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Author Topic: An obvious question I don't see asked anywhere  (Read 2020 times)
fisharmor
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July 21, 2010, 07:35:34 PM
 #1

So, I'm installing this as soon as I get home, but here's the obvious question:
If I use bitcoin in the US for transactions where I procure or sell goods or services, how will I stay out of prison?
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Quantumplation
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July 21, 2010, 07:37:03 PM
 #2

It's not a recognized currency, and thus must not be marked as income.  However, once you trade from bitcoins to USD, you must declare it as income.

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fisharmor
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July 21, 2010, 07:44:28 PM
 #3

Everything I find on barter says that the IRS considers barter income to be taxable, and not reporting it is tax evasion.
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July 21, 2010, 07:47:44 PM
 #4

So, you report it as income when you receive it.

Just as you do when you sell something on e-bay and on craigslist.

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Quantumplation
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July 21, 2010, 07:52:52 PM
 #5

Ah, didn't know that.  Good thing I don't need to pay taxes yet. ^.^

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fisharmor
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July 21, 2010, 07:58:59 PM
 #6

So, you report it as income when you receive it.

Just as you do when you sell something on e-bay and on craigslist.

Yeah.... just like when I do that.... which I do every time I sell something on craigslist....

I read a short time ago on the IRS website that hobby income is not taxable unless you make a profit at it.  But that's neither here nor there: I don't think anyone's fooling themselves about how serious the fedgov is about non-dollar denominated transactions... particularly not those who know who Robert Kahre is.
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July 21, 2010, 09:38:35 PM
 #7

Hobbies generally cost money. If you're making money, it's work.

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July 21, 2010, 09:51:51 PM
 #8

Well, let's see here.  We pay ~1 E+4 USD per year in cash to various people for cleaning, home repair, lawn care and so on.  I strongly suspect that they don't declare that income.  Multiply that by ~114 E+6 US households, and you get ~1 E+12 USD per year.  That's about 10% of estimated 2010 US personal consumption expenditures -- 10.4 E+12 USD per year, according to the US Bureau of Economic Analysis.  Even discounting for honesty, that's a large share.  And we in the US are probably more honest about such matters than most, yes?  China?  India?
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