Filing taxes and bitcoin?

[ge96]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

[Xester]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

It all depends on what country you are in. In our case the government is not placing a tax on the use of bitcoin or holding it. The only way the government collect taxes is through income tax and business tax of the exchangers that are also charged from the service fee when we do some transactions. So if your country is placing tax on bitcoin then just pay them so that you can continue enjoy bitcoin.

[chaser15]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

Don't mind dealing with the taxes but mind dealing with the Coinbase fees.

Bitcoin exchanges like Coinbase deals with their taxes by themselves and you as their client are facing their fees. So in other words, the fees they are collecting are part of those amount that will turned as a tax. Just use your bitcoin freely without any worries as long as you are dealing in a good services and not a shit one.

[ge96]

I should have mentioned I'm in the US. I was reading a wikipedia page on Bitcoin Taxes and it mentioned "currency-holdings" or something. Also mentioned depends what state you're in. Yeah I'm just buying/reselling.

I was curious about those fees. I saw for example in the Copay Android app you can choose what processing fee, looks like a rate thing but it's tied to the fee. I wonder if that is part of what Coinbase deals with when you are charged for buying, I think for sending as well (to wallet).

Interesting stuff though. Thanks

edit: It's kind of confusing like I don't even understand what I'm doing it seems to make sense.

So say I bought 90 "units" and I gained 10 units, I transfer those 10 units to a wallet, I still have the original 90 units in my Coinbase. But if prices go down and say between the two I now have 80 units, say 72 in Coinbase and 8 in wallet... it's like did I actually gain something? I'm just portioning part of what I own? It's weird, I guess the only way to get a "tangible return" is to buy some physical good when the price is up, at least when the price goes down, you don't lose that physical good or possibly other currency like the more stable FDIC-backed Fiat. Yeah gotta read more.

[DoublerHunter]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

Bitcoin is not controlled by anyone and also the government didn't controlled bitcoin, So why are you keep worrying about the taxes? Bitcoin does not have taxes because it is decentralize. I think you just need to worry about the fees of doing transactions and not the taxes.

[ge96]

It's the income generating part.

I don't want to get into the possibly of laundering through bitcoin if that is a thing, but it's explaining how you suddenly have a lot of money.

But alright, so I'm good on the taxes I guess.

Like I said my "gains" are a pittance but it's cool to be gaining some for now, hopefully I can get to the point of having tangible returns. It was cool that the Copay app has a link to buy an Amazon giftcard. Interesting idea.

edit: Actually I'm not sure that I made money, I mean while the value is currently up $12+ ~1,190.00 I currently own less than $90.00... no maybe I did like $5.00

Anyway pretty cool I guess, it's like some kind of investing, now to gather data and see if that helps at all

[Mometaskers]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

It all depends on what country you are in. In our case the government is not placing a tax on the use of bitcoin or holding it. The only way the government collect taxes is through income tax and business tax of the exchangers that are also charged from the service fee when we do some transactions. So if your country is placing tax on bitcoin then just pay them so that you can continue enjoy bitcoin.

Lucky you sir. I'm also not familiar with my own country's tax law (been living in the informal economy all my life) but I think earnings from holding bitcoin (and any currency for that matter) and trading shouldn't count as income considering there is no fixed salary. Not only is the earnings unpredictable, you can also lose money, which you probably wouldn't have to worry about on a job.

Hopefully the government would be content on the money they're making from the exchanges. Exchanges do pay taxes and it's not hard to imagine they're paying a lot considering how huge the difference between the buy and sell prices usually are.

[BingoDog]

It's the best thing that you make some inquieries with your local authorities if you want to be sure that you obey the law and all regulations. This is hard to answer because every country has its own rules and regulations. In my country you don't have to pay taxes on bitcoin itself but you do have to pay if you exchange and trade them.

[jaysabi]

I should have mentioned I'm in the US. I was reading a wikipedia page on Bitcoin Taxes and it mentioned "currency-holdings" or something. Also mentioned depends what state you're in. Yeah I'm just buying/reselling.

