US Gox Account Holders - Think About Filing That FBAR/Form 90.22.1

[Bob Derber]

As you have probably read, the US Atty. for the SDNY has issued a subpoena for Mt. Gox Records according to news reports.

If you had an account at Mt. Gox last year, and if AT ANY TIME DURING THE YEAR the account value exceeded 10k, you may want to file a foreign financial account form - called a 90.22.1 form (also known as FBAR).  Remember CoinDesk reports $1,147.25USD per BTC on 12/04 of last year as the highest value for BTC - Gox was likely higher and is a safer number to use but their site is down.

I have seen nothing on what was requested in the subpoena.  Subpoenas are typically not made public unless released by the individual or corporation who received the subpoena.  I also don't know who was the entity the subpoena was issued to - Mark personally, Tribane, Mt. Gox LLC, the US subsidiary that was subject to the seizures last July, Mutum Sigillum LLC or some other Gox-related entity.

In the meantime, all the more reason that you consider filing the forms..... and presume your account and trading information will be turned over.

Link for info and form is below.  The penalties for not filing are hefty.  If you had several accounts at Gox I suspect they will be looked at as if they were a single account...

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Report-of-Foreign-Bank-and-Financial-Accounts-FBAR

[fasmax]

I couldn't get any dollars out of my GOX account all year.
I had about 16BTC in my GOX account and 1 or 2 thousand US dollars.
You really think I should amend my tax return?

[ISAWHIM]

That is sort-of untrue...

You would have had to actually "sold BTC" for that price, and also, still have held that value in cash, at the time of closure.

As asset-value, the price at any time is irrelevant. It is the price at which it was "earned", or "deposited" if you can't provide proof of when you first obtained or "earned" it.

In the end, accounting for "losses and gains", your NET worth, would have had to been over $10,000 and also have been "withdrawn to cash", or "realized", before that form was required. Also, if you are not a business, you need the personal version, not the business version.

One coin selling a $1,000,000 does not make all assets (BTC) of that value. Unless you only had one coin, and the one coin sold for that value, was yours... and you got the coin for free... and all $1,000,000 was "income". Than that is your "asset value". However, not being withdrawn, thus the reason for filing, it has not been "realized". Because no-one has actually given you that money. (If gox didn't have that money, for instance, or the BTC, then it would never be "realized".)

By the way... you don't have to sue to get your money back. As customers, you just have to ask for it back, when they release the help-line and other contact information. That will be managed by the bankruptcy department, if they approve his filing for bankruptcy protection, and decide to seize his assets, or manage his redistribution, until they allow him to continue to operate, or sell, to make the remainder of losses back. Once they actually determine who lost what, and what the actual losses were.

[ISAWHIM]

I couldn't get any dollars out of my GOX account all year.
I had about 16BTC in my GOX account and 1 or 2 thousand US dollars.
You really think I should amend my tax return?

If you didn't get it.. it wasn't "IN COME"... If it was in a bank, and obtainable (in your pocket), then it was income, at that point. Otherwise, it would have been savings, or long-term holdings of assets. (Gox was essentially a "promise to pay", but one which "could not have been realized", so not income.)

What was the value of BTC at the time you obtained it... (What did you buy it for, or what did it cost you to produce it?) Also, was that $2000 from a trade, or deposited?

[fasmax]

I couldn't get any dollars out of my GOX account all year.
I had about 16BTC in my GOX account and 1 or 2 thousand US dollars.
You really think I should amend my tax return?

If you didn't get it.. it wasn't "IN COME"... If it was in a bank, and obtainable (in your pocket), then it was income, at that point. Otherwise, it would have been savings, or long-term holdings of assets. (Gox was essentially a "promise to pay", but one which "could not have been realized", so not income.)

What was the value of BTC at the time you obtained it... (What did you buy it for, or what did it cost you to produce it?) Also, was that $2000 from a trade, or deposited?

Most were mined (produced) when BTC was just a few dollars. I sold several as the price of BTC increased and rebought as the price decreased. I had just under 20 BTC and no USD when GOX locked us out.

[Stephen Gornick]

If you had an account at Mt. Gox last year, and if AT ANY TIME DURING THE YEAR the account value exceeded 10k, you may want to file a foreign financial account form - called a 90.22.1 form (also known as FBAR).

Rod Lundquist,  BSA Senior Program Analyst at the IRS announced the policy guidance when asked about bitcoin during a webinar:
“At this time, FinCEN has said Bitcoin is not reportable on the FBAR, at least for this filing season.”
 - http://coindesk.com/irs-no-bitcoin-reporting-fincen-foreign-banking-tax-form

Now that still doesn't make clear if a Bitcoin exchange where you can have a cash balance (for buying bitcoins or for the proceeds after selling) is considered a financial institution.