Amph
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March 26, 2014, 11:34:55 AM |
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they can't know how much bitcoin i have, they search for every pc? lol
also it's impossible to track miner
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precrime3
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March 26, 2014, 11:52:53 AM |
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What does this mean regarding minor miner? How am I supposed to file self-employment taxes?
anyone?
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cdog
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March 26, 2014, 12:31:18 PM |
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1. Buy mining hardware which never ROIs
2. Write off losses
3. Profit???
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MinorError
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March 26, 2014, 12:42:23 PM |
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I like the way you guys are seeing things. I guess it's just the pessimist in me being negative Nancy...I really hope you're right. On a more selfish note, how should I, as a small time miner, keep track of my daily payouts? I'm open to any and all suggestions.
This is really good news and or complete death of alt coins. Nothing in between. Hoping it is good news. I have an accounting degree and I did my 2012 taxes based on just about exactly the rules they picked today. Pretty much the only correct method to do them. The business articles that mention this as a blow to miners are written for people that have no training in finance/accounting/tax law. All necessary evils in a civilized world. I agree that bitcoins had to be brought into the civilized world eventually for them to succeed. Anyone who thought they could be used under the tax radar forever was fooling themselves...but I also see a lot of the childish mentality on here of "how will they know how many bitcoins I have ROFL LOL OMG" etc. The thing in my mind that is a huge blow here is that it's treated as property and not currency. Because wasn't the point of Bitcoin to be treated as currency eventually? If it's treated as property it renders numerous amounts of small transactions by business on a day to day basis impossible.
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Foxpup
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March 26, 2014, 01:28:33 PM |
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Also, as a consumer, if you have 2 bitcoins in your wallet one day (let's say for simplicity sake you bought the. For $1 each) and then you go buy a cup of coffee for $2, but at the time of your purchase, your bitcoins doubled in value and are now worth $4 so you only need to spend one of them. Now in the eyes the government you just PROFITED $1.
So? You did profit $1. You started with a bitcoin worth $1, and exchanged it for a cup of coffee worth $2. Unless your accountant is skilled at bistromathics, $2 - $1 = $1 profit. For now at least, it is completely not feasible for any consumer to keep track of this. And you can say yes it's impossible to keep track of AND enforce....but the tax manwillnot give a fuck if they audit you. "You didn't keep diligent records on your bitcoin purchases and expenditures....fuck you, pay me."
Actually, it's impossible not to keep track of this. Your wallet software keeps track of all your transactions, so all you have to do is export it to a spreadsheet, email it to your accountant and let them figure it out. Simple (unless you're the accountant, but that's you get paid for).
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Will pretend to do unspeakable things (while actually eating a taco) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4I am not on the scammers' paradise known as Telegram! Do not believe anyone claiming to be me off-forum without a signed message from the above address! Accept no excuses and make no exceptions!
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ryanmnercer
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March 26, 2014, 02:03:36 PM |
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they can't know how much bitcoin i have, they search for every pc? lol
also it's impossible to track miner
Good luck with that if you plan on ever converting them to fiat.
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MinorError
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March 26, 2014, 02:08:25 PM |
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Also, as a consumer, if you have 2 bitcoins in your wallet one day (let's say for simplicity sake you bought the. For $1 each) and then you go buy a cup of coffee for $2, but at the time of your purchase, your bitcoins doubled in value and are now worth $4 so you only need to spend one of them. Now in the eyes the government you just PROFITED $1.
So? You did profit $1. You started with a bitcoin worth $1, and exchanged it for a cup of coffee worth $2. Unless your accountant is skilled at bistromathics, $2 - $1 = $1 profit. For now at least, it is completely not feasible for any consumer to keep track of this. And you can say yes it's impossible to keep track of AND enforce....but the tax manwillnot give a fuck if they audit you. "You didn't keep diligent records on your bitcoin purchases and expenditures....fuck you, pay me."
