It is now next to impossible to spend bitcoins legally if your american

[Robert Paulson]

Quoting from http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html

Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.

so now anyone who is taxable by the IRS and wants to buy something with bitcoin must check if he owes capital gains to the IRS.
land of the "free" indeed...

[1714051657]

1714051657

[1714051657]

1714051657

[Robert Paulson]

no one in their right mind is going to be using bitcoin as money when for every payment they must keep track of what the exchange rate was when they obtained bitcoins compared to the exchange rate now.
and then if its higher write it down to report later to the IRS as capital gains.

[RodeoX]

Quoting from http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html

Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.

so now anyone who is taxable by the IRS and wants to buy something with bitcoin must check if he owes capital gains to the IRS.
land of the "free" indeed...

Can you name me any transaction that would not be taxable? All commerce is taxable.

Your calculation is not quite complete. The only way you would owe $1 on your coffee is if you had realized a huge profit. You owe a percentage of your profits. Lets say it's 20% (it could be less or possibly more). So if you bought a bitcoin for $1 and then it rose in value to $5; you owe $1 in tax on the gains. That is still a 300% gain after taxes. I would definitely enjoy drinking that cup of coffee.

[cottoneyeJoe]

Next to impossible? Hardly...

A pain in the ass and outright theft, sure. But anyone residing in the US obviously accepts their tax burden, right?

I wish it were the case that residence mattered. The truth is that US is possibly the ONLY country that taxes it's citizens even when they live and earn all of their income abroad. Renouncing your citizenship costs ~$400 and even then does not release you from any unmet tax obligations or risk of audit from time during your citizenship.

Worse still, Americans abroad are increasingly being denied foreign bank accounts because of new reporting requirements that the US imposes on banks who accept US citizens as customers.

http://aaro.org/denied-bank-accounts

[counter]

  I don't care to discuss what they expect me to do as they make themselves exempt from taxes.  And when I say they I"m talking about the obscenely wealthy that pay little to no tax and try to push tighter tax laws on me the "little guy".  

[smooth]

https://bitcointalk.org/index.php?topic=531135

[Robert Paulson]

Quoting from http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html

Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.

so now anyone who is taxable by the IRS and wants to buy something with bitcoin must check if he owes capital gains to the IRS.
land of the "free" indeed...

Can you name me any transaction that would not be taxable? All commerce is taxable.

Your calculation is not quite complete. The only way you would owe $1 on your coffee is if you had realized a huge profit. You owe a percentage of your profits. Lets say it's 20% (it could be less or possibly more). So if you bought a bitcoin for $1 and then it rose in value to $5; you owe $1 in tax on the gains. That is still a 300% gain after taxes. I would definitely enjoy drinking that cup of coffee.

the amount of taxes needed to be paid is not the point.
its not reasonable to expect people to start looking up what the exchange rate was when they received their bitcoins just so they could buy a cup of coffee without breaking the law.

[IrishFutbol]

Quoting from http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html

Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.

so now anyone who is taxable by the IRS and wants to buy something with bitcoin must check if he owes capital gains to the IRS.
land of the "free" indeed...

Can you name me any transaction that would not be taxable? All commerce is taxable.

Your calculation is not quite complete. The only way you would owe $1 on your coffee is if you had realized a huge profit. You owe a percentage of your profits. Lets say it's 20% (it could be less or possibly more). So if you bought a bitcoin for $1 and then it rose in value to $5; you owe $1 in tax on the gains. That is still a 300% gain after taxes. I would definitely enjoy drinking that cup of coffee.

the amount of taxes needed to be paid is not the point.
its not reasonable to expect people to start looking up what the exchange rate was when they received their bitcoins just so they could buy a cup of coffee without breaking the law.

So BTC investors should be treated differently than other investors because of laziness?

[Beliathon]

A pain in the ass and outright theft, sure. But anyone residing in the US obviously accepts their tax burden, right?

Wrong.

[Robert Paulson]

https://bitcointalk.org/index.php?topic=531135

there is no way the IRS will allow people to avoid paying taxes using this trick.
if this really catches up i am sure they will clarify that the determining exchange rate for tax purposes is the median of all inputs or something of that sort.

[Robert Paulson]

Quoting from http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html

Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.

so now anyone who is taxable by the IRS and wants to buy something with bitcoin must check if he owes capital gains to the IRS.
land of the "free" indeed...

Can you name me any transaction that would not be taxable? All commerce is taxable.

Your calculation is not quite complete. The only way you would owe $1 on your coffee is if you had realized a huge profit. You owe a percentage of your profits. Lets say it's 20% (it could be less or possibly more). So if you bought a bitcoin for $1 and then it rose in value to $5; you owe $1 in tax on the gains. That is still a 300% gain after taxes. I would definitely enjoy drinking that cup of coffee.

the amount of taxes needed to be paid is not the point.
its not reasonable to expect people to start looking up what the exchange rate was when they received their bitcoins just so they could buy a cup of coffee without breaking the law.

So BTC investors should be treated differently than other investors because of laziness?

BTC investors should be treated the same as foreign currency investors.

[amspir]

Quoting from http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html

Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.

so now anyone who is taxable by the IRS and wants to buy something with bitcoin must check if he owes capital gains to the IRS.
land of the "free" indeed...

