about services rendered as that would of been income earned.

Wrong.

In your example, you have earned income equal to the dollar value of 10 tomatoes and I have earned income equal to the dollar value of 5 potatoes.

Each one of us is required to report this income as additional income on our income tax returns, although in practice nobody does and it's virtually impossible to enforce.

Depending on the circumstance we may or may not be able to deduct as business expenses the costs of obtaining the tomatoes and potatoes and in that case we'd effectively only owe taxes on the profit of that trade.

[JohnyBigs]

There is no taxable event If I trade you my car for another car. It's like saying I gave you 10 tomatoes and you gave me 5 potatoes in return there is no income event. They clearly are only talking about services rendered as that would of been income earned.

Wrong.

In your example, you have earned income equal to the dollar value of 10 tomatoes and I have earned income equal to the dollar value of 5 potatoes.

Each one of us is required to report this income as additional income on our income tax returns, although in practice nobody does and it's virtually impossible to enforce.

Depending on the circumstance we may or may not be able to deduct as business expenses the costs of obtaining the tomatoes and potatoes and in that case we'd effectively only owe taxes on the profit of that trade.

I found the actual IRS guidence:

Topic 420 - Bartering Income
Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. You must include in gross income in the year of receipt the fair market value of goods and services received in exchange for goods or services you provide or may provide under the bartering arrangement.

Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business or Form 1040, Schedule C-EZ (PDF), Net Profit from Business. If you failed to report this income, correct your return by filing a Form 1040X (PDF). Refer to Topic 308 for amended return information.

A barter exchange or barter club is any organization with members or clients or persons who contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis.

The Internet has provided a medium for new growth in the bartering exchange industry. This growth prompts the following reminder: Barter exchanges are required to file Form 1099-B (PDF), Proceeds From Broker and Barter Exchange Transactions for all transactions unless they meet certain exceptions. Refer to Bartering in Publication 525, Taxable and Nontaxable Income, and the Form 1099-B Instructions for additional information on this subject. Persons who do not contract a barter exchange but who trade services are not required to file Form 1099-B. However, they may be required to file Form 1099-MISC (PDF). If you are in a business or trade, you may be able to deduct certain costs you incurred to perform the work that was bartered. If you exchanged property or services through a barter exchange, you should receive a Form 1099­B. The IRS also will receive the same information.

Please refer to our Bartering Tax Center page for more information on bartering income and bartering exchanges.

If you receive income from bartering, you may be required to make estimated tax payments. Refer to Publication 525, Taxable and Nontaxable Income, for additional information.

The question is does this apply for equal barter income? Even if they do, is there any tax liability if you exchange $2000 worth of BitCoin for $2000 worth of Gold there is no profit therefore shouldn't be any taxes.

Or I guess the taxable event already has occurred when you barter so the income is realized when the exchange occurs. For example:

1. You exchange $100 of BitCoin for $100 dollars of Silver.
2. You pay tax on $100 of income.
3. If you sell your Silver for Fiat for $100 as you have already claimed the $100 in income. You should theoretically only pay tax on any gains above $100

If there are any accountant's/lawyers here can you please clarify this?

[NewLiberty]

The question is does this apply for equal barter income? Even if they do, is there any tax liability if you exchange $2000 worth of BitCoin for $2000 worth of Gold there is no profit therefore shouldn't be any taxes.

Or I guess the taxable event already has occurred when you barter so the income is realized when the exchange occurs. For example:

1. You exchange $100 of BitCoin for $100 dollars of Silver.
2. You pay tax on $100 of income.
3. If you sell your Silver for Fiat for $100 as you have already claimed the $100 in income. You should theoretically only pay tax on any gains above $100

If there are any accountant's/lawyers here can you please clarify this?

The taxable event there occurred before #1.
Gaining the Bitcoin can be taxable, and you can deduct your costs (mining, electricity and etc) if you kept good records and itemize.
The other exchanges are no more taxable than exchanging dollars for euros (they are not income, they are exchange).
Income tax applies to earned income.
#3 may be taxable if there is a gain, and it would be at capital gain rates, however depending on the type and amount of silver, it may or may not have a reporting requirement. (The New Liberty Dollars do not trigger such a reporting requirement as they are outside the CFTC list)
The gain incurs tax liability either way though.

But don't rely on my advice, listen to your own (paid for) tax lawyer.

[JohnyBigs]

The question is does this apply for equal barter income? Even if they do, is there any tax liability if you exchange $2000 worth of BitCoin for $2000 worth of Gold there is no profit therefore shouldn't be any taxes.

Or I guess the taxable event already has occurred when you barter so the income is realized when the exchange occurs. For example:

1. You exchange $100 of BitCoin for $100 dollars of Silver.
2. You pay tax on $100 of income.
3. If you sell your Silver for Fiat for $100 as you have already claimed the $100 in income. You should theoretically only pay tax on any gains above $100

If there are any accountant's/lawyers here can you please clarify this?

