Bitcoin vs Taxes

[deisik]

Bitcoin was created as an anonymous uncontrolled currency, and taxes would deprive it of such an opportunity. I think that you do not need to pay taxes for using crypto-currencies.

That will make a poor legal defense at your trial. In the USA it is this simple:
Did you make money? YES
Then you owe tax on it. No exceptions.

Sad but true

On the other hand, you could pretend that you didn't make any money. Yes, you cashed out some coins but you can claim that you had to cash out at a loss (due to emergency or something to that tune). I guess with Bitcoin it is a lot easier to get away with that than if you bought, say, stocks or bonds, and where all your transactions can be easily traced and verified. This is not the case with crypto

[Collinslevi]

If one could declare it as normal income that would be great, tax rate is low, but bitcoin gains most likely qualify as capital gains, same as forex trading or stocks trading and tax rate is much higher.

Don't really know how someone would declare Bitcoin Cash, it can be qualified as dividends from bitcoin or even as a donation or gift.

Luckily my goverment still forbid bitcoin usage so I can use bitcoin without pay any tax
IMO, even if my goverment one day legalize bitcoin usage, they must not applied tax on bitcoin since bitcoin basically is not a currency but it's a virtual currency

Government cant tax bitcoin directly but they can able to impose taxes on the service which do accepts bitcoin in short even if they would accept or adopt bitcoin they cant directly impose taxes to its users thats why other government do really have this kind of restriction when it comes on bitcoins adoption to their place. Its a decentralized thing and no one can able to control it.

Let's think for a moment about what this means. Bitcoin and similar convertible virtual currencies are property for tax purposes. As with other types of property, first one acquires property, often by exchanging cash for the property. Then one owns the property for a period of time. And then eventually one might sell or give away or trade or otherwise dispose of the property. So with any type of property we have three moments in time: acquiring the property, holding the property, and disposing of the property.

[Harlot]

If one could declare it as normal income that would be great, tax rate is low, but bitcoin gains most likely qualify as capital gains, same as forex trading or stocks trading and tax rate is much higher.

Don't really know how someone would declare Bitcoin Cash, it can be qualified as dividends from bitcoin or even as a donation or gift.

Luckily my goverment still forbid bitcoin usage so I can use bitcoin without pay any tax
IMO, even if my goverment one day legalize bitcoin usage, they must not applied tax on bitcoin since bitcoin basically is not a currency but it's a virtual currency

Government cant tax bitcoin directly but they can able to impose taxes on the service which do accepts bitcoin in short even if they would accept or adopt bitcoin they cant directly impose taxes to its users thats why other government do really have this kind of restriction when it comes on bitcoins adoption to their place. Its a decentralized thing and no one can able to control it.

Let's think for a moment about what this means. Bitcoin and similar convertible virtual currencies are property for tax purposes. As with other types of property, first one acquires property, often by exchanging cash for the property. Then one owns the property for a period of time. And then eventually one might sell or give away or trade or otherwise dispose of the property. So with any type of property we have three moments in time: acquiring the property, holding the property, and disposing of the property.

What are you talking about the tax rate being lower if you declare Bitcoin as your normal income? As far as I know tax income rates vary from how much your earnings are (on most countries), not depending on what kind you earn. And yes Bitcoin cannot be tax by the government directly but it is still the obligation of the tax payer to reflect it into their annual tax report in its current Fiat equivalent to avoid being audited by the government, remember it is how much your earn not what kind of money you gain it from.

[edward9953100]

bitcoin is so better on without texes

[Harriti]

If one could declare it as normal income that would be great, tax rate is low, but bitcoin gains most likely qualify as capital gains, same as forex trading or stocks trading and tax rate is much higher.

Don't really know how someone would declare Bitcoin Cash, it can be qualified as dividends from bitcoin or even as a donation or gift.

Luckily my goverment still forbid bitcoin usage so I can use bitcoin without pay any tax
IMO, even if my goverment one day legalize bitcoin usage, they must not applied tax on bitcoin since bitcoin basically is not a currency but it's a virtual currency

Government cant tax bitcoin directly but they can able to impose taxes on the service which do accepts bitcoin in short even if they would accept or adopt bitcoin they cant directly impose taxes to its users thats why other government do really have this kind of restriction when it comes on bitcoins adoption to their place. Its a decentralized thing and no one can able to control it.

