Do we want to work with money regulators, or keep Bitcoin unregulated?

[aigeezer]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

[rovchris]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

Exactly that - they can pass as much legislation as they want but if they can not enforce it then it is irrelevant. This just sums up nicely how far out of touch State legislators are - they have no understanding of the real world.

[Schrankwand]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

Exactly that - they can pass as much legislation as they want but if they can not enforce it then it is irrelevant. This just sums up nicely how far out of touch State legislators are - they have no understanding of the real world.

hahahaa.

You see, they CAN. They just create a value, write off the tax and then send you a bill. You cannot pay, you are being taken to court. You cannot pay up then, you go to jail and create interest. It just ruins your life.

You can pay but don't want to? Ah, they will just take it. Pressuring your bank, getting any other enforcement division to get into your house, blacklist accounts... all this funny stuff.

[aigeezer]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

Exactly that - they can pass as much legislation as they want but if they can not enforce it then it is irrelevant. This just sums up nicely how far out of touch State legislators are - they have no understanding of the real world.

It's hard to know the extent to which most legislators are "out of touch" - their apparent stupidity always seems to work out in their favor (see link).

The irrelevant laws still give the State the ability to criminalize any target at will. I see the "seizure" of the Mt. Gox Dwolla accounts in this light. Others say that Gox should have known they were in violation of blah blah. Maybe so, but the US tax code, for example, is so opaque that not even the legislators know how big it is (and that's just one cluster of laws). How many laws did someone break today?... that's for the State to decide, whenever the mood strikes them.

Teaser: "So, depending on whom you ask, our elected representatives are of the opinion that this particular section of the United States Code is somewhere between 2,500 and 2,500,000 pages long."

http://www.trygve.com/taxcode.html

Put me down for "unregulated BTC".           

[rovchris]

You completely miss the point - only FIAT currencies can be taxed.

Both the US and Canadian governments have recently gone out of their way to "clarify" that they require taxes to be paid on all bartered goods. Presumably that is ridiculously unenforceable, but they have staked out the turf nonetheless.

Exactly that - they can pass as much legislation as they want but if they can not enforce it then it is irrelevant. This just sums up nicely how far out of touch State legislators are - they have no understanding of the real world.

hahahaa.

You see, they CAN. They just create a value, write off the tax and then send you a bill. You cannot pay, you are being taken to court. You cannot pay up then, you go to jail and create interest. It just ruins your life.

You can pay but don't want to? Ah, they will just take it. Pressuring your bank, getting any other enforcement division to get into your house, blacklist accounts... all this funny stuff.

No it does not work like that. The value is dictated when the commodity or investment is sold for FIAT and then you pay income tax on that.

If you have Gold you do not pay tax until you SELL do you understand this? They do not send you a yearly bill on the commodities you hold only when you SELL.

So what you are saying is this - they will go round to every business in the country assigning values to items that they have no knowledge of and then demand tax. I can really see that happening.

Look man if you don't like bitcoins and insist on giving the State money for them to waste and fight illegal wars - that is your prerogative so just use dollars. The idea behind bitcoins was to change all this.

[aigeezer]

No it does not work like that. The value is dictated when the commodity or investment is sold for FIAT and then you pay income tax on that.

From the (mind-numbing) government of Canada tax site:

"Deemed proceeds of disposition

    This is an expression used when a person is considered to have received an amount for the disposition of property, even though the person did not actually receive that amount."

... and ...

"Eligible amount of the gift

    Under proposed changes, this is generally the amount by which the fair market value of the gifted property exceeds the amount of the advantage, if any, received for the gift.

    Under proposed changes, the advantage is generally the total value of all property, services, compensation, or other benefits to which you are entitled as partial consideration for, or in gratitude for, the gift. The advantage may be contingent or receivable in the future, and given either to you or a person not dealing at arm's length with you.