The taxable event there occurred before #1.
Gaining the Bitcoin can be taxable, and you can deduct your costs (mining, electricity and etc) if you kept good records and itemize.
The other exchanges are no more taxable than exchanging dollars for euros (they are not income, they are exchange).
Income tax applies to earned income.
#3 may be taxable if there is a gain, and it would be at capital gain rates, however depending on the type and amount of silver, it may or may not have a reporting requirement. (The New Liberty Dollars do not trigger such a reporting requirement as they are outside the CFTC list)
The gain incurs tax liability either way though.

But don't rely on my advice, listen to your own (paid for) tax lawyer.

It makes sense, but I'm not 100% sure. With your example a mining company that mined 1000oz of gold would list profits on that 1000oz even if they didn't sell any? But it could very well be that way. Or another example it's like a company producing shirts, they produce 100 shirts but haven't sold any, that is not income.

[NewLiberty]

The question is does this apply for equal barter income? Even if they do, is there any tax liability if you exchange $2000 worth of BitCoin for $2000 worth of Gold there is no profit therefore shouldn't be any taxes.

Or I guess the taxable event already has occurred when you barter so the income is realized when the exchange occurs. For example:

1. You exchange $100 of BitCoin for $100 dollars of Silver.
2. You pay tax on $100 of income.
3. If you sell your Silver for Fiat for $100 as you have already claimed the $100 in income. You should theoretically only pay tax on any gains above $100

If there are any accountant's/lawyers here can you please clarify this?

The taxable event there occurred before #1.
Gaining the Bitcoin can be taxable, and you can deduct your costs (mining, electricity and etc) if you kept good records and itemize.
The other exchanges are no more taxable than exchanging dollars for euros (they are not income, they are exchange).
Income tax applies to earned income.
#3 may be taxable if there is a gain, and it would be at capital gain rates, however depending on the type and amount of silver, it may or may not have a reporting requirement. (The New Liberty Dollars do not trigger such a reporting requirement as they are outside the CFTC list)
The gain incurs tax liability either way though.

But don't rely on my advice, listen to your own (paid for) tax lawyer.

It makes sense, but I'm not 100% sure. With your example a mining company that mined 1000oz of gold would list profits on that 1000oz even if they didn't sell any? But it could very well be that way. Or another example it's like a company producing shirts, they produce 100 shirts but haven't sold any, that is not income.

The difference being that Gold is classed as a currency, and as of this year's guidance, so are virtual currencies.

[JohnyBigs]

The question is does this apply for equal barter income? Even if they do, is there any tax liability if you exchange $2000 worth of BitCoin for $2000 worth of Gold there is no profit therefore shouldn't be any taxes.

Or I guess the taxable event already has occurred when you barter so the income is realized when the exchange occurs. For example:

1. You exchange $100 of BitCoin for $100 dollars of Silver.
2. You pay tax on $100 of income.
3. If you sell your Silver for Fiat for $100 as you have already claimed the $100 in income. You should theoretically only pay tax on any gains above $100

If there are any accountant's/lawyers here can you please clarify this?

The taxable event there occurred before #1.
Gaining the Bitcoin can be taxable, and you can deduct your costs (mining, electricity and etc) if you kept good records and itemize.
The other exchanges are no more taxable than exchanging dollars for euros (they are not income, they are exchange).
Income tax applies to earned income.
#3 may be taxable if there is a gain, and it would be at capital gain rates, however depending on the type and amount of silver, it may or may not have a reporting requirement. (The New Liberty Dollars do not trigger such a reporting requirement as they are outside the CFTC list)
The gain incurs tax liability either way though.

But don't rely on my advice, listen to your own (paid for) tax lawyer.

It makes sense, but I'm not 100% sure. With your example a mining company that mined 1000oz of gold would list profits on that 1000oz even if they didn't sell any? But it could very well be that way. Or another example it's like a company producing shirts, they produce 100 shirts but haven't sold any, that is not income.

The difference being that Gold is classed as a currency, and as of this year's guidance, so are virtual currencies.

Where did you get this information? Gold is a commodity or a physical good. The only metals that are classified as currencies are ones physically produced as legal tender from the treasury. Neither can a digital currency be classified as legal currency, unless it is produced from the Treasury.

[justusranvier]

The question is does this apply for equal barter income? Even if they do, is there any tax liability if you exchange $2000 worth of BitCoin for $2000 worth of Gold there is no profit therefore shouldn't be any taxes.

If a supermarket sells 10 tomatoes, they have to report that revenue for tax purposes. It doesn't matter if they get paid in dollars, potatoes, gold, or bitcoins, or air guitars. The same rule applies for individuals who are bartering.

What's a little different is that the customer who is buying tomatoes with dollars normally doesn't treat this as income for tax purposes (selling dollars for tomatoes), but when barter or non-dollar currencies are involved the IRS is more likely to insist that it should be treated as income for both parties, should that transaction ever be audited.

[NewLiberty]

The question is does this apply for equal barter income? Even if they do, is there any tax liability if you exchange $2000 worth of BitCoin for $2000 worth of Gold there is no profit therefore shouldn't be any taxes.