Pragmatically, there's not much to worry about if you are just buying coffee.  If you convert large amounts of bitcoin between fiat, then you would have to document this on your tax returns to match what your bank is reporting to the IRS.   i.e. you buy a 1 btc now at $600 then sell it later for $1200.   If you spend bitcoins in commerce, the merchant isn't required to report to the IRS unless it's over $600 a year.   It may be a hassle to comply with the law, but I suspect you might have a computer to help you with that.

[IrishFutbol]

Quoting from http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html

Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.

so now anyone who is taxable by the IRS and wants to buy something with bitcoin must check if he owes capital gains to the IRS.
land of the "free" indeed...

Can you name me any transaction that would not be taxable? All commerce is taxable.

Your calculation is not quite complete. The only way you would owe $1 on your coffee is if you had realized a huge profit. You owe a percentage of your profits. Lets say it's 20% (it could be less or possibly more). So if you bought a bitcoin for $1 and then it rose in value to $5; you owe $1 in tax on the gains. That is still a 300% gain after taxes. I would definitely enjoy drinking that cup of coffee.

the amount of taxes needed to be paid is not the point.
its not reasonable to expect people to start looking up what the exchange rate was when they received their bitcoins just so they could buy a cup of coffee without breaking the law.

So BTC investors should be treated differently than other investors because of laziness?

BTC investors should be treated the same as foreign currency investors.

Currently, the majority of BTC owners are investors.  If it becomes mainstream, then maybe change it, but for now the classification is correct.

[durrrr]

is there anyway for them to keep track of how much u originally bought the bitcoin for? i mean theres no way to prove if u bought for .01$ or 1200$ ? right?

[smooth]

https://bitcointalk.org/index.php?topic=531135

there is no way the IRS will allow people to avoid paying taxes using this trick.

It's not a trick and it doesn't "avoid" taxes as the post explains. You will still pay the same taxes, just not in the form of every $1 transaction being a taxable event.

if this really catches up i am sure they will clarify that the determining exchange rate for tax purposes is the median of all inputs or something of that sort.

So now you are arguing on the basis of what you think the IRS will do in the future, and you expect anyone to pay the slightest attention to your baseless speculation? Good luck with that.

Identifying lots on capital gains transactions has been done for decades in amounts totaling billions or more likely trillions of dollars (by institutional investors). Closing this non-loophope doesn't appear to be a high priority for the IRS.

Moreover, even if buying a cup of coffee became a taxable event, who cares? This is not 1970. We have this these things called computers, smartphones, etc. They are good at bookkeeping.

This thread is pointless.

[tins]

is there anyway for them to keep track of how much u originally bought the bitcoin for? i mean theres no way to prove if u bought for .01$ or 1200$ ? right?

That's what I was thinking. Say the IRS says anything about spending btc, then the person just says they bought in at $1200 and writes off the loss on their taxes.

[Robert Paulson]

https://bitcointalk.org/index.php?topic=531135

there is no way the IRS will allow people to avoid paying taxes using this trick.

It's not a trick and it doesn't "avoid" taxes as the post explains. You will still pay the same taxes, just not in the form of every $1 transaction being a taxable event.

if this really catches up i am sure they will clarify that the determining exchange rate for tax purposes is the median of all inputs or something of that sort.

So now you are arguing on the basis of what you think the IRS will do in the future, and you expect anyone to pay the slightest attention to your baseless speculation? Good luck with that.

Identifying lots on capital gains transactions has been done for decades in amounts totaling billions or more likely trillions of dollars (by institutional investors). Closing this non-loophope doesn't appear to be a high priority for the IRS.

Moreover, even if buying a cup of coffee became a taxable event, who cares? This is not 1970. We have this these things called computers, smartphones, etc. They are good at bookkeeping.

This thread is pointless.

no this thread is not pointless.
i don't have to keep track of any capital gains when i use fiat currency why should i do so with bitcoin.
this is a clear attempt by the government to make bitcoin unattractive to use as money.

[Peter R]

https://bitcointalk.org/index.php?topic=531135

there is no way the IRS will allow people to avoid paying taxes using this trick.
if this really catches up i am sure they will clarify that the determining exchange rate for tax purposes is the median of all inputs or something of that sort.

This is neither a trick nor a method to avoid paying taxes.  You would report the same amount of capital gains taxes either way, but this has the potential to significantly simplify accounting for all parties involved. 

[Bonio]

So would I be right in suggesting if you lost money with MTGOX it is tax deductable as a loss? Surely it has to work both ways?

[Robert Paulson]

https://bitcointalk.org/index.php?topic=531135

there is no way the IRS will allow people to avoid paying taxes using this trick.
if this really catches up i am sure they will clarify that the determining exchange rate for tax purposes is the median of all inputs or something of that sort.

This is neither a trick nor a method to avoid paying taxes.  You would report the same amount of capital gains taxes either way, but this has the potential to significantly simplify accounting for all parties involved. 

this requires that my wallet actually has enough bitcoins obtained when the exchange rate was lower.
the mere fact that people need to worry about the issue of reporting capital tax gains when buying things in a store is going to push people out of using bitcoin as money.