Paying TAX

[Amph]

Of course you can always lie to the IRS and pay less in taxes than you should according to their regulations.

If you do not get caught then all is well - you are a winner!

If you get caught then you lose and you face:

  Paying the taxes anyway
  Paying interest on all the taxes you did not pay
  Paying huge fines
  Going to jail for tax evasion

This is true whether you hide income and capital gains using gold, Bitcoin, good old fashioned US dollars or any other means.

the point is that they will never know, it's more easy to hide with bitcoin, especially if you hide your coins in other altcoin, simply impossible for them to trace all that shit

with gold it's far more easy to get caught, everythign about gold or fiat is traceable, cash the same, people think that cash are anonymous, but they are not, to get cash you need an ATM which is traced

everything that run on visa or mastercard is traced

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[NUFCrichard]

Of course you can always lie to the IRS and pay less in taxes than you should according to their regulations.

If you do not get caught then all is well - you are a winner!

If you get caught then you lose and you face:

  Paying the taxes anyway
  Paying interest on all the taxes you did not pay
  Paying huge fines
  Going to jail for tax evasion

This is true whether you hide income and capital gains using gold, Bitcoin, good old fashioned US dollars or any other means.

the point is that they will never know, it's more easy to hide with bitcoin, especially if you hide your coins in other altcoin, simply impossible for them to trace all that shit

with gold it's far more easy to get caught, everythign about gold or fiat is traceable, cash the same, people think that cash are anonymous, but they are not, to get cash you need an ATM which is traced

everything that run on visa or mastercard is traced

I wouldn't bet that your Bitcoin transactions are quite as hard to trace as you think. As soon as you have done a KYC verification somewhere, your info is in the system.  They can track the coins, I mean that is the point of the blockchain!

Once you get into alts they will get you by auditing exchanges.

We are lucky in Germany that if you buy and hold for 1 year, tax isn't an issue. I think tax could be what destroys bitcoin in the future, it is so complicated for businesses.

[Amph]

Of course you can always lie to the IRS and pay less in taxes than you should according to their regulations.

If you do not get caught then all is well - you are a winner!

If you get caught then you lose and you face:

  Paying the taxes anyway
  Paying interest on all the taxes you did not pay
  Paying huge fines
  Going to jail for tax evasion

This is true whether you hide income and capital gains using gold, Bitcoin, good old fashioned US dollars or any other means.

the point is that they will never know, it's more easy to hide with bitcoin, especially if you hide your coins in other altcoin, simply impossible for them to trace all that shit

with gold it's far more easy to get caught, everythign about gold or fiat is traceable, cash the same, people think that cash are anonymous, but they are not, to get cash you need an ATM which is traced

everything that run on visa or mastercard is traced

I wouldn't bet that your Bitcoin transactions are quite as hard to trace as you think. As soon as you have done a KYC verification somewhere, your info is in the system.  They can track the coins, I mean that is the point of the blockchain!

Once you get into alts they will get you by auditing exchanges.

We are lucky in Germany that if you buy and hold for 1 year, tax isn't an issue. I think tax could be what destroys bitcoin in the future, it is so complicated for businesses.

i just never expose my address in the public if i was serious about hiding my identity, i'm not now, i don't care i was just giving an example

if for example i want to purchase something i would use every time a new wallet(not a new address) that hold only a tiny fraction of my total bitcoin, those coins would come from mining not purchase on exchange

and if you mine all your income is very anonymous, esspecially with altcoin and their anon features

[Qartersa]

Hey guys Tell me are there people here who declare regarding there mining profit?
I understand that you " need " to pay tax for the profit from mining
can anyone answer or someone who know something regarding this subject?

Thanks

Hello!

There are different laws in different parts of the world so we cannot really answer the question at hand. Nonetheless, it is best to check the tax laws and internal rules and regulations of your State or place of jurisdiction to verify your concern. As we all know, tax evasion is generally a crime.

And regarding your statement that there is a 'need' to pay tax for the profit from mining, it is on a case-to-case basis. We cannot apply one rule for everybody.

I hope it helps! 

[Proton2233]

In order for the state to levy a tax on bitcoin for a start it is necessary to recognize as currency. This is no. But no currency, no tax. Regarded as your income can only inflow of foreign currency from the exchange of bitcoin to your account.

[Penjada]

No taxes are imposed from mining in third world countries, all profits need not be reported to the government because there is no law governing them. But personally I do not mind the income tax from this because the profits are more than enough.

