What are the do's and don'ts of exchanging Bitcoins, taxes, laws?

[steveerwinisdead]

I was thinking about using MtGox, and I want to know more of the legal things(do's and don'ts). I don't want to be in any trouble buying or selling these things as an investment. What things will get you flaged by a bank? And how are these reported when I do my taxes, will reporting them at all get someone in trouble??? so many questions.

[jcw]

It's probably best to talk to an accountant about the tax part, as they'll be familiar with the tax laws in your country, but in general, anything that has value is probably eligible for being taxed.

[UltimateReaper]

Coming from a noob who earned 44.77 USD in a whopping 22 days. (About a 15ish% return on investment) first I'd like to say this, like anything else worth doing, isn't easy. I've made a lot of mistakes but have learned a lot. I'm expected my next 22 days to be far more profitable. Hopefully.

Here is what I do know:

Depending on your country tax laws differ. For the U.S. once you hit gains of... well, something like 250-500 you have to report them.

Now, now, the law is very... well, basically, bitcoin is kinda vauge, however for simplicities sake you can report your gains as income or capital gains on your tax returns (assuming you actually make gains)

Some people advocate not reporting at all, while others report it as something other than income or capital gains for the lower tax.

Personally, I'd recommend this: Record your gains (if you can't figure out how to mathematically record your losses and gains and keep track of all that you probably shouldn't attempt this in the first place)

Then at the end of the year, when tax time comes around, file your gains as income or capital gains, pick whatever suits you best.

I wouldn't recommend MtGox, but it's really up to you.

Again, assuming you actually succeed.

[biiiiigsexy]

I was wondering about this myself. Totally new to this Bitcoin thing and want to be cautious...

[UltimateReaper]

I was wondering about this myself. Totally new to this Bitcoin thing and want to be cautious...

You can't get in trouble for buying or selling them. You can get in trouble for not reporting your gains for your taxes. That being said the average trader probably won't make enough to even report taxes, or rather I assume most people will get burned and give up.

Honestly, I get the feeling a lot of childish retards are attempting to get into this thing. Oh well, but this is what I do know.

[nebulus]

Safest thing is probably never go to fiat...