Trace Mayers - No Taxes/No Reporting????

[Severian]

Tirades about how forcing people to do things against their will is good for society in 5...4...3...2...

COMPULSION, n. The eloquence of power.

-Ambrose Bierce

[cryptoanarchist]

Really, and what exactly does that mean?  The people who bring this up and say you can't use Bitcoin for some purposes because some anonymous person wrote something in a posting or put some cryptic message in the genesis block follow some religious belief.  Try using common sense instead of looking for some mystical message in the block chain and making up some kind of interpretation.

No one said "...you can't use Bitcoin for some purposes". I just stated that it was indeed created for the purpose of being outside government control.

what you just did is called a "strawman".

[Valle]

I think if bitcoins is not a fiat money, it worth legally nothing. That's why you can gift/transfer it without any tax liabilities. However, exchanging it to fiat is your income, so you must pay taxes for that.

[Severian]

If you work for chickens and you eat the chickens you still are supposed to pay income tax on the value of the chickens even though they were never converted to fiat. 

The point that is being missed is that only a fool tells the taxman what they won't find out unless you tell them in the first place.

[Malawi]

If you work for chickens and you eat the chickens you still are supposed to pay income tax on the value of the chickens even though they were never converted to fiat. 

The point that is being missed is that only a fool tells the taxman what they won't find out unless you tell them in the first place.

Unless you are actively hiding them, they can find it if they have a crackdown, and then there will be penalty taxes aswell.

If you only have a small amount, you probably don't have to bother, but if it's a more substantial sum, you should either tell them about your holdings or hide your tracks.

[Severian]

hide your tracks.

Bitcoin allows for this if one is careful, which is the reason that Bitcoin exists in the first place.

[virtualmaster]

Bitcoin income or gift can be taxed but not as easy as fiat.
They are some difficulties taxing it even if there are traces between the real person and the wallet:
- all taxing laws are made for fiat values
There is no law what you can break around bitcoin because it is nowhere a law about bitcoin.
- bitcoin is nowhere recognized officially as currency and their no rule how to correspond a bitcoin to a certain amount of dollar
Should be taken a 1 cent/bitcoin value as it was 3 years ago or 266$/bitcoin or something between ?
- Who is owning certain bitcoins ? Who has the private keys or who has the wallet or who has the wallet password or who has the passphrase ?
They are a lot of philosophical questions around which could be solved clearly sometimes but sometimes not.
- Even if the bitcoin transactions are recorded but who executed them ?
Let us say if you invite your neighbor and you ask him to make a certain bitcoin transaction and you give in just the wallet password have you executed the order or your neighbor ?
You may think that you in the fact.
But what about if your grandmother executes a bitcoin transaction but she cannot keep in mind the password so every time she transfers bitcoins she asks you to give in the password which you keep it for her.

What is if you make a gift to a friend of 10.000 BTC which is stored on an address which was created 3 years ago(when the bitcoin was 1cent) but you don't make any transfer but you give to him the private key then he transfers his bitcoins to another address. Gave you to him just a valueless hash or  a value ? If it was a value than 100$ or 2.5 million $ ?

Of course there can be more easy situations where they can say how much tax you should pay for ex. when you are a vendor and selling cars for bitcoin but bitcoins are immediately transformed to fiat.

[Malawi]

Bitcoin income or gift can be taxed but not as easy as fiat.
They are some difficulties taxing it even if there are traces between the real person and the wallet:
- all taxing laws are made for fiat values
There is no law what you can break around bitcoin because it is nowhere a law about bitcoin.
- bitcoin is nowhere recognized officially as currency and their no rule how to correspond a bitcoin to a certain amount of dollar
Should be taken a 1 cent/bitcoin value as it was 3 years ago or 266$/bitcoin or something between ?
- Who is owning certain bitcoins ? Who has the private keys or who has the wallet or who has the wallet password or who has the passphrase ?
They are a lot of philosophical questions around which could be solved clearly sometimes but sometimes not.
- Even if the bitcoin transactions are recorded but who executed them ?
Let us say I you invite your neighbor and you ask him to make a certain bitcoin transaction and you give in just the wallet password have you executed the order or your neighbor ?
You may think that you in the fact.
But what about if your grandmother executes a bitcoin transaction but she cannot keep in mind the password so every time she transfers bitcoins she asks you to give in the password which you keep it for her.

What is if you make a gift to a friend of 10.000 BTC which is stored on an address which was created 3 years ago(when the bitcoin was 1cent) but you don't make any transfer but you give to him the private key then he transfers his bitcoins to another address. Gave you to him just a valueless hash or  a value ? If it was a value than 100$ or 2.5 million $ ?

Of course there can be more easy situations where they can say how much tax you should pay for ex. when you are a vendor and selling cars for bitcoin but bitcoins are immediately transformed to fiat.

You can really just change BTC to some regular currency or stock. Biggest question is if BTC is considdered a currency or comodity by goverments around the world.

[marcus_of_augustus]

Biggest question is if BTC is considered a currency or commodity by goverments around the world.

Ummm, no. There are several bigger questions, not the least being the question of what precisely is a 'bitcoin'?

Is it the private key? Is it the number in the shared public ledger, the blockchain? At present, the asset you are referring to as a 'bitcoin' has no legal definition.

For all intents and purposes people are trading coded numbers amongst themselves that have exactly zero legal standing.

[Malawi]

Biggest question is if BTC is considered a currency or commodity by goverments around the world.