Actually, it's impossible not to keep track of this. Your wallet software keeps track of all your transactions, so all you have to do is export it to a spreadsheet, email it to your accountant and let them figure it out. Simple (unless you're the accountant, but that's you get paid for). Point taken, but this does not make using bitcoin easier or more attractive to either the consumer or the merchant. I thought bitcoin was supposed to eliminate the middleman? Seems to me it's becoming more complicated and therefore more middlemen/opportunities for middlemen will pop up. To be clear, I am NOT against the IRS taxing of bitcoin, but I think it should be treated as a foreign currency, not property. Maybe you can clear this up for me. Let's go back to the coffee analogy. Let's say one day I buy a bitcoin for $1. The next day I but a bitcoin for $2 because the worth has doubled. I now have 2 bitcoins worth $4, one has doubled in value but the other still has the same worth as what I bought it for. If I buy a coffee for $2 with one bitcoin, how do we know which bitcoin I used to buy the coffee? They are all in the same wallet. So essentially I have two bitcoins...one of them I would owe capital gains tax of $1 if I used it to buy the $2 coffee. The other bitcoin I would owe no capital gains tax on if I used that bitcoin. How is that determined? And I'm not being a dick...I really just don't understand how that would work.
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Sindelar1938
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March 26, 2014, 02:49:17 PM |
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The removal of uncertainty in the US was critical Great news actually
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h@shKraker (OP)
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March 26, 2014, 03:27:03 PM |
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MinorError,
In the US cash based accounting transactions assume FIFO for the currency / cash asset on the balance sheet.
H@shKraker
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MinorError
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March 26, 2014, 04:31:26 PM |
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MinorError,
In the US cash based accounting transactions assume FIFO for the currency / cash asset on the balance sheet.
H@shKraker
Can you put that in terms an idiot like me can understand?
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Bonam
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March 26, 2014, 05:21:12 PM |
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Maybe you can clear this up for me. Let's go back to the coffee analogy. Let's say one day I buy a bitcoin for $1. The next day I but a bitcoin for $2 because the worth has doubled. I now have 2 bitcoins worth $4, one has doubled in value but the other still has the same worth as what I bought it for. If I buy a coffee for $2 with one bitcoin, how do we know which bitcoin I used to buy the coffee? They are all in the same wallet. So essentially I have two bitcoins...one of them I would owe capital gains tax of $1 if I used it to buy the $2 coffee. The other bitcoin I would owe no capital gains tax on if I used that bitcoin. How is that determined? And I'm not being a dick...I really just don't understand how that would work.
Capital gains are based on the average cost. If you bought 1 bitcoin for $1, and 1 bitcoin for $2, you now have 2 bitcoins, that you bought for a total of $3 dollars. Therefore your average cost was $1.5 / bitcoin. So when you buy a coffee for $2 using 1 bitcoins, you should calculate that you only spent $1.5 to acquire that 1 bitcoin (on average), and therefore you made a $0.50 profit. Most investors used the above method, called the "average cost basis method", in their accounting of capital gains for stocks and such. You can also use the first in first out (FIFO) method. That means if you bought bitcoin for $1 first, and then later bought another bitcoin for $2, then later you bought something with 1 bitcoin, you would calculate your cost to acquire the bitcoin as $1 (since that was the first bitcoin into your wallet, it is the first bitcoin out of your wallet: hence "First in first out"). You can pick either the average cost basis method or the FIFO method in any given year, whichever is more tax advantageous for you.
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bobdutica
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March 26, 2014, 05:24:28 PM |
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MinorError,
In the US cash based accounting transactions assume FIFO for the currency / cash asset on the balance sheet.
H@shKraker
Can you put that in terms an idiot like me can understand? He means "First In, First Out". In other words, the first Bitcoin you spend is considered to be the first Bitcoin you purchased, the second Bitcoin you spend is considered to be the second Bitcoin you purchased, etc.