Let's think for a moment about what this means. Bitcoin and similar convertible virtual currencies are property for tax purposes. As with other types of property, first one acquires property, often by exchanging cash for the property. Then one owns the property for a period of time. And then eventually one might sell or give away or trade or otherwise dispose of the property. So with any type of property we have three moments in time: acquiring the property, holding the property, and disposing of the property.

What are you talking about the tax rate being lower if you declare Bitcoin as your normal income? As far as I know tax income rates vary from how much your earnings are (on most countries), not depending on what kind you earn. And yes Bitcoin cannot be tax by the government directly but it is still the obligation of the tax payer to reflect it into their annual tax report in its current Fiat equivalent to avoid being audited by the government, remember it is how much your earn not what kind of money you gain it from.

Haha, please do not think Bitcoin cannot taxes fees by government. Example my country, today they have new rules about create farm for mining cryptocurrency, with them cryptocurrency look like a digital cash but is illegal, therefore if you want to continue mining, you need spend a huge of money for pay taxes fees or stop your farm

[prtty2gal2]

If one could declare it as normal income that would be great, tax rate is low, but bitcoin gains most likely qualify as capital gains, same as forex trading or stocks trading and tax rate is much higher.

Don't really know how someone would declare Bitcoin Cash, it can be qualified as dividends from bitcoin or even as a donation or gift.

Luckily my goverment still forbid bitcoin usage so I can use bitcoin without pay any tax
IMO, even if my goverment one day legalize bitcoin usage, they must not applied tax on bitcoin since bitcoin basically is not a currency but it's a virtual currency

Government cant tax bitcoin directly but they can able to impose taxes on the service which do accepts bitcoin in short even if they would accept or adopt bitcoin they cant directly impose taxes to its users thats why other government do really have this kind of restriction when it comes on bitcoins adoption to their place. Its a decentralized thing and no one can able to control it.

Let's think for a moment about what this means. Bitcoin and similar convertible virtual currencies are property for tax purposes. As with other types of property, first one acquires property, often by exchanging cash for the property. Then one owns the property for a period of time. And then eventually one might sell or give away or trade or otherwise dispose of the property. So with any type of property we have three moments in time: acquiring the property, holding the property, and disposing of the property.

What are you talking about the tax rate being lower if you declare Bitcoin as your normal income? As far as I know tax income rates vary from how much your earnings are (on most countries), not depending on what kind you earn. And yes Bitcoin cannot be tax by the government directly but it is still the obligation of the tax payer to reflect it into their annual tax report in its current Fiat equivalent to avoid being audited by the government, remember it is how much your earn not what kind of money you gain it from.

Haha, please do not think Bitcoin cannot taxes fees by government. Example my country, today they have new rules about create farm for mining cryptocurrency, with them cryptocurrency look like a digital cash but is illegal, therefore if you want to continue mining, you need spend a huge of money for pay taxes fees or stop your farm

Yes it is true that in the creating process the governments implemented taxes on bitcoin, although there is no tax directly on buying and selling in some countries. But I think that once it prevails in the world all the governments in the world would definitely impose taxes on bitcoin. And I think it is a good sign for the betterment of the nation and not for the investors all over the world.

[traccdev]

I think tax is one of the reasons governments hate bitcoins. Because to implement proper technology it will cost a lot. And they are not so certain of bitcoin's future.

[newlone]

In my country BTC is an uncontrollable code so the government does not approve it, all BTC deals are out of the law and there are no fees.
But when it is accepted in a certain country and taxation is a must do because you can use the BTC freely it is good.

[ALT67890]

In my country there is no such thing being implemented about income tax on bitcoin earnings because it is not yet legalized but we have freedom to don anything about bitcoin except criminal act in using it. But the bitcoin exchanges or local wallet provider here in our country is regulated maybe it is them who were in contract with government about taxation.

[adam1230]

If you don't want to pay taxes never turn to FIAT. If you keep spending with bitcoin they will never ask taxes.
And also why we need to cashout FIAT ? As we can still keep trading in bitcoin. We can sell and buy everything using bitcoin and this will never cause us to pay taxes

[BaraxLo]

If one could declare it as normal income that would be great, tax rate is low, but bitcoin gains most likely qualify as capital gains, same as forex trading or stocks trading and tax rate is much higher.

