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Author Topic: Bitcoin is doomed. Thanks IRS!!! You Ass hats!  (Read 19220 times)
2tights
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March 27, 2014, 02:22:48 PM
 #1

http://www.theatlantic.com/technology/archive/2014/03/why-bitcoin-can-no-longer-work-as-a-virtual-currency-in-1-paragraph/359648/

I hate to admit it, but this story makes a lot of sense.

We can't legally trade BTC for BTC, we taxes at every level because its property not currency.....

Can someone please provide another, hopefully more positive, way to look at this?
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March 27, 2014, 02:34:19 PM
 #2

Step 1) Go to Germany.


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March 27, 2014, 02:38:47 PM
 #3

It's not illegal. That's good news.

Remember, the IRS only taxes Americans. There are 248 nations.

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March 27, 2014, 02:40:30 PM
 #4

Having bitcoin classified as property rather than currency is the best possible scenario.  The capital gains tax rate is 0% for most people.  0%... hard to beat that.

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March 27, 2014, 02:40:56 PM
 #5

It's not illegal. That's good news.

Remember, the IRS only taxes Americans. There are 248 nations.

But the USA is the richest nation on the planet...by quite some way. This will have a negative effect on Bitcoin.
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March 27, 2014, 02:46:59 PM
 #6

Bitcoin is tanking and that is totally understandable. If they can't track and tax it, they might ban it
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March 27, 2014, 02:47:33 PM
 #7

Bitcoin is tanking and that is totally understandable. If they can't track and tax it, they might ban it
A ban would be a bad mistake.


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March 27, 2014, 02:47:41 PM
 #8

Having bitcoin classified as property rather than currency is the best possible scenario.  The capital gains tax rate is 0% for most people.  0%... hard to beat that.
That is my rate this year. I was a little surprised and a lot happy. I pay dearly for the money I earn from working, but nothing this year for bitcoin. Thanks IRS, my 0% tax rate makes me 100% satisfied.

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March 27, 2014, 02:55:57 PM
 #9

http://www.theatlantic.com/technology/archive/2014/03/why-bitcoin-can-no-longer-work-as-a-virtual-currency-in-1-paragraph/359648/

I hate to admit it, but this story makes a lot of sense.

We can't legally trade BTC for BTC, we taxes at every level because its property not currency.....

Can someone please provide another, hopefully more positive, way to look at this?

Here's the problem with that analysis:  It assumes an extreme range of price of bitcoin.

Essentially, the IRS wants to capture the capital gains of speculators that buy early and cash out at much higher prices than they paid for it, as they would with any other speculative investment.

So there is a difference in fungibility if you have coins that you bought at $10, or $100 and trade at $600 or some future higher price.  That's a burden on speculators, and may slow down speculative investment.

However, if bitcoin is used as a currency -- that is, you hold amounts for a short time so you can trade, you won't see much in capital gains from the time you buy bitcoin at coinbase from your USD bank account to the time you spend it buying coffee.

We have the technology to add capital gains tracking to a wallet.   Computers are great at that kind of stuff.  At tax time, it would be as simple as printing out a 1099DIV-like form showing the capital gains/losses for the year based on all bitcoin transactions in the wallet and historical exchange data.  I suspect for most people using bitcoin as a currency rather than an investment are going to show not very significant gains, and it's lumped into that section on the tax return along with the small amount of dividends you might get from a money market account.

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March 27, 2014, 02:57:17 PM
 #10

It's not illegal. That's good news.

Remember, the IRS only taxes Americans. There are 248 nations.

But the USA is the richest nation on the planet...by quite some way. This will have a negative effect on Bitcoin.

LOL, which planet?Huh

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March 27, 2014, 02:57:22 PM
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In fact now that people and businesses know how to treat cryptocurrencies they will finally take the step to move in on it.
Many potential buyers have been waiting on the sideline for more regulation and guidance. Offer them a bargain and it will all be bought up, trigger a new bullmarket.

