bitcon taxes

[GriTBitS]

What if for governments to tax bitcoin they tax a percentage of all the fees that are included with the blocks. What's your thoughts? That would be a pretty simple way to do it. And then they were slit up based on world hash rate per country kinda like, pools split the coins up, but between countries based on the area the mining pool was or the individual mining.

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[SeanArce]

Taxes are based on coercion of the people. Bitcoin is like in the maxtrix world and neo can fly and stuff. Will be hard for a group of fallible beings to be able to tax blocks

[MPOE-PR]

What if for governments to tax bitcoin they tax a percentage of all the fees that are included with the blocks.

Why?

[stompix]

What if for governments to tax bitcoin they tax a percentage of all the fees that are included with the blocks. What's your thoughts? That would be a pretty simple way to do it. And then they were slit up based on world hash rate per country kinda like, pools split the coins up, but between countries based on the area the mining pool was or the individual mining.

Please let me know how you envision this happening.

[superduh]

if they "Tax" based on location of miners than all miners would just move to the countries offering best rates on electricity / taxes (this is what every business in the world does)

google: apple ireland

[franky1]

the government will only tax you on the FIAT profit you make. EG when you cash out and put the funds into your bank account.

remember the rules of trading. you have not profited or lost until you sell.

[mymenace]

The best way to tax bitcoin or even income is not to

implement goods and services tax only

everything you buy a proportion is government tax

this already happens and would probably be needed to increase to replace income tax

seems to work great

for example

a low income worker will not buy a $10000 tv he would maybe buy a $1000 tv

tax at 25% = $250 tax

a high income worker will buy a $10000 tv

tax at 25% = $2500 tax


i would like to hear ideas contrary to the above as it would provide great insight

[beetcoin]

here is where it gets murky for me. is BTC considered a currency or an investment? if i bought into btc at $100 and cashed out by "spending" in a gyft.com gift card, is that considered capital gains? bitcoin is half currency, half store of value/investment. as far as i know, there is no precedent in the history of mankind that compares to BTC.

[bitmarket.io]

the government will only tax you on the FIAT profit you make. EG when you cash out and put the funds into your bank account.

remember the rules of trading. you have not profited or lost until you sell.

bingo. same as dividends from the stock market.

[beetcoin]

my point is that bitcoin is not 100% like the stock market, so i'm not sure how they can justify taxing you the same way. USD is taxed, but only on income, sales or capital gains (maybe something else too, as i'm not too well educated on this), but the problem is how you define "capital gains," especially if people are just spending their BTC.. would they only be subjected to sales tax, or would it be capital gains + sales, or a partial mixture of both?

[dominicwin]

Regarding U.S. citizens, no one really knows right now, but they will outline surely at the result of the senate hearings. They have already discussed taxation as a subject to be discussed.

[mgio]

the government will only tax you on the FIAT profit you make. EG when you cash out and put the funds into your bank account.

remember the rules of trading. you have not profited or lost until you sell.

That's not really true.

If you mine bitcoins, you owe income tax based on the value of the coins you mine, when you mine them.

Then later, if you sell, you owe capital gains tax on the difference between the value of the coins when they were mined and the price you sell them for (if there is a gain).

Of course, this is a HUGE pain since for most people mining in a pool mining is a continuous process and the BTC exchange rate is constantly changing. Also, what even do you use for the current BTC rate! MTGox isn't realistic like it used to be since no one in the US sells there anymore.

[CoinCube]

the government will only tax you on the FIAT profit you make. EG when you cash out and put the funds into your bank account.

remember the rules of trading. you have not profited or lost until you sell.

If you mine bitcoins, you owe income tax based on the value of the coins you mine, when you mine them.

Then later, if you sell, you owe capital gains tax on the difference between the value of the coins when they were mined and the price you sell them for (if there is a gain).

Of course, this is a HUGE pain since for most people mining in a pool mining is a continuous process and the BTC exchange rate is constantly changing. Also, what even do you use for the current BTC rate! MTGox isn't realistic like it used to be since no one in the US sells there anymore.

I disagree. If I mine a nugget of gold from the ground I don't owe taxes on that until I sell it. Similarly If I build a chair in my workshop I don't have to pay taxes on that chair until I sell it.

I view bitcoin as a commodity. Until the IRS says explicitly otherwise I am perfectly comfortable not paying taxes on any bitcoins I mine until I sell them. I think you are safe doing so as long as you report capital gains when you sell them.  The IRS has not issued firm guidance on this issue other then to say you "might" owe taxes on mined coins.

If you sell and then buy more coins with the profit on an exchange, however, and don't report taxes well then you are playing with fire. If you live in the US I think you are asking for trouble.