Don't really know how someone would declare Bitcoin Cash, it can be qualified as dividends from bitcoin or even as a donation or gift.

Luckily my goverment still forbid bitcoin usage so I can use bitcoin without pay any tax
IMO, even if my goverment one day legalize bitcoin usage, they must not applied tax on bitcoin since bitcoin basically is not a currency but it's a virtual currency

Government cant tax bitcoin directly but they can able to impose taxes on the service which do accepts bitcoin in short even if they would accept or adopt bitcoin they cant directly impose taxes to its users thats why other government do really have this kind of restriction when it comes on bitcoins adoption to their place. Its a decentralized thing and no one can able to control it.

Let's think for a moment about what this means. Bitcoin and similar convertible virtual currencies are property for tax purposes. As with other types of property, first one acquires property, often by exchanging cash for the property. Then one owns the property for a period of time. And then eventually one might sell or give away or trade or otherwise dispose of the property. So with any type of property we have three moments in time: acquiring the property, holding the property, and disposing of the property.

What are you talking about the tax rate being lower if you declare Bitcoin as your normal income? As far as I know tax income rates vary from how much your earnings are (on most countries), not depending on what kind you earn. And yes Bitcoin cannot be tax by the government directly but it is still the obligation of the tax payer to reflect it into their annual tax report in its current Fiat equivalent to avoid being audited by the government, remember it is how much your earn not what kind of money you gain it from.

Yes I agree with you, but it is not in all the countries of the world. some countries officials do not even think of bitcoin till date. In their eyes there is no digital currency in the world which would be the currency of the future and they have no laws for its business and investments.

While in some countries the situation is different. They treated biycoin as a legal and regular currency and has the rules as for paper currency.

[beerlover]

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

I believe bitcoin's legal status is not clear in majority of the countries and that creates a lot of confusion on taxing part. People are unsure about how to pay tax on bitcoin. My country is having the same status So I am disclosing my bitcoin incomes in my tax filing every year since last two years.

having said that, I only disclose what I have cashed out in fiat. So my actual bitcoin holding I am not disclosing as I am not getting any income from it. I am disclosing only the amount I have converted in to fiat. I hope I am doing the right thing.

Yes. There is so much confusing regarding payment of tax on bitcoin. However with what you are disclosing, which depends on your country's law and policy apparently on tax laws … I do not really see any issue with what you are doing. After all, since you are disclosing what you have cashed out in fiat and paying tax on that. I see no reason why I should disclose the bitcoin I have anyway but everyone have what works for them as what may be right in my own eyes may be wrong in someone else.

[stomachgrowls]

If one could declare it as normal income that would be great, tax rate is low, but bitcoin gains most likely qualify as capital gains, same as forex trading or stocks trading and tax rate is much higher.

Don't really know how someone would declare Bitcoin Cash, it can be qualified as dividends from bitcoin or even as a donation or gift.

Luckily my goverment still forbid bitcoin usage so I can use bitcoin without pay any tax
IMO, even if my goverment one day legalize bitcoin usage, they must not applied tax on bitcoin since bitcoin basically is not a currency but it's a virtual currency

Government cant tax bitcoin directly but they can able to impose taxes on the service which do accepts bitcoin in short even if they would accept or adopt bitcoin they cant directly impose taxes to its users thats why other government do really have this kind of restriction when it comes on bitcoins adoption to their place. Its a decentralized thing and no one can able to control it.

Let's think for a moment about what this means. Bitcoin and similar convertible virtual currencies are property for tax purposes. As with other types of property, first one acquires property, often by exchanging cash for the property. Then one owns the property for a period of time. And then eventually one might sell or give away or trade or otherwise dispose of the property. So with any type of property we have three moments in time: acquiring the property, holding the property, and disposing of the property.

What are you talking about the tax rate being lower if you declare Bitcoin as your normal income? As far as I know tax income rates vary from how much your earnings are (on most countries), not depending on what kind you earn. And yes Bitcoin cannot be tax by the government directly but it is still the obligation of the tax payer to reflect it into their annual tax report in its current Fiat equivalent to avoid being audited by the government, remember it is how much your earn not what kind of money you gain it from.