Or I guess the taxable event already has occurred when you barter so the income is realized when the exchange occurs. For example:

1. You exchange $100 of BitCoin for $100 dollars of Silver.
2. You pay tax on $100 of income.
3. If you sell your Silver for Fiat for $100 as you have already claimed the $100 in income. You should theoretically only pay tax on any gains above $100

If there are any accountant's/lawyers here can you please clarify this?

The taxable event there occurred before #1.
Gaining the Bitcoin can be taxable, and you can deduct your costs (mining, electricity and etc) if you kept good records and itemize.
The other exchanges are no more taxable than exchanging dollars for euros (they are not income, they are exchange).
Income tax applies to earned income.
#3 may be taxable if there is a gain, and it would be at capital gain rates, however depending on the type and amount of silver, it may or may not have a reporting requirement. (The New Liberty Dollars do not trigger such a reporting requirement as they are outside the CFTC list)
The gain incurs tax liability either way though.

But don't rely on my advice, listen to your own (paid for) tax lawyer.

It makes sense, but I'm not 100% sure. With your example a mining company that mined 1000oz of gold would list profits on that 1000oz even if they didn't sell any? But it could very well be that way. Or another example it's like a company producing shirts, they produce 100 shirts but haven't sold any, that is not income.

The difference being that Gold is classed as a currency, and as of this year's guidance, so are virtual currencies.

Where did you get this information? Gold is a commodity or a physical good. The only metals that are classified as currencies are ones physically produced as legal tender from the treasury. Neither can a digital currency be classified as legal currency, unless it is produced from the Treasury.

Yes, gold is also a commodity.  Most all currency are also commodities really.  Monex vs comex notwithstanding.

The information comes from the Bank for International Settlements (BIS) located in Basel, Switzerland.  This international central banking consortium meets and agrees on what are currencies and how they are exchanged globally.  There isn't a higher authority, unfortunately.  They rank currency assets into Tiered classes.  Central banks exchange these and that forms the basis for relative currency valuations.
The Basel III agreement eliminated the Tier 3 (highest risk) Gold is treated as Tier 1.  Under Basel II "gold bullion held in own vaults or on an allocated basis to the extent backed by bullion liabilities can be treated as cash and therefore risk-weighted at 0%"
Basel III rated it at 50%
http://en.wikipedia.org/wiki/Basel_III

Legal Tender is a special class of "currency".  It has value based only on the force of law which requires that it be acceptable to settle a debt, and to pay tax.  It is the least valuable form of currency and is considered soft.
So a debt is incurred for eating a meal at a restaurant.  The restaurateur may not refuse the local legal tender for settling that debt, they may however accept anything else that they like instead to settle that debt.

[NewLiberty]

Incidentally, since the charter of the Federal Reserve has as its mechanism the manipulation of the value of the dollar vis-a-vis other currency, now that Bitcoin is in that category, they could decide on any given day to blow over the market in any direction that suits them.
They could short it to nothing and wait for weak hands to sell and then grab it all back.  They can print as much dollars as they like so you can't fight and win, all you can do is weather the storm.
There are whales, and there are leviathan.

[bernard75]

In Germany its official:
After holding BTC for over 1 year makes them tax free. \o/

[freedomno1]

In Germany its official:
After holding BTC for over 1 year makes them tax free. \o/

Nice find goes to add to legal

[bassjoe]

Isn't that a part of the attraction of bitcoin? You can AVOID tax?

That also happens to be against the law... let me check my worldwide statute book... everywhere. Anybody that helps you avoid tax liabilities will also be acting illegally.

So you'll need a group of users -- merchants and customers -- willing to flout the law (and possible jail time for conspiracy) in every single country in order to avoid taxes. Good luck with that. Those of us who live in the real world will report taxable income when legally required to do so.

[nobbynobbynoob]

Isn't that a part of the attraction of bitcoin? You can AVOID tax?

That also happens to be against the law... let me check my worldwide statute book... everywhere. Anybody that helps you avoid tax liabilities will also be acting illegally.

So you'll need a group of users -- merchants and customers -- willing to flout the law (and possible jail time for conspiracy) in every single country in order to avoid taxes. Good luck with that. Those of us who live in the real world will report taxable income when legally required to do so.

Tax avoidance is wholly legal. It merely means doing whatever legally possible to minimize one's tax liabilities. Who on earth, no matter their political opinions, wants to pay more tax than they have to?

Tax evasion is definitely a crime, but IMO not morally wrong. It's kind of driving-at-90mph-on-an-empty-road-in-Virginia-or-Norway "wrong".

[NewLiberty]

Isn't that a part of the attraction of bitcoin? You can AVOID tax?

That also happens to be against the law... let me check my worldwide statute book... everywhere. Anybody that helps you avoid tax liabilities will also be acting illegally.

So you'll need a group of users -- merchants and customers -- willing to flout the law (and possible jail time for conspiracy) in every single country in order to avoid taxes. Good luck with that. Those of us who live in the real world will report taxable income when legally required to do so.

I avoid taxes every time I decide not to buy cigarettes.