Sucks for you, I guess. I'm reporting my capital gains, regardless. Hope that doesn't ruin the party for you insane lolbertarians. Hilarious link, btw. Content ftw!
Which country are you going to be reporting in? I'll be sure to avoid it until the backlash forces change.
I plan to pay my taxes on USD I have gained through Bitcoin (mining and trading)... I plan to just count the income into my bank account as what I made, and deduct the costs of buying BTC and mining them (electricity, equipment, etc.)... which my accountant feels should be reasonable and simple enough. My accountant doesn't share the opinion that the IRS wants to "stick it" to people dealing in Bitcoin, they ostensibly just want a reasonable and accurate calculation of profits made and taxes paid consistent with the law. And that where the law is unclear with respect to the new technology, that a reasonable best guess interpretation is made that doesn't blatantly skew toward not paying taxes.
Key word. Of course,
no examples have been made of those using new technologies such as BitTorrent. Attacking and punishing people for using a new technology instead of understanding it and creating a progressive environment is obviously the first step taken, because the middle-men would never fight progress to save themselves.
Government is the ultimate
middleman.
All in the name of "fairness" right? Do you think it would be worthwhile to keep all of your gains and make use of them as you see fit, or send them off to any number of governments that have proven more than willing to use
your funds to bail out banks and give habitual drug addicts their narcotics and provide tax-free salaries to politicians? What is "fair"?
Governments do good in early stages, when they're manageable. As people relegate more of their responsibilities to a central authority, it builds to a momentum that can no longer be controlled - it becomes destructive.
Anonymity is your first line of defense. Pointing the way to your assets just makes the tax-man's job that much easier.
This year, Bitcoin has been a windfall for me, and I can't really hide it (Bloomberg BusinessWeek sort of told the whole world)
As the tax year draws to a close, I have been deliberately incurring expenses which may or may not produce a profit in the end (such as producing physical bitcoins and offering software development bounties) to promote Bitcoin - which I believe I can legitimately deduct as business expenses because they are arguably expenses and efforts incurred to improve the value of BTC I have been holding.
This isn't directed toward you (in fact, I'm glad to see people making a profit), casascius, but the system itself. Do you see the absurdity? Intentionally taking actions that could produce losses, not for the purpose of progress but just to avoid penalty? What kind of
bureaucratic idiocy is that?
per my accountant, I am advised to BEWARE if I bought BTC earlier in the year, made a profit on it by selling it, bought BTC afterwards, and took a loss. In the US, according to him, if I don't sell those BTC by the end of the year to "Realize" the loss, AND keep my hands off them for 30 days, I run the risk of being on the hook for capital gains (which become taxable the moment it's sold for a gain) but not able to offset them with the losses (which only get realized if I sell AND DO NOT BUY THEM RIGHT BACK for 30 days). Instead the capital losses would roll forward from year to year, and I could deduct them later, but only against future capital gains, and/or up to $3,000 per income per year (which could be a long time, or never, if the gains are substantial). The 30 day rule is biased towards taxing gains: the government is apparently happy to take a piece of my "gains" unconditionally, but will only cut me a break on "losses" under relatively narrow conditions. Don't get stuck with a scenario where you have both gains and losses but the rules force you to pay on the gains without the benefit of offsetting the losses.
Once again: how many conditional variations and rules need to be taken into account just to be sure you're compliant? Which rule open a loophole and caused the problem that created this snowball effect in the first place? Why spend all this extra time figuring out what has to be done when you could just be doing what you're good at? What's the point of even paying someone else to maintain such a bureaucratic monstrosity with
your assets simply for the redistribution of
your funds to destinations without any decision from you? Isn't that taxation without representation?
It's not biased, it's to prevent a scam called "wash sales," where you constantly realize and accrue tax credits on downtrends, but only pay once on the uptrend.
Prevention of "wash sales" because of a deficiency in the tax code that created a loophole? What happens if an issue is found with the 30-day rule? Another piece of tax code intended to patch yet another hole in a mess that never had to exist initially? Why?
A peasant serf in the middle ages might have difficulty imagining a democratic republic, thinking the existing system was all that held society together. People today seem to reject the notion of independence and direct democracy, assuming that taxation and centralized government is inevitable. What seems an innocent law today can easily spin out of control, especially with authorities that have already proven their detachment from general society. The existing system
does hold the existing society together, but that doesn't mean individuals can't transcend the deranged aspects; many corporations already do. This is also how society evolves.
Keeping most of your BTC balance
in the Bitcoin system offers a good amount of protection even if reported. However, playing the authority's tax game is like playing poker against the house. The house
always wins in the end. If you're lucky or skilled, you won't go home broke; if you have a home left.
Internationalization using the information available from the links in my earlier post allows even the individual to put governments in their place - to make them
work for your money instead of just demanding and taking it. If the rules amount to theft, you can just say no; if they're conducive to reasonable investment, you can put your money to work in their jurisdiction.
It's very simple: look at governments as businesses that
need your investment to function. This is the difference between a business like the modern Microsoft (could be equated with Singapore) that provides products (Xbox, research division, etc) which are worthwhile and encourage your investment versus a business like Microsoft pre-Google (who else, the US) that relied on manipulative business practices to create high barriers to competition and foist a deficient product on its customer base, largely ignoring opposition.
If a government offers you a low tax rate or no taxation at all to put your wealth into its financial system, what's bad about that? When another government makes threats, demanding numerous taxes and concessions just for the
privilege of being associated with it, where's the benefit?
My overall point is that there is a choice between genuine freedom and an illusion. I'd rather be surrounded by free individuals who understand self-sufficiency and responsibility than those who give up everything and settle for
happiness in slavery because it's easier.
Now I'm going back to my post in front of the stock exchange to await a
rubber bullet to the face (
not really, it won't do much good until the
IRS is occupied).
