MSN article on BTC and taxes.

[darkangel11]

This is the reason why we should really promote a decentralized bank of our own, where we can save our money without any questions from any of that banks.

A cryptocurrency bank? This idea isn't worth our time, really. A crypto bank won't serve any purpose in the world of decentralized coins and if they are to become centralized, what's the point of having a cryptocurrency in the first place? Just to have a fake feeling of being in control? No thank you.

I'm curious to see how these regulations play out because everything is still pretty foggy to me.

They will most likely destroy the experience for every cryptocurrency user and turn the whole thing into a maze of do's and don'ts that only government officials will be able to navigate.

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[yoseph]

My wife just emailed me this article. The IRS is really trying to scare you into reporting your transactions.   

https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL


If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker?  Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.

I really don't understand why the mainstream media is so against Bitcoins at all and when it comes to the taxes, they should ask the retailers that accepts Bitcoins because the total price people pay includes the taxes as well. And no one has the right to question where you get your bitcoins because it is virtual.

[HitbtcSCAM]

Everyone should stop paying taxes, let the us government sell its bitcoins to get its money ,then they will be forced to raise the price and that is good

[darkangel11]

I really don't understand why the mainstream media is so against Bitcoins at all and when it comes to the taxes, they should ask the retailers that accepts Bitcoins because the total price people pay includes the taxes as well. And no one has the right to question where you get your bitcoins because it is virtual.

The answer is very simple. They are too greedy!
When buying an item you always cover the cost of the item + excise and VAT which are taxes hidden in the price. There are also other like the import tax which rises the cost of the product at a retailer. But that's not enough, they also want income tax because they know how much BTC has grown in the recent years and that most of us have profited.
Don't think the biggest thieves out there will let you do your thing. You may be giving them half of your salary in taxes, it doesn't matter. Making some money from virtual tokens is a big no-no

[alyssa85]

What if you earn btc by mining? You are earning an income but if it just sits in your wallet how do you pay taxes on your earned income? What is the taxable value of btc? Are you suppose to keep track of the btc daily dollar value as you earn it to pay your income tax at the end of the year? If that’s the case I’m going to write off my equipment and my electric bill.  Then again if you sell your mining equipment that’s income and you have to pay taxes on that too. I’m merely trying to make sense of all this. Not avoid taxes.

If you are a miner, surely that's a business - so the calculation will be revenue (the coins you mine and sell) less expenses (the cost of buying the miner + electricity).

If you are a serious miner then it might be worth doing it as part of a limited company (i.e. incorporate) rather than as an individual.

[TooDumbForBitcoin]

another one article on regulations from wall street journal. Author is the SEC chairmen
https://www.wsj.com/articles/regulators-are-looking-at-cryptocurrency-1516836363

[eaLiTy]

If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker?  Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.

If you are aware of that,if you get to a bank with loads of money you have to provide your source ,this is nothing new,if you have acquired your money by legit ways then what is wrong in producing the source of that money,no one can tax us for the coins we are holding and hopefully no country will come up with those stupid laws but expect some regulation coming up this year and hopefully everything will be fair.

[btcrich]

Everyone should stop paying taxes, let the us government sell its bitcoins to get its money ,then they will be forced to raise the price and that is good

How do you propose that,if you stop paying your tax then you will be facing some consequences because of that,either you have to pay a huge fine to sort that out,all the countries are planning to come up with regulations and even now we are paying taxes for the amount of coins we are selling,i am personally filling my taxes for the profits i get through trading because i do not want any trouble .

[A.Delaney]

What if you earn btc by mining? You are earning an income but if it just sits in your wallet how do you pay taxes on your earned income? What is the taxable value of btc? Are you suppose to keep track of the btc daily dollar value as you earn it to pay your income tax at the end of the year? If that’s the case I’m going to write off my equipment and my electric bill.  Then again if you sell your mining equipment that’s income and you have to pay taxes on that too. I’m merely trying to make sense of all this. Not avoid taxes.

If you are a miner, surely that's a business - so the calculation will be revenue (the coins you mine and sell) less expenses (the cost of buying the miner + electricity).

If you are a serious miner then it might be worth doing it as part of a limited company (i.e. incorporate) rather than as an individual.

If I mine btc and sell it on an exchange then I would most certainly expect to pay taxes on my earnings. I would never try to dodge that. However if you never sell your btc and save them for a few years. How do you pay taxes on them if you didn't sell them? What is the value of them if you didn't buy them?
I could say ok I earned .03 btc today mining. Today its worth $330 USD so I made $330 today. However you don't pay taxes by the day. So if the price is down at the end of the year did you lose money since its worth less than the day you earned it or did you make money since you did receive payment for your work?

[A.Delaney]

If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker?  Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.

If you are aware of that,if you get to a bank with loads of money you have to provide your source ,this is nothing new,if you have acquired your money by legit ways then what is wrong in producing the source of that money,no one can tax us for the coins we are holding and hopefully no country will come up with those stupid laws but expect some regulation coming up this year and hopefully everything will be fair.

Filling out paperwork explaining where you got the cash from is merely a formality. Who is going to say they sold illegal drugs or laundered it? The simplest answer is I saved it. The point is the US is suppose to be a "free" country. Ya its free as long as your are politically correct and every move you make is accounted for and documented.

[squatter]

How can they determine the value of a used cell phone?

The price of the phone (in BTC) can be used to determine the fair market value. Let's say you bought some BTC and later traded some of it for the used cell phone. If the phone cost 0.02 BTC, then the market value of BTC at the time of the transaction determines the fair market value. Let's say the price of BTC was $1000 when you bought the phone:

0.02 BTC x $1000 = $20. That's the fair market value of the phone.

Now let's consider the basis of your BTC. Let's say you bought BTC at $500; that's your basis. That means that the 0.02 BTC that you traded for the phone has this basis: 0.02 BTC x $500 = $10.