Ummm, no. There are several bigger questions, not the least being the question of what precisely is a 'bitcoin'?

Is it the private key? Is it the number in the shared public ledger, the blockchain? At present, the asset you are referring to as a 'bitcoin' has no legal definition.

For all intents and purposes people are trading coded numbers amongst themselves that have exactly zero legal standing.

Your bitcoin asset is whatever you control on your own behalf. Look in your wallet.
The private key is something you can share, like a PIN code. If your uncle gives your his PIN-code to a CC, it's still his CC and founds.

The blockchain is where the transactions are stored. The blockchain is Bitcoins central bank.

It's really not that complicated unless you want it to be complicated.

[marcus_of_augustus]

Biggest question is if BTC is considered a currency or commodity by goverments around the world.

Ummm, no. There are several bigger questions, not the least being the question of what precisely is a 'bitcoin'?

Is it the private key? Is it the number in the shared public ledger, the blockchain? At present, the asset you are referring to as a 'bitcoin' has no legal definition.

For all intents and purposes people are trading coded numbers amongst themselves that have exactly zero legal standing.

Your bitcoin asset is whatever you control on your own behalf. Look in your wallet.
The private key is something you can share, like a PIN code. If your uncle gives your his PIN-code to a CC, it's still his CC and founds.

The blockchain is where the transactions are stored. The blockchain is Bitcoins central bank.

It's really not that complicated unless you want it to be complicated.

It is complicated ... you have conveniently avoided defining what is a "bitcoin".

You say "look in my wallet" ... do you even know how to do this? In the wallet is the private keys (and some other stuff). I control the private keys, but you say they are not the asset. Then you say the ledger at the central bank is the bitcoin ... but I do not control that absolutely.

Can you define precisely what is this bitcoin that one owns (in the sense of property law)?

[Malawi]

Biggest question is if BTC is considered a currency or commodity by goverments around the world.

Ummm, no. There are several bigger questions, not the least being the question of what precisely is a 'bitcoin'?

Is it the private key? Is it the number in the shared public ledger, the blockchain? At present, the asset you are referring to as a 'bitcoin' has no legal definition.

For all intents and purposes people are trading coded numbers amongst themselves that have exactly zero legal standing.

Your bitcoin asset is whatever you control on your own behalf. Look in your wallet.
The private key is something you can share, like a PIN code. If your uncle gives your his PIN-code to a CC, it's still his CC and founds.

The blockchain is where the transactions are stored. The blockchain is Bitcoins central bank.

It's really not that complicated unless you want it to be complicated.

It is complicated ... you have conveniently avoided defining what is a "bitcoin".

You say "look in my wallet" ... do you even know how to do this? In the wallet is the private keys (and some other stuff). I control the private keys, but you say they are not the asset. Then you say the ledger at the central bank is the bitcoin ... but I do not control that absolutely.

Can you define precisely what is this bitcoin that one owns (in the sense of property law)?

You own some numbers in a file, just like in your bank.

[marcus_of_augustus]

The funny numbers in the banks fragile databases have legal standing.

edit: it's a chicken and an egg... and the State will never legally lay the "bitcoin is money" golden egg .... dyodd

[Malawi]

The question was not about whether you should or should not comply with any law, that is a completely different issue.  The issue is just whether reporting transactions is required.

As a thought experiment, what if Satoshi had said the purpose of Bitcoin was to make all transactions public and verify all taxes are paid?  He could have suggested that all users should publish their Bitcoin addresses and provide them to your tax collectors.  Would that change how you use Bitcoin?

I cannot see any reason not to report it. It is a value, just as if it had been a lump of gold, a car or paper with a random number issued by a national bank.

[marcus_of_augustus]

I cannot see any reason not to report it. It is a value, just as if it had been a lump of gold, a car or paper with a random number issued by a national bank.

... random numbers issued by national banks have legal standing ... see above.

[Malawi]

The funny numbers in the banks fragile databases have legal standing.

Sure. But the carrier of value is irrelevant. It's weather or not you control it on your own behalf(IOW-owns it) that matters.

[marcus_of_augustus]

The funny numbers in the banks fragile databases have legal standing.

Sure. But the carrier of value is irrelevant. It's weather or not you control it on your own behalf(IOW-owns it) that matters.

you are getting there .... one can control the private key, but not absolutely the blockchain ... so is there really any ownership? (unless the State decides to give the blockchain legal standing.)

[Malawi]

The funny numbers in the banks fragile databases have legal standing.

Sure. But the carrier of value is irrelevant. It's weather or not you control it on your own behalf(IOW-owns it) that matters.

you are getting there .... one can control the private key, but not absolutely the blockchain ... so is there really any ownership? (unless the State decides to give the blockchain legal standing.)

I cannot see why not. With the bank they control the files, with BTC the account-files are open. Only difference is that in the bank you show an ID or use your card, while in the blockchain they are protected by your passphrase and the native encryption.

That Bitcoin is not specifically described in the law, does not mean that it has no legal standing. It's still a valuable asset. It just means that it is yet to be clearly defined. This can happen in two ways - either it is defined up-front because it's become large/important enough, or it is defined in a court case (either initiated by the body that issues tax or by some taxpayer that want clarification).

This is being discussed in the EU atm, and probably other places aswell. Don't think it will bee too long before it has been cleared up what kind of asset the BTC is counted as. (Then that may be challenged in court offc.)