Buying bitcoins discreetly and then claiming tax return

[Morbid]

i want to know your opinions how can one buy bitcoins as if some product and then claim it as expense at the end of year? directly or indirectly. applies to self employed folk out there.

[murraypaul]

Why not just write to the IRS and ask be be audited, rather than taking the roundabout route?

[Morbid]

i can only claim materials and expenses related to my business. im not selling anything but only provide service. i need to know if its possible to buy material/expense for fiat and getting bitcoins in exchange for investment. then when time comes claim that purchase as expense for it somehow relating.

[MA5H3D]

It sounds like you're just talking about "over invoicing", people have been working those angles for years using cash.. For example, if your company was buying a few company cars, you could probably get a nice discount from a dealer, but if you find the right dealer, you can pay list price on all the cars and he'll give you 10k in cash under the table.

I'm sure it wouldn't be too hard to find someone who's willing to "over-invoice" you for something' in return for some coins. Infact, I'm fairly certain that you could get someone to completely falsify some invoices for you, but I really don't think that's the most effective way of paying less tax with bitcoin.

[sinner]

professional poker player can buy bitcoin on localbitcoins with cash and claim i lost that cash playing poker.  technically all the IRS needs is a log of my play (which i write) and i can claim any loss.

if ur doing an actual business just write it off as consulting or any invoice would work like mash3d said

[msc]

Buying BTC isn't an expense - it's an investment, or a currency exchange.  If you sell the BTC, you claim the net profit or loss.  If you spend the BTC, you're disposing of it, which is the same as selling it.  If the BTC is stolen, it's an investment loss.

For example, say you buy 1 BTC for $100.  Later, you spend that 1 BTC on materials that are worth $120.

Your net P/L from trading is $20, and your business expense is $120.  Keeping the trading activity separate from your other business activities makes your books more elegant, and usually lowers your tax due to the capital gains rate.

Now if you're primarily a miner, then you might want to come up with another arrangement to make sure you can deduct all of your equipment cost against your BTC sales.

Just my opinion.  IANAL.

[RagnarDanneskjold]

There are plenty of legitimate scenarios in which one might choose to use & write off BTC (and all associated tx fees) as a business tool/expense.

It so happens that most of the products and services available for BTC are common business overhead (web & app development, pc equipment, etcet)

Say you want to hire Carlos from Argentina to develop an app for your company website.  Carlos only accepts BTC and obscure WoW faction currencies.  You can write off the equivalent sum plus your  MtGox/CoinBase transaction costs PLUS the cost of the time you are paying yourself for administering those transactions; then to keep things complex and convoluted, you can pay yourself in BTC and 'cash it out' in BBQCoin. 

[niko]

There are plenty of legitimate scenarios in which one might choose to use & write off BTC (and all associated tx fees) as a business tool/expense.

It so happens that most of the products and services available for BTC are common business overhead (web & app development, pc equipment, etcet)

Say you want to hire Carlos from Argentina to develop an app for your company website.  Carlos only accepts BTC and obscure WoW faction currencies.  You can write off the equivalent sum plus your  MtGox/CoinBase transaction costs PLUS the cost of the time you are paying yourself for administering those transactions; then to keep things complex and convoluted, you can pay yourself in BTC and 'cash it out' in BBQCoin. 

The tax man is laughing, then choking...

[Morbid]

There are plenty of legitimate scenarios in which one might choose to use & write off BTC (and all associated tx fees) as a business tool/expense.

It so happens that most of the products and services available for BTC are common business overhead (web & app development, pc equipment, etcet)

Say you want to hire Carlos from Argentina to develop an app for your company website.  Carlos only accepts BTC and obscure WoW faction currencies.  You can write off the equivalent sum plus your  MtGox/CoinBase transaction costs PLUS the cost of the time you are paying yourself for administering those transactions; then to keep things complex and convoluted, you can pay yourself in BTC and 'cash it out' in BBQCoin. 

The tax man is laughing, then choking...

hahaha. you have to admit there are good ideas here. id like to see where fantasy of other members will take us. maybe we can find perfect/easiest loopholes.

[murraypaul]

Much of what has been described so far isn't a loophole, it is tax evasion.
One is legal, one isn't.

[Bitcoinpro]

i want to know your opinions how can one buy bitcoins as if some product and then claim it as expense at the end of year? directly or indirectly. applies to self employed folk out there.

you would need to look up currency exchange tax rules

[Aseras]

Easier to collect lottery tickets from the trash, or to claim losses in a Ponzi or something else retarded and hard to prove.

[millsdmb]

i want to know your opinions how can one buy bitcoins as if some product and then claim it as expense at the end of year? directly or indirectly. applies to self employed folk out there.

technically the only way to avoid capital gains from sale of bitcoins is to buy things, so I dont think this is that crazy of a question. Can you handle an audit?