tax on the bitcoin in USD

[danielgold20]

Hello
Is there a tax on the bitcoin or any new law that entered  regarding tax on selling and buying bitcoin? ( if i have profit )
Or as a Miner is there a tax?


thank you for your help!

[talkbitcoin]

do some research:
https://en.bitcoin.it/wiki/Tax_compliance
http://www.investopedia.com/university/definitive-bitcoin-tax-guide-dont-let-irs-snow-you/
visit the legal board: https://bitcointalk.org/index.php?board=74.0

to get the idea and finally do the most important thing: consult a real professional in your country specially if you are handling large amounts of money. it is best to pay a little consulting fee now than paying a lot of lawyer fee later.

[samuraijin]

All countries have different policies depending on the country where you live?
I think even if profitable you can also give advantage to your country by paying tax fee it's not big deal

[Beerwizzard]

Hello
Is there a tax on the bitcoin or any new law that entered  regarding tax on selling and buying bitcoin? ( if i have profit )
Or as a Miner is there a tax?


thank you for your help!

Pretty sure that  if you are doing any speculation stuff then you would be charged (like if you were trading on forex). I'm still curious about the accounting details of such taxes but most countries will definetely find a way to charge you.
Would be nice to hear if someone wants to tell us how he is paying / avoiding taxes.

[Script]

It probably qualifies as capital gains, and you should declare it as so.

There are many people from USA in this forum, if you look around, this question as been discussed many times before, and you probably can find clarification from the proper authority in USA.

[TheGodson]

Bitcoin is considered an asset, which means you pay capital gains tax on the earnings. If you hold for more than a year it is considered a long term capital gain. If you trade it regularly it is considered a short term capital gain.

Long term capital gains tax are a much lower rate than short term capital gains tax. Short term capital gains tax is the same as your income tax. Long term capital gains tax is much better. If you make less than $37,950 ($50,800 if you are head of your household) like me then you are taxed at a rate of 0%. That's right 0%. Yeah! Go long term capital gains!

Also, don't forget. If you lose money you can claim it as a deductible for up to $3,500 as a capital loss.

[spadormie]

Well it depends on your country. Some countries have some policies regarding bitcoin and some doesn't have any. Here in my country, Philippines I never heard of taxing bitcoin. I don't know if that is it or I never heard of the law before. It is revolving behind that.

[Yuhee]

Well it depends on your country. Some countries have some policies regarding bitcoin and some doesn't have any. Here in my country, Philippines I never heard of taxing bitcoin. I don't know if that is it or I never heard of the law before. It is revolving behind that.

There are also some news that the government is trying to close some online bettings sites but i think it was just toppled by many issues regarding the welfare of the country from terrorists. But i dont think it is just easy to tax btc transactions unless countries will manipulate there own conertion sites from btc to there own currency.   The transaction fee of btc itself may be called tax and unless a country has its own blockchain then it is possible.

[TomUyamot]

All countries have different policies depending on the country where you live?
I think even if profitable you can also give advantage to your country by paying tax fee it's not big deal

Tax laws differ from one country to another. I don't know where your country is. In India I think Bitcoin income is taxable. Here in my country, the Philippines, it is also taxable since it is a legitimate income but the Bureau of Internal Revenue is not that high tech in monitoring all kinds of income. So many online jobs and other source of income online are not even monitored even if millions are involved.

[Beerwizzard]

Bitcoin is considered an asset, which means you pay capital gains tax on the earnings. If you hold for more than a year it is considered a long term capital gain. If you trade it regularly it is considered a short term capital gain.

Long term capital gains tax are a much lower rate than short term capital gains tax. Short term capital gains tax is the same as your income tax. Long term capital gains tax is much better. If you make less than $37,950 ($50,800 if you are head of your household) like me then you are taxed at a rate of 0%. That's right 0%. Yeah! Go long term capital gains!

Also, don't forget. If you lose money you can claim it as a deductible for up to $3,500 as a capital loss.

What if someone got payed in bitcoins and did not exchanged it for several years? So the income tax should be taken from the initial amount of btc in old btc rates or from the whole amount counting on actual rate?

[Ryan Dugan]

Well it depends on your country. Some countries have some policies regarding bitcoin and some doesn't have any. Here in my country, Philippines I never heard of taxing bitcoin. I don't know if that is it or I never heard of the law before. It is revolving behind that.

There are also some news that the government is trying to close some online bettings sites but i think it was just toppled by many issues regarding the welfare of the country from terrorists. But i dont think it is just easy to tax btc transactions unless countries will manipulate there own conertion sites from btc to there own currency.   The transaction fee of btc itself may be called tax and unless a country has its own blockchain then it is possible.

I highly doubtful any government will be shutting down and Bitcoin casinos anytime soon. Terrorists ? What you talking about ?
Bitcoin is only taxable after converting to us because it's capital gains like the users above were talking about.