Can the government get any evidence of bitcoin minig profits?

[frowsiter]

In the US:

Mining income is taxed as ordinary income at the price on the day and at the time you mine the coins.

Profit/Loss while trading is taxed as a capital gain or loss.

I have paid the income tax on all the coins I have mined and the capital gains tax on all of my trading.

It is good to know that we have to pay taxes in US. In some part of the world of countries where bitcoin concept is not that popular are still tax free. I hope it gets equal everywhere one day so that transferring of bitcoins will be easy from one country to another.

[darkangel11]

In order for the state to levy a tax on bitcoin for a start it is necessary to recognize as currency. This is no. But no currency, no tax. Regarded as your income can only inflow of foreign currency from the exchange of bitcoin to your account.

You're wrong. You have to pay tax from trading stocks, and these are not a currency. This is just an example, but most countries require you to pay income taxes and trading brings you income. The profits can be hidden as long as you hold your coins, but someday you'll want to buy a car or a house and then it will all be revealed.

Can the government get any evidence of bitcoin minig profits?

They can if they want. At the moment I haven't heard of such cases, because connecting the mined coins with taxpayers is almost impossible, as long as they don't convert to fiat. They'd have to check each miner in a pool to see which of them send money to exchanges, then pick those who used local exchanges, the ones that can be easily forced to disclose information, and then send them subpoenas. Then they'd have to go through the history of each of these accounts to see how much money they wired and compare with their tax reports.

[Dopert]

In my vision cryptocurrency is a uniek piec of freeware open source software. If you hold cryptocurrency then its like holding software. We do not pay for opensource freeware software. If you mine cryptocurrency in the decentralized community with your hardware then it is still your software. Not taxable in any kind if so then sue me if i make a wooden chair of my own wood and holding that chair.

If i sell that chair then its income and can undedstand taxation. Then taxes should be executed by the country where the individual lives. Al other approches i do not understand and are based on misinterpertation in my vision.

[Haiduongbg]

Of course you can always lie to the IRS and pay less in taxes than you should according to their regulations.

If you do not get caught then all is well - you are a winner!

If you get caught then you lose and you face:

  Paying the taxes anyway
  Paying interest on all the taxes you did not pay
  Paying huge fines
  Going to jail for tax evasion

This is true whether you hide income and capital gains using gold, Bit[Suspicious link removed]d old fashioned US dollars or any other means.

the point is that they will never know, it's more easy to hide with bitcoin, especially if you hide your coins in other altcoin, simply impossible for them to trace all that shit

with gold it's far more easy to get caught, everythign about gold or fiat is traceable, cash the same, people think that cash are anonymous, but they are not, to get cash you need an ATM which is traced

everything that run on visa or mastercard is traced

If tax authority targets you, it's a high chance that you can get caught. It's not too difficult to trace bitcoins if you have any transactions related to third parties that require you to provide any personal info (Delivery address, bank account or ID...)

[monocolor]

If I bought some BTCs many years ago, I will need to report only at the time when I sell, right? I am in US.

[Dopert]

If I bought some BTCs many years ago, I will need to report only at the time when I sell, right? I am in US.

If you are being taxed then pay that taxes with your rabbitcoins 

[iamTom123]

In the US:

Mining income is taxed as ordinary income at the price on the day and at the time you mine the coins. Profit/Loss while trading is taxed as a capital gain or loss. I have paid the income tax on all the coins I have mined and the capital gains tax on all of my trading.

I believe that you are a good citizen of the land then. Maybe your country is really strict in the implementation of its tax laws and for people to avoid the inconvenience of being tag as tax evader then they just follow the law so there would be less headaches.

Here in my country, we can still get away from being taxed on our Bitcoin income and transactions. Most of the people involved in freelancing projects online are not paying the government any tax. Maybe because the government is not really serious in running after tax evaders and they just wait for anybody to declare his/her income.

[BobbyJo]

It is pretty easy to avoid tax on income mining and trading etc) if you really wanted to. Its far harder to avoid coming to the tax authorities notice when you want to cash out into Fiat. Difficult to explain where all that extra money came from.  Especially as the tax authorities have the perfect record of transactions (the block chain).  I don't think tax authorities are there yet but as crypto increases in value, they will take more and more notice.

[Nameless27]

Paying taxes is not that bad at all, if that country has good government and no corrupt officials.
When our government implement taxes on my earned bitcoin I will warmly abide by it.
For we do have great leader at this moment. If the taxes will help your country to improved why not.

