Bitcoin millionaires, tell us your story!

[balanghai]

If you would just treat BTC as savings, then IRS wouldn't that big of a problem. But if you start withdrawing huge lump sum. It would ring all the bells and brings the spotlight to you.

[1714124444]

1714124444

[joshv06]

I'm 21, I made $10,000 from selling 2x BFL Singles I bought (I was within the first month). That's about the most I've made at one time. It felt good XD.

At one point I had 1000BTC back in 2011. I would be a BTC millionare.

Funny thing is that I tried to get so many people into BTC but no one wanted to invest/make GPU rigs. They kept telling me BTC was a scam, blah blah blah. Then when it hit the news, everyone came back to me wanting to know more info. Too bad.

[tvbcof]

yeah you could hold them for a year and pay only 15%.

This is thus far the most tax-optimal strategy I've seen.

If you make less than $70,000 joint ($36,000 single?) other than your bitcoins then you can pay 0% capital gains.  So make sure that you hold them for at least a year.

I notice that the most recent Forbes article steps around mentioning the long term capital gains rate (0%) in the lower two brackets:

  http://www.forbes.com/sites/greatspeculations/2013/12/03/the-tricky-business-of-taxing-bitcoin/

Gee, I wonder why?  What scum.

[GigaCoin]

Why do people dream of retiring and being "set for life" anyway. Its a pretty boring way to live.

completely agree, i'll always work even after 65 i plan to work till the end. However it doesn't mean a 9-5 year round kind of scenario i'm thinking more like work 7 months, 5 months holiday

[Mondy]

Well it all started in 2009 when i started bitcoin up...

[shadowninjax]

I wish I was one of them to tell you  a story   ,but sadly I am a bit late to the party. Still, trying my best to earn and invest some. Its inspiring to see other people's stories posted here. You'v been quite lucky guys.

[tvbcof]

My CPA assures me that capital gains do not 'back-feed' and become earned income.

This is tricky.

From what I've read, capital gains are stacked on top of your normal income, so they will not push your regular income into a higher bracket.

But... let's say your regular income is $4000 short of the amount needed to put you in a 25% tax bracket (thus 15% tax on capital gains). If you have $10,000 in capital gains, $4000 of that will be taxed at 0% and the $6000 that puts you into the next bracket will be taxed at 15%. Your regular income is still taxed at 15%. Is that what your CPA told you?

Typical disclaimer that this is not tax advice and one should seek professional tax advice, blah blah blah.

This does NOT seem to be the message I was getting in my case.

It is critically important the my Bitcoin speculation is not associated with any form of business but is rather just a private individual adventure but I forgot the exact technical term used.  If the profits are associated with a business things get very ugly very quickly.

As always, standard disclaimer, get professional tax help and some idiot on a forum does not qualify.

As a follow-up:

My CPA's current read is that the long term capital gains DO 'back-feed' into ones income and push them into a higher bracket where the 0% rate does not apply.  She says that the verbiage has been changed slightly this year or last, and it is still a bit nebulous.

Also, I neglected to think much about my state tax.  It's 9% across the board and they don't pay any attention to the long term capital gains nonsense.

So, I'm looking at either 24% or 34% of my sales going to taxes.  It's still less by percentage than your average working stiff and less than I paid when I was one.  This is especially the case when one blows all their income on trinkets which are significantly taxed in most states, so I'm not really complaining all that much.

Had I not been pretty conservative in my financial planning when I took some BTC profits I very well could be looking at a situation where I had to sell at today's (hopefully) shitty prices.  Even so, my CPA didn't do me any favors by changing her interpretation.  The initial assurtion was a strong factor in my selling regime, and I would have massaged what in retrospect was recent peak prices more rather than waiting until 2014 to start.

Now that more people have doubtlessly been talking to their CPA's, I'd be most interested in whether other's have a different interpretation about whether capital gains impact one's tax bracket.

[serenitys]

I KNOW yall aren't so naive as to think fiat millionaires are being good little boys and girls and reporting their real wealth to the IRS like they're all "supposed" to.  Get real. The more wealth they build, earn or steal, the more creative ways they find to AVOID giving the IRS jack shit if they can help it.

The rest of the non millionaire world gets the abuse and shake down because they don't have the wealth to avoid it. Bitcoin gives them that opportunity...and they won't be paying the IRS there either...and the IRS knows it...and if the IRS doesn't know it, it will soon enough.

Then it'll just be too late,

[Bit_Happy]

...
I sold 500 BTC for $119.99 and I used the fiat to buy a nice car: http://www.lexus.co.uk/car-models/rx/rx-450h/  In real terms, it cost me less than $2000.
...

Looks like a modernized version of the Ford LTD that my grandfather had.

When I can afford an old station wagon, I will finally be set for life.   

[Beliathon]

Why do people dream of retiring and being "set for life" anyway. Its a pretty boring way to live.

I'm gonna take a wild guess and say you've never experienced the wage-slavery that is a shitty minimum wage (or near-minimum) job in Amerikkka.

Or if you have, you've long since forgotten how soul-destroying it was.

[tvbcof]

I KNOW yall aren't so naive as to think fiat millionaires are being good little boys and girls and reporting their real wealth to the IRS like they're all "supposed" to.  Get real. The more wealth they build, earn or steal, the more creative ways they find to AVOID giving the IRS jack shit if they can help it.

The rest of the non millionaire world gets the abuse and shake down because they don't have the wealth to avoid it. Bitcoin gives them that opportunity...and they won't be paying the IRS there either...and the IRS knows it...and if the IRS doesn't know it, it will soon enough.

Then it'll just be too late,

I'm betting that the ascii string 'bitcoin' will trigger extra scrutiny over the next few years.  Also that the linkages which might tie one to that revenue stream will be analyzed with extra scrutiny.