I was curious about those fees. I saw for example in the Copay Android app you can choose what processing fee, looks like a rate thing but it's tied to the fee. I wonder if that is part of what Coinbase deals with when you are charged for buying, I think for sending as well (to wallet).

Interesting stuff though. Thanks

edit: It's kind of confusing like I don't even understand what I'm doing it seems to make sense.

So say I bought 90 "units" and I gained 10 units, I transfer those 10 units to a wallet, I still have the original 90 units in my Coinbase. But if prices go down and say between the two I now have 80 units, say 72 in Coinbase and 8 in wallet... it's like did I actually gain something? I'm just portioning part of what I own? It's weird, I guess the only way to get a "tangible return" is to buy some physical good when the price is up, at least when the price goes down, you don't lose that physical good or possibly other currency like the more stable FDIC-backed Fiat. Yeah gotta read more.

The IRS has classified Bitcoin as property and thus you are subject to taxes under that classification. They have said this is subject to every transaction you make, which in my opinion is unwieldy and unreasonable. It would be far more natural to treat Bitcoin like a stock and pay capital gains as you realize gains or losses when you convert from fiat to Bitcoin. I think they are worried about the incentive that creates to deal only in Bitcoin as an attempted tax dodge. The ruling as currently decided is not friendly to anyone using or trading Bitcoin.

[bajing]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

It all depends on what country you are in. In our case the government is not placing a tax on the use of bitcoin or holding it. The only way the government collect taxes is through income tax and business tax of the exchangers that are also charged from the service fee when we do some transactions. So if your country is placing tax on bitcoin then just pay them so that you can continue enjoy bitcoin.

Lucky you sir. I'm also not familiar with my own country's tax law (been living in the informal economy all my life) but I think earnings from holding bitcoin (and any currency for that matter) and trading shouldn't count as income considering there is no fixed salary. Not only is the earnings unpredictable, you can also lose money, which you probably wouldn't have to worry about on a job.

Hopefully the government would be content on the money they're making from the exchanges. Exchanges do pay taxes and it's not hard to imagine they're paying a lot considering how huge the difference between the buy and sell prices usually are.

Yeah goverment only can collect tax from exchanges because only with that way goverment can know how many transaction made in a year. i guess goverment only need count how much total transaction has been made.

[jaysabi]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

To this point I've only bought through Coinbase, never sold. I would imagine if it was something you needed to worry about reporting, Coinbase would provide some kind of year end statement and also supply it to the IRS as a report if what "income" you've earned. This is how it works for most other financial services companies, like banks or brokers. At the end of the year, you get a statement disclosing what they provided to the IRS and what you have to report in your taxes. But because the IRS considers Bitcoin property, I'm not sure it will work the same way.

[Qartada]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

That money shouldn't be taxable because you're not paying for anything with it, just transferring it between two wallets of your own.  Say I was living in America and I took my piece of gold to a second house in Spain.  Does that mean I'll get taxed for it?  No, because I just moved it, I didn't spend it.  Whether the government has that logic I don't know, but despite Coinbase being pretty bad if you don't like taxes, I really don't think the government cares in this case.  You could always put your Bitcoin through a mixer to send to the new address and try to cover your tracks so that taxes won't be applicable in the future.

[madwica]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

Bitcoin is not yet taxable since this is digital/decentralized currency i think the bitcoin you lose is for the transaction fee and you do not notice that and you can trace your bitcoin transaction in blockchain you will see how much money will deduct on your previous bitcoin balance.

[pearlmen]

Like someone has rightly said it really depends on the country you are living. If it were to be my country even if I decide to be a patriotic citizen and disclose my income in other to remit my taxes th tax officials won't still understand the basis and where I earn my income which could be interpreted that I engage in illegal deals so the best is just to keep away from trouble and enjoy my tax free income which could also be applicable to your country of residence depending on how advance the country is.

