Mixed BTC and taxes

[BillyBobZorton]

I once mixed an amount of bitcoins in the helix Tor mixer to test it out and see how it worked. It then came back to my wallet and I did nothing with it. I was just wondering, if I ever wanted to cash out this amount, wouldn't it be a problem when they ask me the origin of the funds? Since all the inputs and outputs are a mess of mixed coins, im scared that they would think I was doing something ilegal when I just mixed some amount to test things out then put it back into my wallet, but like I said, now im worried about ever selling these BTC because they got mixed.

The rest of my BTC I can prove the origin if needed, but not that amount due the mixing. And let's say it was 1 BTC of mixed coins, and let's say 1 BTC is worth $200,000 in a couple of years (at this rate is possible) and I want to use that 1 BTC to buy a house. I would be scared because I mixed them and I don't get into trouble, so I wouldn't be able to use that BTC to buy a house.. I hope you understand my point.

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[matuson]

In order to buy a house you will need to exchange your bitcoins for Fiat. You can always pay taxes with this amount and I think that tax authorities will not claim you. How can they trace the path of your coins? You can buy bitcoins in 2010. If you have concerns you can always arrange a mortgage and repay the debt installments.

[Taki]

In order to buy a house you will need to exchange your bitcoins for Fiat. You can always pay taxes with this amount and I think that tax authorities will not claim you. How can they trace the path of your coins? You can buy bitcoins in 2010. If you have concerns you can always arrange a mortgage and repay the debt installments.

Yes, I would like to add that you can't buy a house directly with bitcoins for now and you will have to cash out your coins to buy it. When the bank/government/tax service will see a big sum of money on your account they may ask you to explain where this money come from and if they count it as profit you will need to pay personal tax as well.

[BillyBobZorton]

In order to buy a house you will need to exchange your bitcoins for Fiat. You can always pay taxes with this amount and I think that tax authorities will not claim you. How can they trace the path of your coins? You can buy bitcoins in 2010. If you have concerns you can always arrange a mortgage and repay the debt installments.

Yes, I would like to add that you can't buy a house directly with bitcoins for now and you will have to cash out your coins to buy it. When the bank/government/tax service will see a big sum of money on your account they may ask you to explain where this money come from and if they count it as profit you will need to pay personal tax as well.

Guys try reading my thread before replying. I know that I can't buy a house with bitcoins and I would need to cash out. Im talking about the problem of how if you mixed that BTC, you will not be able to prove the origin of that BTC.

If you buy 1 BTC, and 2 years from now it's $100,000, you will have the receipt of the exchange to prove that you bought it, so you just have to pay capital gains tax on that.

If you mined 1 BTC, you can prove that it was mined by you for example signing the public key where it is proven that you had that private key that was freshly minted by you. Im not sure hot taxes go with mining but the point is you could prove it was legally acquired.

If you make here in the forums 1 BTC across years of posting in sig campaigns, or early on when you could make 0.5 BTC per month easily, you could prove that you made them posting here by for example, signing the public key that you posted here to get paid in the campaigns. (again not sure how taxes would work in this case, but you could prove you got this BTC legally)


The problem is, if you mix that 1 BTC in a mixer, you can no longer prove the origin because the mixer makes it a mess to prove in the blockchain, and I would be scared to sell that mixed 1 BTC... you know what I mean now?

[Harlot]

Taxes are really simple and you only have to based your Bitcoin on what its worth in your Country's Fiat Currency. Remember if you don't want to get in trouble with your huge quantity of Bitcoin you always need to record their fair market value during the time you have received your payment. Now suppose that Bitcoin or that other altcoin gained in value it will be categorized now as a capital gain which is taxable under capital gains tax. Always have it written as it can be a good proof if you get mixed up with the government.

[Don Pedro Dinero]

Why don’t you start spending/cashing out those bitcoins in small amounts?

Anyway, I don’t know how things work in your country but in most of them prosecutors must prove that you have done something illegal. The worst-case scenario you face is an investigation. Also, if those bitcoins were mixed I suppose they were mixed from different sources. It is not like they exchanged your coins for someone else’s who had been smuggling drugs or the like, so I see it very difficult that you would go to jail or had to pay a fine.

[Opquar]

Depends on how your country implements anti money laundering precautions. You could get tagged for sure, but if you have nothing to hide you have nothing to fear. You might get taxed though.

[matuson]

In order to buy a house you will need to exchange your bitcoins for Fiat. You can always pay taxes with this amount and I think that tax authorities will not claim you. How can they trace the path of your coins? You can buy bitcoins in 2010. If you have concerns you can always arrange a mortgage and repay the debt installments.

Yes, I would like to add that you can't buy a house directly with bitcoins for now and you will have to cash out your coins to buy it. When the bank/government/tax service will see a big sum of money on your account they may ask you to explain where this money come from and if they count it as profit you will need to pay personal tax as well.

Guys try reading my thread before replying. I know that I can't buy a house with bitcoins and I would need to cash out. Im talking about the problem of how if you mixed that BTC, you will not be able to prove the origin of that BTC.

If you buy 1 BTC, and 2 years from now it's $100,000, you will have the receipt of the exchange to prove that you bought it, so you just have to pay capital gains tax on that.

If you mined 1 BTC, you can prove that it was mined by you for example signing the public key where it is proven that you had that private key that was freshly minted by you. Im not sure hot taxes go with mining but the point is you could prove it was legally acquired.

If you make here in the forums 1 BTC across years of posting in sig campaigns, or early on when you could make 0.5 BTC per month easily, you could prove that you made them posting here by for example, signing the public key that you posted here to get paid in the campaigns. (again not sure how taxes would work in this case, but you could prove you got this BTC legally)


The problem is, if you mix that 1 BTC in a mixer, you can no longer prove the origin because the mixer makes it a mess to prove in the blockchain, and I would be scared to sell that mixed 1 BTC... you know what I mean now?

Who will take your evidence in the form of public keys? On this account, there are no normative documents. Any document of strict accountability has approved regulatory documents form. If there is any line then it can be declared illegal. It seems to me that your evidence doesn't matter for the IRS. You will have to pay tax on the income. Bitcoin will not be recognized by capital. Therefore there will be no growth.

[ember.suc]

From what I was told, sales taxes (like VAT) depend on who buys what from whom in which conditions (across borders, domestically, etc.). How you pay for the sale doesn't change anything.In other words, as far as I understand it: if you buy something worth 100€ which is subject to a 10% tax, the seller will have to give 10€ to the government. Whether you pay the invoice with euros, dollars, bitcoin, gold, candies or whatever other currency or commodity the seller accepts is irrelevant.

[darkangel11]

I was just wondering, if I ever wanted to cash out this amount, wouldn't it be a problem when they ask me the origin of the funds?

The rest of my BTC I can prove the origin if needed, but not that amount due the mixing.

I don't understand why would you ever want to explain how you got the coins, when you can always say that they were sold on an exchange and that's all. When you decide to buy a house (i'm assuming that it will be for fiat money) wire the coins to an exchange, sell them, get a screenshot of the transaction, wire the funds to your bank account and pay due tax based on the income from that transaction. All done. I don't think anybody will want you to proof where the coins came from, but if that happens you can always say that you bought them 2 years ago and held until this day. It's a viable explanation since BTC is worths like 12 times more than it was in 2015, so spending a trivial amount of 2000$ back then would allow you to buy a house today and I doubt any financial institution ever cared about or tracked one time payments of 1 or 2k.