    Under proposed changes, the advantage also includes any limited-recourse debt in respect of the gift at the time it was made. For example, there may be a limited-recourse debt if the property was acquired though a tax shelter that is a gifting arrangement. In this case, the eligible amount of the gift will be reported in box 13 of Form T5003, Statement of Tax Shelter Information. For more information on gifting arrangements and tax shelters, see Guide T4068, Guide for the Partnership Information Return (T5013 forms)"

Sorry for the emetic. My point was just to illustrate that the State is very aware of how to turn commodities into fiat equivalents whether or not the parties to the transaction actually used fiat, and indeed whether or not a transaction even took place!

http://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/glssry-eng.html#proceeds

Of course, rules vary from one jurisdiction to another, but when one State entity finds a way to make a tax grab then others tend to follow suit.

[rovchris]

No it does not work like that. The value is dictated when the commodity or investment is sold for FIAT and then you pay income tax on that.

From the (mind-numbing) government of Canada tax site:

"Deemed proceeds of disposition

    This is an expression used when a person is considered to have received an amount for the disposition of property, even though the person did not actually receive that amount."

... and ...

"Eligible amount of the gift

    Under proposed changes, this is generally the amount by which the fair market value of the gifted property exceeds the amount of the advantage, if any, received for the gift.

    Under proposed changes, the advantage is generally the total value of all property, services, compensation, or other benefits to which you are entitled as partial consideration for, or in gratitude for, the gift. The advantage may be contingent or receivable in the future, and given either to you or a person not dealing at arm's length with you.

    Under proposed changes, the advantage also includes any limited-recourse debt in respect of the gift at the time it was made. For example, there may be a limited-recourse debt if the property was acquired though a tax shelter that is a gifting arrangement. In this case, the eligible amount of the gift will be reported in box 13 of Form T5003, Statement of Tax Shelter Information. For more information on gifting arrangements and tax shelters, see Guide T4068, Guide for the Partnership Information Return (T5013 forms)"

Sorry for the emetic. My point was just to illustrate that the State is very aware of how to turn commodities into fiat equivalents whether or not the parties to the transaction actually used fiat, and indeed whether or not a transaction even took place!

http://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/glssry-eng.html#proceeds

Of course, rules vary from one jurisdiction to another, but when one State entity finds a way to make a tax grab then others tend to follow suit.

I hear you but the truth is this - if you exchange one item of stock in your inventory for another the net change is ZERO. You can not pay Income tax when there is no income.

[aigeezer]

I hear you but the truth is this - if you exchange one item of stock in your inventory for another the net change is ZERO. You can not pay Income tax when there is no income.

What does truth have to do with it? We are talking tax regulations.     

Amazingly, the tax authorities see barter transactions as being taxable.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Tax-Center#

Perhaps less amazingly, they see everything as being taxable.

[rovchris]

I hear you but the truth is this - if you exchange one item of stock in your inventory for another the net change is ZERO. You can not pay Income tax when there is no income.

What does truth have to do with it? We are talking tax regulations.      

Amazingly, the tax authorities see barter transactions as being taxable.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Tax-Center#

Perhaps less amazingly, they see everything as being taxable.

OK after having a quick scan the pertinent line of information is this.

" Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash. "

This implies you have to have earned money to be taxed if the net change is zero then nothing has been made. So the case still stands if you trade and the net gain is zero there is no tax to pay.

I believe that this is to stop someone swapping a pencil for a house - But in reality nobody would do this for a genuine trade.

I take it you live in Canada you lucky chappy I would love to live there.

[aigeezer]

I hear you but the truth is this - if you exchange one item of stock in your inventory for another the net change is ZERO. You can not pay Income tax when there is no income.

What does truth have to do with it? We are talking tax regulations.     

Amazingly, the tax authorities see barter transactions as being taxable.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Tax-Center#

Perhaps less amazingly, they see everything as being taxable.

OK after having a quick scan the pertinent line of information is this.

" Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash. "

This implies you have to have earned money to be taxed if the net change is zero then nothing has been made. So the case still stands if you trade and the net gain is zero there is no tax to pay.

Good digging - that seems reassuring. I've been digging also and I'm finding that the deeper I go the deeper it gets. Part of the problem is that I'm flitting back and forth between US and Canadian sites.

The Canadian tax agency says, in part:

"The Department takes the view that barter transactions are within the
purview of the Income Tax Act."

...