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Aseras
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March 26, 2014, 07:15:23 PM |
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I like the way you guys are seeing things. I guess it's just the pessimist in me being negative Nancy...I really hope you're right. On a more selfish note, how should I, as a small time miner, keep track of my daily payouts? I'm open to any and all suggestions.
look at blockchain info. it will tell you what the transaction was worth in usd at the time you made it. on what exchange? btc "value" is all over the charts, especially last year. if that's how you determine basis, well just tumble your coins by sending them to your own addresses every few days to keep the "basis" jumping about with the markets. what's going to happen is the IRS is going to try and say everyone's basis is 0 unless you can prove you paid X for whatever which is almost impossible.
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gentlemand
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March 26, 2014, 07:28:15 PM |
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The UK initially came out with some pretty stupid ideas about crypto taxation. After talking to folks they revised that to something more sensible. Perhaps the same will happen here.
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MinorError
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March 26, 2014, 07:28:42 PM |
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MinorError,
In the US cash based accounting transactions assume FIFO for the currency / cash asset on the balance sheet.
H@shKraker
Can you put that in terms an idiot like me can understand? He means "First In, First Out". In other words, the first Bitcoin you spend is considered to be the first Bitcoin you purchased, the second Bitcoin you spend is considered to be the second Bitcoin you purchased, etc. thank you sir.
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designfail
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March 26, 2014, 07:30:14 PM |
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1. Buy mining hardware which never ROIs
2. Write off losses
3. Profit???
Are we gonna see huge spike in prices of old usb miners (333Mh/s)? ![Grin](https://bitcointalk.org/Smileys/default/grin.gif)
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h@shKraker (OP)
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March 26, 2014, 07:55:06 PM |
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Bonam,
Oh yea ... you're right, avg cost basis is another viable calc method and one absolutely SHOULD use it if that's the one that has the tax advantage. Guess this is why my wife is the CPA in the family.
H@shkraker
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MinorError
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March 26, 2014, 08:47:42 PM |
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Maybe you can clear this up for me. Let's go back to the coffee analogy. Let's say one day I buy a bitcoin for $1. The next day I but a bitcoin for $2 because the worth has doubled. I now have 2 bitcoins worth $4, one has doubled in value but the other still has the same worth as what I bought it for. If I buy a coffee for $2 with one bitcoin, how do we know which bitcoin I used to buy the coffee? They are all in the same wallet. So essentially I have two bitcoins...one of them I would owe capital gains tax of $1 if I used it to buy the $2 coffee. The other bitcoin I would owe no capital gains tax on if I used that bitcoin. How is that determined? And I'm not being a dick...I really just don't understand how that would work.
Capital gains are based on the average cost. If you bought 1 bitcoin for $1, and 1 bitcoin for $2, you now have 2 bitcoins, that you bought for a total of $3 dollars. Therefore your average cost was $1.5 / bitcoin. So when you buy a coffee for $2 using 1 bitcoins, you should calculate that you only spent $1.5 to acquire that 1 bitcoin (on average), and therefore you made a $0.50 profit. Most investors used the above method, called the "average cost basis method", in their accounting of capital gains for stocks and such. You can also use the first in first out (FIFO) method. That means if you bought bitcoin for $1 first, and then later bought another bitcoin for $2, then later you bought something with 1 bitcoin, you would calculate your cost to acquire the bitcoin as $1 (since that was the first bitcoin into your wallet, it is the first bitcoin out of your wallet: hence "First in first out"). You can pick either the average cost basis method or the FIFO method in any given year, whichever is more tax advantageous for you. Thanks so much for clearing that up. This is why I ask questions!
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zzojar
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March 26, 2014, 11:40:29 PM |
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So does this mean we'll be taxed on alternative currencies too, or only if we sell them for bitcoin?
My guess is that a bitcoin tax will only promote an increase in altcoin usage (assuming it is only btc that will be taxed). Time to buy more litecoin!
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ryanmnercer
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March 26, 2014, 11:42:34 PM |
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So does this mean we'll be taxed on alternative currencies too, or only if we sell them for bitcoin?
My guess is that a bitcoin tax will only promote an increase in altcoin usage (assuming it is only btc that will be taxed). Time to buy more litecoin!
It's not a bitcoin tax. It applies to ALL cryptocurrencies.
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