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March 27, 2014, 03:00:54 PM
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Show them you bought bitcoin at $1200 from some exchange, and now it's only worth $500 at coinbase. It's also worth $0 at Mt. Gox, the world's biggest exchange. The news talks about Mt. Gox as if it's the only exchange.

So I'm negative on capital gains. Will the IRS reimburse me?

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March 27, 2014, 03:03:47 PM
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They used a wrong name for the class of money where bitcoin is included. It is cryptomoney for chrissake. Nothing virtual here. Article can therefore not be evaluated. Move along.

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March 27, 2014, 03:08:59 PM
 #14

Having bitcoin classified as property rather than currency is the best possible scenario.  The capital gains tax rate is 0% for most people.  0%... hard to beat that.
That is my rate this year. I was a little surprised and a lot happy. I pay dearly for the money I earn from working, but nothing this year for bitcoin. Thanks IRS, my 0% tax rate makes me 100% satisfied.

Can you elaborate on this? How is it 0%?
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March 27, 2014, 03:11:33 PM
 #15

my 0% tax rate makes me 100% satisfied.

Step 1) Go to Germany.

See if you can get that in Germany.
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March 27, 2014, 03:12:21 PM
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Yea the IRS decision is pretty terrible for bitcoin

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March 27, 2014, 03:15:48 PM
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Seriously...did anyone actually believe somehow that if there were profits to be made from the investing in Bitcoin that they would not eventually be taxed?

That's a ridiculous notion to hold onto in my mind.

It was always eventually to be taxed as either a currency exchange or as as asset. Both introduce challenges in terms of record keeping...but actually treating it as a currency would likely be more complicated for most people and in many cases not nearly as advantageous financially when time comes to pay the tax.

This is after all an electronic "smart currency"...it seems to me that there will be electronic solutions to this problem which will make the necessary record keeping required for most Bitcoin users rather invisible.
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March 27, 2014, 03:18:04 PM
 #18

This is after all an electronic "smart currency"...it seems to me that there will be electronic solutions to this problem which will make the necessary record keeping required for most Bitcoin users rather invisible.
Oh yes. The same Silicon Valley companies who were overjoyed to sell their customers' privacy down the river will be rushing to solve this problem too.
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March 27, 2014, 03:24:43 PM
 #19

It's not illegal. That's good news.

Remember, the IRS only taxes Americans. There are 248 nations.

But the USA is the richest nation on the planet...by quite some way. This will have a negative effect on Bitcoin.


no the usa is not the richest country .. unle4ss u consider trillions in debt as rich .. or maybe u consider a dollar that is backed by debt is really money ?? or maybe you think that printing 80 billion a month for over a year makes the usa the richest country in the world ??

the only real money in this world is gold and silver. who has the gold and silver has the money. the dollar is now on it's deathbed. the fed started to taper not because our economy is better, but instead because the fed has 4 trillion of junk they bought from the big banks on their books with the free money they printed. the fed is now insolvent and cannot continue to print free money and buy another 4 trillion in junk. if they do keep printing then the usa citizens will be left holding a valueless currency.

the usa will need a replacement currency because the days of the dollar reserve currency is coming to an end. maybe bitcoin is in the works instead of a gold backed currency because maybe the usa does not have any gold left to back a currency ?? we don't know the answer to this question yet. to restore confidence in money a gold back currency will be required.. unless they can come up with something else. russia and china both banned bitcoin because they have been buying gold in massive quantities along with all the other SCO countries. they are preparing for a gold backed reserve currency .

regarding this IRS ruling one must wonder why they announced it three weeks before april 15th tax deadline Huh the reason is to limit the time for miners to apply and obtain a business license. you have until april 15th to obtain a business license to be able to writeoff your mining hardware, electric, office space, internet, etc, that you use to mine. therefore maximizing the IRS's money grab for at least another year. if you are going to mine bitcoin then apply for your business license today .
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March 27, 2014, 03:26:26 PM
 #20

In my mind this article is a much more accurate assessment of the implications of the IRS ruling:

http://www.nasdaq.com/article/3-reasons-the-irs-bitcoin-ruling-is-good-for-bitcoin-cm339333
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