[ge96]

That money shouldn't be taxable because you're not paying for anything with it, just transferring it between two wallets of your own. 

On this note of trasferring between your own, does "buying" an Amazon gift card count as taxable? I'm inclined to say no I mean if I buy a gift card at a store, although it's possible they charge tax right then and there and you're not aware of it.

Yeah so I worked out some math, confusing the fees/not matching values I didn't make $10.00 lol, maybe $3.00 or less/around here, so far until the price drops. I don't really understand what I'm doing and I'm poor so I probably should not be "gambling" with bitcoin. Though I only spend 5% of my income on it at this time.

This same amount I could invest into more servers and what not (for web dev) but I don't know.

Thanks

[dihari]

If you live in the US, you might be worry about bitcoin taxes. Because their government offically release laws about taxes of bitcoin where you have to report any activities and income you earn from bitcoin investment. And if you live in the country like third world country, do not ever think about bitcoin taxes, because taxation employee will confuse to find what kind of investment they gonna choose to collect your taxes(no offense).

By the way, I've made a thread about this in this forum based on New York Post news
https://bitcointalk.org/index.php?topic=1864560.msg18540238#msg18540238

[darthmaul]

In my country taxes are not applicable on bitcoins. But I'm wondering why anyone would take tax on bitcoins. Trading in many countries is tax free and it is money made from money. The profits are pure and are earned from assets which are already had paid taxes in real market.

Anyway I'm not sure of your country but bitcoin seems to be virtual currency and it may not have taxes on it. If anyone is having taxes please share it here I would like to know. Excited. 

[deisik]

I'm not sure if what I'm doing is trading?

I've started buying small amounts of bitcoin through Coinbase and I"m just doing something simple like when my balance is more than what I purchased (bitcoin has gone up) I subtract what I'm over and send it over to a wallet.

I don't know if that makes sense regarding depreciation/value...

But that money I Just "made" what is that considered as for taxes? I don't know part of it too it's like "bitcoin can be not traceable" haha but I'm buying bitcoin through coinbase I have a trail and have no reason to use it anonymously so, I'm wondering how to deal with taxes. I doubt I'll make much either but I'm going to put some time in on writing scripts to grab data from random sites and maybe that will help me with figuring out when to pull out money/buy more.

So... what about taxes?

Thanks for any help.

That money shouldn't be taxable because you're not paying for anything with it, just transferring it between two wallets of your own.  Say I was living in America and I took my piece of gold to a second house in Spain.  Does that mean I'll get taxed for it?  No, because I just moved it, I didn't spend it.  Whether the government has that logic I don't know, but despite Coinbase being pretty bad if you don't like taxes, I really don't think the government cares in this case.  You could always put your Bitcoin through a mixer to send to the new address and try to cover your tracks so that taxes won't be applicable in the future

It would all depend on specific jurisdiction

You may not have to pay taxes as such, but you may still have to pay export duties or something to that tune since some goods and assets are considered of special significance (like works of art) or value (and gold may well belong to the latter group of things). Obviously, to you, it will be all six of one and half a dozen of the other. Regarding the OP's question, you can either forget about taxes (as if there were no IRS or what your local tax agency is called) or, if you want to play safe, ask a tax authority representative directly whether you should pay any taxes and for what Bitcoin operations specifically

[youdamushi]

In 90% of the case it's more or less the same.
You buy bitcoin, ok.
Your btc value rises, cool for you.
You sell your btc at a higher value? HERE you have to pay taxes on what you won.

There are specific rules on your country after that but in msot cases you'll pay only on what you earned.

[webtricks]

There will be no special treatment given to Bitcoin trades if it is not recognized in your country. Therefore, it will be considered equivalent to stock investment and your profits will be considered as capital gains. These gains will be added to your net worth in the year end and if your income will be in tax slab, you have to pay taxes, no excuses. 
Other than above direct tax, you may need to pay additional indirect taxes as on the time of sale/purchase, no matter whether you made profit or loss.