"Where the taxpayer is an employee, e.g.
a mechanic, occasional help given to a friend or neighbour in exchange for
something would not be taxable unless the taxpayer made a regular habit of
providing such services for cash or barter."

http://www.cra-arc.gc.ca/E/pub/tp/it490/it490-e.txt

... which I find completely unhelpful. The "regular habit" would have me looking over my shoulder for the tax man whenever I thought about helping a friend or neighbour (Canadian spelling), which is perhaps exactly their intention.

Is my habit irregular? Is it a habit at all? Only the taxman knows.

Anyway, there is evidence to support your position (equal trade means no tax implications) and there is evidence to support more sinister interpretations (there are no even trades, and everything is taxable unless the taxman decides not to bother).

The Canadian guideline is old, and was written long before crypto-currencies appeared - it was written to make a tax grab against "barter clubs" which were springing up at the time and have since gone out of fashion, perhaps because of the government response. The "barter exchange" referred to in the American guideline is perhaps the same phenomenon.

How this will all relate to BTC interactions is up to taxmen everywhere to decide. Run for the hills!       
 

[rovchris]

The hills - here I come LOL

too true.

It is poorly written legislation and impossible to interpret - what is regular for example, once a day, once a month. The problem for them is the public are not machines and can not be programmed and it is physically and legally impossible for them to stop humans exchanging goods.

They are trying to legislate a natural behaviour that is evident in all people.  It is the equivalent to saying you are only permitted 1000 heart beats a day! They can pass all the laws they want and it will not change the course of evolution in the slightest.

It is amusing watching them try though.

[worldinacoin]

I say dont do any deal with fiat currency, just keep trading with each other using bitcoins

[sinner]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

[rovchris]

I say dont do any deal with fiat currency, just keep trading with each other using bitcoins

You Sir are exactly what the community needs.

Good on you.

[BitcoinMoxy]

 

[rovchris]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

What they will want is every Wallet registered to a person / address - the ability to cease accounts, funds trace every transaction. Basically they want to copy the current banking system because that worked so well and foist it upon us.

[bitcoinanon]

The basis of bitcoin is already regulated by its coding. Right? I do not think much more regulation is needed. Though I think the discussion needs to continue amongst the community lest something happen without the approval of the community. If the community remains a P2P network how could anything happen to the bitcoin community with the approval of the community, like unwanted regulation for example?

[RodeoX]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

What they will want is every Wallet registered to a person / address - the ability to cease accounts, funds trace every transaction. Basically they want to copy the current banking system because that worked so well and foist it upon us.

Can you quote me a source? I have never seen any regulatory body mention that. What has been stated is regulation of exchanges. Which is regulation of fiat currency. Just as you are required to pay a tax on any profit made from selling anything. (U.S. citizens)

[rovchris]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

What they will want is every Wallet registered to a person / address - the ability to cease accounts, funds trace every transaction. Basically they want to copy the current banking system because that worked so well and foist it upon us.

Can you quote me a source? I have never seen any regulatory body mention that. What has been stated is regulation of exchanges. Which is regulation of fiat currency. Just as you are required to pay a tax on any profit made from selling anything. (U.S. citizens)

It was in one of the posts on this thread have a read through. No one was disputing that exchanges are fully under the control of the State if they are exchanging for FIAT. That is not what this thread was about. No regulatory body has mentioned it - it is a discussion we are having.

People were suggestion we should try and self regulate before its rammed down our throats.

[RodeoX]

how could bitcoin be regulated?  sounds as ridiculous as "regulate bittorrent".

when people say "regulate bitcoin" what they really mean is "regulate exchanges" right?

No - for some reason they are want to involve state regulation at the development level as Gavin was involved.

What they will want is every Wallet registered to a person / address - the ability to cease accounts, funds trace every transaction. Basically they want to copy the current banking system because that worked so well and foist it upon us.

Can you quote me a source? I have never seen any regulatory body mention that. What has been stated is regulation of exchanges. Which is regulation of fiat currency. Just as you are required to pay a tax on any profit made from selling anything. (U.S. citizens)

It was in one of the posts on this thread have a read through. No one was disputing that exchanges are fully under the control of the State if they are exchanging for FIAT. That is not what this thread was about. No regulatory body has mentioned it - it is a discussion we are having.

cool. I just no evidence of measures that invasive. Although, who knows what the future holds?