Wanna start a Bitcoin Business properly, help.

[moocow1452]

So, I want to start a website where I Buy/Sell/Trade physical goods for Bitcoin, mostly because the guys on Pawn Stars make it look awesome, and because I have a lot of books, vinyls, old games, and electronic bits and do-dads to get rid of, and if it makes me a better entrepreneur, then that's kinda cool. Maybe even buy/sell Amazon credit, but I haven't decided if there is enough of a demand to leave that sort of trail.

Anyway, the point. I want to know how I am supposed to run this thing without tripping something or other on the legal side. I'm in the States, and know about the whole lawn mowing analogy, but the wiki wasn't very helpful on what to do if I wanted to start a personal trade, and what paperwork to jump through to not be running what amounts to a black market. Anyone want to throw me a bone on tax law?

BTW, I'm thinking a tumblr for hosting with a private domain. Not in expert in web presence, but that seems sufficient, right?

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[koin]

what paperwork to jump through to not be running what amounts to a black market. Anyone want to throw me a bone on tax law?

there's little difference, tax wise, between using bitcoins for commerce versus using cash or any other payment method.

just like selling on ebay, yahoo shopping, etc, there's very little paperwork necessary.  for a small volume business, simply having a record of the basic details of each transaction (date, item sold, price) will be enough come tax time.  that's for both buying and selling of goods.  

when transactions are made in btcs, using the daily "closing price" data from an exchange will likely be suitable to be able to convert bitcoins to the value in us dollars at the time of sale or purchase, for tax purposes.  

you will probably exchange those bitcoins into and back from dollars so keep a record of those transactions as well to be able to know the capital gains on those holdings.  keep your personal accounts/wallet separate from your business accounts/wallet to keep things easier to follow.

here's more info: http://en.bitcoin.it/wiki/Tax_compliance

[sporelord]

I hate to think that you paid taxes when you bought all that stuff, now you have to pay taxes when you sell it.. 

[PiGames]

Wouldn't 'selling' something for btc be considered a trade? Since it's not a legitimate currency (as far as government is concerned)?
Wouldn't it be the equivalent as saying I'll trade you this book for an ear of corn or even I'll trade you this book for the book you already have.
I fail to see how you would pay taxes on something that has no guaranteed value. Btc could be worth $.01 tomorrow (or $1000). Do you pay taxes on realized profits or speculated gains?

Needless to say I'm in the same boat as you. Not sure how to categorized btc revenue (but I don't have a btc accepting business).

Another good question. If you do in fact have to pay taxes on btc. Since it's extra income originating in your home office. Does that mean you can write off you video card/electricity expenditures?

[BitHippie]

If you need a domain name and whish to pay using Bitcoins register your domain here: http://www.BitDomain.BIZ