Will the IRS want Bitcoins or US Dollars when paying taxes?

[mskryxz]

Will the IRS want Bitcoins or US Dollars when paying taxes?

If I DID NOT sell my Bitcoins, will I need to pay taxes on them even though they have NOT been sold?

Example: Invest $10,000 into 10 Bitcoins. End of year 10 Bitcoins = $100,000. I do NOT sell 10 Bitcoins at $100,000 (90,000 gain). Do I need to pay taxes for my unrecognized gain in $$ or is it considered a recognized gain since it went up and BTC?

Might belong in the Legal forum feel free to move if it should be there, mod.

Thanks

[1715399169]

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[1715399169]

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[1715399169]

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[1715399169]

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[coinslut]

No taxes needed, as of now the US government doesnt recognize your gain. Keep it in bitcoin.

[mskryxz]

Thanks for your answer.

BTW, your user name made my day lol nice name haha.

[BitchicksHusband]

Thanks for your answer.

BTW, your user name made my day lol nice name haha.

Bitcoins are Capital Gains.  As such, you should hold any given coin for a year before you sell, as this reduces the tax rate substantially (maybe even to 0% if you are in the lowest 2 tax brackets).

[Sindelar1938]

USD I would have thought if any gains are realised

[metall5468]

My question with taxes is if you don't exchange your bitcoins for USD than why should you pay taxes on a very volatile investment. Until you exchange for USD the price could plummet and you could lose a lot of money. Will the US govt. return my loses if that occurred? And how would you pay your taxes if you are locked in bitcoins without having to exchange and withdraw with high fees. Unless they start taking bitcoin. Just like apple stock for example if I buy a share of apple stock. I'm not gonna pay taxes on it till my position is closed. Shouldn't bitcoin be the same way? Am I wrong? Am I missing something?

[BitchicksHusband]

My question with taxes is if you don't exchange your bitcoins for USD than why should you pay taxes on a very volatile investment. Until you exchange for USD the price could plummet and you could lose a lot of money. Will the US govt. return my loses if that occurred? And how would you pay your taxes if you are locked in bitcoins without having to exchange and withdraw with high fees. Unless they start taking bitcoin. Just like apple stock for example if I buy a share of apple stock. I'm not gonna pay taxes on it till my position is closed. Shouldn't bitcoin be the same way? Am I wrong? Am I missing something?

You aren't missing anything.  This is exactly the way the government is looking at it so far.

[Impaler]

Miners who sell their coins though DO need to pay taxes.