[Blocken]

Conceptually you "gained property" as far as the USA is concerned. You pay tax when your property gains value. They're asking you to pay value on nothing becoming something. 

IMO I think it's entirely wrong to pay taxes on that. I wouldn't. Bitcoins are out of the purview of the state no matter what they like to claim. Fact is you paid tax on everything that allowed you to mine that Bitcoin.

If a furniture maker pays taxes on his woodshop, wood, brushes, oils, etc... and makes a chair, does he pay taxes on the value of that chair coming into existence? No. Lawfully he "would pay tax" but he doesn't. No one does that. They pay sales tax when they sell it, or pay higher property taxes to compensate. If they are listed as a commercial entity they pay extra taxes like for electricity etc.

Think of it like this, they're acting as if Bitcoins fell into your lap like your pop passed away and left them to you. They want to tax on that. What they're ignoring is POW (proof of work) in which you paid plenty of tax already and have "labored" it into existence. So their argument is really faulty.

How and why are they able to say this crap? Because no one has challenged them yet. Why haven't they enforced it? Because then they wouldn't have any volunteers since it has some shit chances of holding up in court.

[Mack007]

To clear this discussion up, we need someone to chime in who has gone through the rigamarole of doing taxes on  Cryptomining.
Paying the taxes on bitcoin you mined on XYZ date makes no sense whatsoever.

Say for instance, you mined a 1 Altcoin on 7/11/16  at a price of $500 .  A month later the price of the altcoin crashes to   $15 dollars amd doesnt recover for the  foreseeable future. The value of the alt-coin is only realized once the altcoin is converted to  Fiat or used to purchase a good. Technically the Alt-coin is a useless abstract currency until this occurs.

So the IRS expects us to pay the taxes on a mined alt-coin, before we ever realize its true worth?  This makes no sense, but, if that is the case, then miners should immediately cash  out whatever they earned, then re-convert whatever fiat  they want to re-invest in the particular coin. This would make it much easier for the miner to organize their particular taxes.

A friend of a friend recently purchased multiple  Asic miners and   he told me hes going to mine, hold, and whenever he cashes out present the earnings as capital gains. He will  put down the value of the equipment used in column E on his  Schedule D 1040 form.  I view this all as straight capital gains.  I feel thats the best thing for us miners to do, even if the  IRS balks, your not going to  jail and maybe have to pay a small fine due to the fact that this is a new field, for us and for the IRS.

Another thing that may work is, mine, hold, and hope that  your countries economy becomes like Japans, in Japan you can use Bitcoin  as a taxless currency  for goods, rent, property, cars and food.   I foresee this happening after the price  of a bitcoin starts to stabilize around 100K, which should occur toward the middle of the 2020's

     Using Bitcoin in Japan: https://youtu.be/xrauYRGDCjY

[moorleiche]

Didnt the government not recognice bitcoin as currency? Wouldnt paying taxes for bitcoin be the same as paying taxes for monopoly money?

[inanilujimi]

Didnt the government not recognice bitcoin as currency? Wouldnt paying taxes for bitcoin be the same as paying taxes for monopoly money?

It's probably in the country you live bitcoin not in legal.
In some countries bitcoin has been legal
And I think there is no harm in paying taxes for the welfare of the country itself.

[Blocken]

A friend of a friend recently purchased multiple  Asic miners and   he told me hes going to mine, hold, and whenever he cashes out present the earnings as capital gains. He will  put down the value of the equipment used in column E on his  Schedule D 1040 form.  I view this all as straight capital gains.  I feel thats the best thing for us miners to do, even if the  IRS balks, your not going to  jail and maybe have to pay a small fine due to the fact that this is a new field, for us and for the IRS.

Another thing that may work is, mine, hold, and hope that  your countries economy becomes like Japans, in Japan you can use Bitcoin  as a taxless currency  for goods, rent, property, cars and food.   I foresee this happening after the price  of a bitcoin starts to stabilize around 100K, which should occur toward the middle of the 2020's

     Using Bitcoin in Japan: https://youtu.be/xrauYRGDCjY

During a discussion about trying to have favorable tax situations with cryptos a friend once said, "Don't do it, that's like inviting the Devil into your home, there's no good reason to do it if it's not already happening"

I highly recommend against filing capitol gains tax. For what reason is it wise to inject crypto mining with the state? They shouldn't be allowed in it, but if everyone lets them in then they'll think it's all ok until a Supreme Court case goes to show they have no right (it's only a matter of time).