That means you realized a $10 gain when you bought the phone.

If I buy a pencil at Walmart with USD and trade you for a calculator then I owe capital gains tax. We dont know how much for sure because there is no way to value a used calculator.

It's harder to make this argument with Bitcoin because it is widely traded. You can't argue "we dont know how much" because we have widely accepted tickers. There is no market for used calculators, but it's quite easy to tell you what 1 BTC is worth at this moment. (Next question: What exchange price should you use? Answer: It doesn't particularly matter as long as you are consistent and the exchange you cite isn't divergent from the market)

[A.Delaney]

How can they determine the value of a used cell phone?

The price of the phone (in BTC) can be used to determine the fair market value. Let's say you bought some BTC and later traded some of it for the used cell phone. If the phone cost 0.02 BTC, then the market value of BTC at the time of the transaction determines the fair market value. Let's say the price of BTC was $1000 when you bought the phone:

0.02 BTC x $1000 = $20. That's the fair market value of the phone.

Now let's consider the basis of your BTC. Let's say you bought BTC at $500; that's your basis. That means that the 0.02 BTC that you traded for the phone has this basis: 0.02 BTC x $500 = $10.

That means you realized a $10 gain when you bought the phone.

If I buy a pencil at Walmart with USD and trade you for a calculator then I owe capital gains tax. We dont know how much for sure because there is no way to value a used calculator.

It's harder to make this argument with Bitcoin because it is widely traded. You can't argue "we dont know how much" because we have widely accepted tickers. There is no market for used calculators, but it's quite easy to tell you what 1 BTC is worth at this moment. (Next question: What exchange price should you use? Answer: It doesn't particularly matter as long as you are consistent and the exchange you cite isn't divergent from the market)

Ok so what about If your buying something that cost $200 but paying with BTC and don’t have it?  So you go buy $200 worth of BTC and then immediately send the BTC to the seller. There’s no gain in value so is there a tax? $200 for $200 in BTC to buy something that cost $200.

[South Park]

This  makes it almost impossible to use crypto on a daily basis for living. If starbucks accepted crypto for coffee. You would have to keep track of every cup you bought all year since your crypto property was magically converted to cash and used to buy coffee. Imagine trying to live off crypto only. Not that it is really possible right now but could be someday. You would have to document every single purchase all year.

But that is exactly their intention, they know they cannot ban bitcoin directly since a ban is going to fail, they cannot seize bitcoin either so what are they doing? They are trying to kill bitcoin with overregualtion, they will try to make bitcoin so difficult to use that most people will not want to bother to use bitcoin in their everyday lives, their logic does not make sense, but they are going to use it to protect their fiat at all costs.

[Drunkenhorse]

Funny thing is how to explain if you made bitcoins from 0, did not invest a cent, I guess their logic will be broken.

[squatter]

Ok so what about If your buying something that cost $200 but paying with BTC and don’t have it?  So you go buy $200 worth of BTC and then immediately send the BTC to the seller. There’s no gain in value so is there a tax? $200 for $200 in BTC to buy something that cost $200.

If there's no gain, there's no tax. They're just trying to capture the capital gains, not tax you for using BTC.

On the flip side, if you lose money by holding BTC and then spending it, that's a loss that can offset other taxable gains. It's a real bitch to keep track of, though.

Funny thing is how to explain if you made bitcoins from 0, did not invest a cent, I guess their logic will be broken.

That works for CPU mining with your PC in the early days, but that's about it. The IRS has a taxation scheme for just about everything. Mining and regular work paid in BTC is ordinary income. So even if you don't invest USD directly into BTC, they'll argue any bitcoins you "made" without investment were income.

[Kotone]

My wife just emailed me this article. The IRS is really trying to scare you into reporting your transactions.   

https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL


If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker?  Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.

With how countries are starting to get more noticing bitcoin and cryptocurrency as a whole. Some tax agencies have been starting to whiff to get or to tax these so that they might use it for their gain. However some of these are just baits and not even authorized by the government itself and just an autonomous move by them as the country or governments worldwide still do not have regulations for this.

[LeonardoDiCrypto]

So the people that ordered 100k worth of miners from Bitmain. Will they need to report that if they paid in BCH and Bitmain is in China?

This is an interesting question, which opens up the debate if you have to declare each currency that you eventually sell for cash.

[South Park]

My wife just emailed me this article. The IRS is really trying to scare you into reporting your transactions.   

https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL


If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker?  Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.

I really don't understand why the mainstream media is so against Bitcoins at all and when it comes to the taxes, they should ask the retailers that accepts Bitcoins because the total price people pay includes the taxes as well. And no one has the right to question where you get your bitcoins because it is virtual.

They are so against bitcoin because those are the orders they received, most news papers, magazines and websites that have anything to do with serious news, are dependent on the money that comes from the governments so they cannot speak against them, the media is not effective anymore because of that and since bitcoin affects the interest of governments, banks and big business then the media is used by all of them to spread lies about bitcoin.

[penig]

This is straight forward, there is nothing against bitcoin and crypto here, they are applying the same rules that already exist for other trading.  What, you thought you could trade with non-cash goods and that wouldnt have been exploited for decades?  Have shares and trade for gold, or vice versa, no taxes to pay?     Of course not.  Your country wants you to declare your earnings, income, profits, and pay tax on them regardless how you made them.

[jeffer8035]

always in the banks to look for the cash when the bitcoin is implemented as it is really going to end all that