[dothebeats]

Well it depends on your country. Some countries have some policies regarding bitcoin and some doesn't have any. Here in my country, Philippines I never heard of taxing bitcoin. I don't know if that is it or I never heard of the law before. It is revolving behind that.

There are also some news that the government is trying to close some online bettings sites but i think it was just toppled by many issues regarding the welfare of the country from terrorists. But i dont think it is just easy to tax btc transactions unless countries will manipulate there own conertion sites from btc to there own currency.   The transaction fee of btc itself may be called tax and unless a country has its own blockchain then it is possible.

I highly doubtful any government will be shutting down and Bitcoin casinos anytime soon. Terrorists ? What you talking about ?
Bitcoin is only taxable after converting to us because it's capital gains like the users above were talking about.

Most online gambling sites in the Philippines have already closed since the crackdown of the government. Bitcoin casinos, however, is another thing and because the government don't know what bitcoin is 'yet', it is safe to say that these type of casinos will continue to be used by its peers.

--

On the taxing part, it varies very differently by country. Like in the Philippines, it is fine even if you don't file any taxes in regards to your gains in cryptocurrencies since it is not specified by the law to be taxable.

[TheGodson]

Bitcoin is considered an asset, which means you pay capital gains tax on the earnings. If you hold for more than a year it is considered a long term capital gain. If you trade it regularly it is considered a short term capital gain.

Long term capital gains tax are a much lower rate than short term capital gains tax. Short term capital gains tax is the same as your income tax. Long term capital gains tax is much better. If you make less than $37,950 ($50,800 if you are head of your household) like me then you are taxed at a rate of 0%. That's right 0%. Yeah! Go long term capital gains!

Also, don't forget. If you lose money you can claim it as a deductible for up to $3,500 as a capital loss.

What if someone got payed in bitcoins and did not exchanged it for several years? So the income tax should be taken from the initial amount of btc in old btc rates or from the whole amount counting on actual rate?

The whole amount counting on the actual rate.

If I traded 31,500 Little Caesar's pizzas for a house of $200,000 and sold it many years later at $400,000? I would have to pay taxes on the house for the $400,000. So for BTC, you would pay the current rate for when you sold it. Since you've held it for years that would be at a long term capital gains rate.

[Palmerson]

I use bitcoin for small purchases and therefore do not pay taxes. The government of my country does not fight with bitcoin and so it was no problem. If you withdraw to a Bank account a large sum from the sale of bitcoins or make a major purchase then you will be in the interests of the tax service.

[DannyHamilton]

The whole amount counting on the actual rate.

If I traded 31,500 Little Caesar's pizzas for a house of $200,000 and sold it many years later at $400,000? I would have to pay taxes on the house for the $400,000.
- snip -

That is not true with United States federal income tax.

You would calculate the fair market value of 31,500 Little Caesar's pizza's and use that as a cost basis.  You would subtract that value from the $400,000 and pay the capital gains income tax on the difference.

Depending on how you acquired the  31,500 Little Caesar's pizza's you may or may not have to pay an income tax on the fair market value of 31,500 Little Caesar's pizza's in the year that you acquire the house.

[Harlot]

Well generally if your country has an income tax then it is taxable even if your earned it through Bitcoin. There is no escape from the law that says if your earnings are through Bitcoin then you won't be tax from it. Then if it is not taxable people will just shift to using Bitcoin instead. The purpose of taxing you is to avoid the unjust richness of a person and it is a way to fund the government. The only problem is it is hard to keep track of Bitcoin transactions whether or not what you receive is taxable or not.

[erickkyut]

I'm not familiar with the United States of America's taxation law but here in our country, there is no such law with regards to Bitcoin. Every one can enjoy their Bitcoin related income because the government has no means to identify on which citizen is using and earning from Bitcoin.

[iram3130]

It depends on your country's view towards cryptocurrencies. My local exchange puts a small tax based on buy/sell but there is no tax for deposits and withdrawals. Being a trader it is lot harder to make profit because of this.

[Kelvinid]

I'm not familiar with the United States of America's taxation law but here in our country, there is no such law with regards to Bitcoin. Every one can enjoy their Bitcoin related income because the government has no means to identify on which citizen is using and earning from Bitcoin.

You're right.I have never heard taxation on bitcoin in our country because i think the government does not have an idea yet on bitcoin here.I believe there are only few users here in our locality,not like in the other parts of my country.And yes you're right,who can anyway identify us as bitcoin users where in fact there's no personal identities required.

[DannyHamilton]

- snip -
who can anyway identify us as bitcoin users where in fact there's no personal identities required.

There's a big difference between:

"I do this thing that the local law says is illegal, because I don't think anybody knows I'm doing it, and/or I don't think I'll get caught."

and

"It is legal to do this thing according to local law."

Depending on what country you are in, there may be laws that require you to report all sources of income even if the government can't figure it out on their own. Failing to report the income could be illegal, and failing to pay taxes on the income could also be illegal.  Therefore, you may be guilty of breaking 2 (or more) laws by hiding your bitcoin income from the government.