I also don't think that even large Bitcoin players have had the time to arrange for the same kinds of graft that the typical mainstream financial types leverage.

For these reasons, it would not surprise me if a fair number of high powered Bitcoiners actually do decide to dot all of their 'i's, etc.  Most people who have money didn't get that way or don't stay in that category by making silly mistakes.  Bitcoiners who play their hand right may well end up with enduring wealth.  Those who don't may very well find themselves body-slammed as a result of their 'creativity'.

I actually hope that Bitcoiners do get away with 'cheating' since a good part of my tax dollars are going to be supporting things I vehemently oppose (e.g., killing villagers with drones, ethnically cleansing the Palestinians, etc.)  For my part, I don't play around with stuff I don't understand, and I don't feel like putting in the effort required to game the tax system significantly.  I'll grit my teeth and pay my taxes.  If interpretations change, I'll file for a refund (which I've done in the past successfully.)  Through what is mainly luck I've had some good timings over the course of my experience with Bitcoin.  I'll just pretend that my timing fell a little shorter than it did.  I've still made a bundle on Bitcoin, and the potential exists to make a bunch more.

[Polycoin]

The age or full name won't be released, but someone made 300million off BTC last month. His name rhymes with Dark Barpeles.

Who is that?

[BitCoinDream]

The age or full name won't be released, but someone made 300million off BTC last month. His name rhymes with Dark Barpeles.

Who is that?

And he's gonna spend half of his wealth on his lawyers ...right ? + He'll live rest of his life with the fear of being murdered any time.

Is that a millionaire lifestyle ?

[tvbcof]

The age or full name won't be released, but someone made 300million off BTC last month. His name rhymes with Dark Barpeles.

Who is that?

And he's gonna spend half of his wealth on his lawyers ...right ? + He'll live rest of his life with the fear of being murdered any time.

Is that a millionaire lifestyle ?

It would take balls of steal to lift that much money out of a pool of victims which almost certainly include some pretty rough players.  I sense that Karpeles is indeed kind of a detached air-head, but nobody is that stupid.  I'm betting that there is more to the story than we currently think we know.

OTOH, nobody has yet been subject to much more than a few weeks of abuse on trolltalk even when they lift millions.  Maybe even half a billion is safe to pocket?  Time will tell I guess.

[Bit_Happy]

Why do people dream of retiring and being "set for life" anyway. Its a pretty boring way to live.

I'm gonna take a wild guess and say you've never experienced the wage-slavery that is a shitty minimum wage (or near-minimum) job in Amerikkka.

Or if you have, you've long since forgotten how soul-destroying it was.

Some crappy jobs are OK short-term.
It can depend on who you work with and what you do.

[serenitys]

Punchline?

Looks like bitcoin accomplishes one thing quite well: exposure, ironically.

While it protects via anonymity, it exposes through protest. The ones who seriously want to squelch it do not have human interest in mind, they are anti freedom, and anti progress...and pro corruption and greed. To not promote a free market currency is to show your colors as a vile corrupt psychopath...so we'll all know who to steer clear of.

It also exposes the weak spined cowards who are too lazy and inept to just fucking adapt and take responsibility for governing SELF.

And those who cannot adapt go the way of the dinosaurs.

You don't have to believe in evolution or natural selection but it won't save you from being a victim of it...

[jonald_fyookball]

Kids, a million dollars really isn't all that much anymore.  I know it appears to be alot if you are making minimum wage and living in your parents basement.  But if you are out in the world and paying your own way, your own insurances etc (because you are living on your million dollars without having a job), you may not even be able to live to retirement age on that much money, much less continue on into your golden years with a reasonable level of finances.

Just sayin...do the math and tell me I am wrong...

Say you are 25 years old and will retire at 65.  One million dollars is only $25,000 per year (not counting a hit of about 38% in taxes).  Then at 65 you will have about zero dollars remaining.

Don't tell me about making wild interest on your money.  Interest rates are near zero.  Inflation is going to further erode the value of your money.

One million dollars is not nearly enough to get you through life comfortably.

In the US - possible. In Europe there are still countries where minimal wage is about 5k$/year! I happen to live in one of those, so I guess 25k/year would allow you to live like a king there. I also stopped living with my parents when I was 18 and I'm telling you 1mil can be a shit load of money. I personally know people that earn less than 3$/h

Where do you live?

$25k in the US basically allows you to live in poverty. You can work as a McDonald's cashier and make a little under 25k. To live a "comfortable" middle-class life requires about $70k a year, assuming 0 inflation.

yeah...it really sucks...  being a millionaire in the usa
doesnt mean you're rich. AT ALL!

$70k a year used to be good money...

what a joke this fiat money is with its inflation.

Thank god for Bitcoin!

[jonald_fyookball]

i just read this... if its true, its really sad.

http://www.infowars.com/9-of-the-top-10-occupations-in-america-pay-an-average-wage-of-less-than-35000-a-year/

[bryant.coleman]

i just read this... if its true, its really sad.

http://www.infowars.com/9-of-the-top-10-occupations-in-america-pay-an-average-wage-of-less-than-35000-a-year/

I am seeing more and more people doing two-jobs at a time, working up to 16 hours a day. Sad.  

[jonald_fyookball]

i just read this... if its true, its really sad.

http://www.infowars.com/9-of-the-top-10-occupations-in-america-pay-an-average-wage-of-less-than-35000-a-year/

I am seeing more and more people doing two-jobs at a time, working up to 16 hours a day. Sad.  

We poor millionaires feel broke but these people are straight up shits creek with no paddle.
This is what people have to realize. The US dollar, federal reserve, banksters and all their cronies
Have totally fucked over everyone .. If you're not outraged you are definitely not paying attention.
Of course I'm preaching to the choir here ....sigh