Government would always seek out on the money you do earn on your job which they would really base and this is how normally works on taxation but speaking already on bitcoin.It cant be taxed since even government wont really have any idea if that certain person is earning other sources of money knowing that we can able to hide our earnings on bitcoin form.

[KroFly]

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

I believe bitcoin's legal status is not clear in majority of the countries and that creates a lot of confusion on taxing part. People are unsure about how to pay tax on bitcoin. My country is having the same status So I am disclosing my bitcoin incomes in my tax filing every year since last two years.

having said that, I only disclose what I have cashed out in fiat. So my actual bitcoin holding I am not disclosing as I am not getting any income from it. I am disclosing only the amount I have converted in to fiat. I hope I am doing the right thing.

Yes. There is so much confusing regarding payment of tax on bitcoin. However with what you are disclosing, which depends on your country's law and policy apparently on tax laws … I do not really see any issue with what you are doing. After all, since you are disclosing what you have cashed out in fiat and paying tax on that. I see no reason why I should disclose the bitcoin I have anyway but everyone have what works for them as what may be right in my own eyes may be wrong in someone else.

I would also not disclose information about my coins to the government. It has nothing to do with this. I earned the coins honestly and I have the right to use them

[darkangel11]

Bitcoin was created as an anonymous uncontrolled currency, and taxes would deprive it of such an opportunity. I think that you do not need to pay taxes for using crypto-currencies.

That will make a poor legal defense at your trial. In the USA it is this simple:
Did you make money? YES
Then you owe tax on it. No exceptions.

Sad but true

On the other hand, you could pretend that you didn't make any money. Yes, you cashed out some coins but you can claim that you had to cash out at a loss (due to emergency or something to that tune). I guess with Bitcoin it is a lot easier to get away with that than if you bought, say, stocks or bonds, and where all your transactions can be easily traced and verified. This is not the case with crypto

Unfortunately, if they claim you've tried to avoid paying them you will have to provide proof of cashing out with a loss. With the government it's always a shitty situation. They claim something and you have to prove them wrong, otherwise they will assume they were right and fine you. It's their way of making money on people who can't afford good lawyers or are simply lost in the financial system.

[batang_bitcoin]

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

There's a need to pay income tax but I'm not aware that there is a taxation that's happening when you had sold your bitcoins. The thing here is when you have fiat, you'll are taxable for the goods that you are consuming and other stuffs. But to relate tax to bitcoin, that's not appropriate already as bitcoin is a decentralized cryptocurrency and that's why many starts to adopt it because it's not taxable.

[_Dawid_]

It depends on country and your exchange, in my when I send fiat due to change into BTC i must write that it is investment. So after "successful" investment I will must pay some taxes. So for example the first part of paying is when u exchange FIAT into BTC, and then propably if you get an income from your investment. But all depends on your counrty and law.

[arikassuja]

It depends on country and your exchange, in my when I send fiat due to change into BTC i must write that it is investment. So after "successful" investment I will must pay some taxes. So for example the first part of paying is when u exchange FIAT into BTC, and then propably if you get an income from your investment. But all depends on your counrty and law.

In my country there is no tax system in the profit of investing in bitcoin, I feel only pay taxes on exchange, because bitcoin is not recognized in my country, of course I will not want to pay taxes because of this

[Fireblade]

It depends on country and your exchange, in my when I send fiat due to change into BTC i must write that it is investment. So after "successful" investment I will must pay some taxes. So for example the first part of paying is when u exchange FIAT into BTC, and then propably if you get an income from your investment. But all depends on your counrty and law.

yes but i think that it also depend on the item where you want to put tax, in fact countries only put tax on legal item, so bitcoin is still not legal in most of the areas therefore to me i think there is no tax on bitcoin, but when countries will turn bitcoin as legal currency then they will also prepare a  policy to put tax on bitcoin but currently bitcoin is free of taxes in most area.

[Flor1982]

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

Government Tax is natural if we are earning in legal ways we should pay the income taxes in order for our government to survive of handling the nation. We need to show the bitcoin as gaining advantage for the government as it will counter the China and JP Morgan claim of critism that bitcoin must be proclaim illegal because bitcoin cannot help the nations.