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Author Topic: Bitcoin is doomed. Thanks IRS!!! You Ass hats!  (Read 19219 times)
cdog
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March 28, 2014, 02:37:10 PM
 #101

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

America is the greatest country in the history of the world.. not Tongue
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

You can measure it however you want. Yes, Im sure in Luxemburg, Frosted Flakes are covered in 90% Bolivian cocaine and the roads are paved with the evaporated tears of the proletariat.

Im quite sure its wonderful there. But when having these discussions, its also important to acknowledge reality. And the reality is, we have most of the "money." (lol)

In fact, our "money" is how other countries denominate and measure their own currencies, products and services... because:

While we dont make anything, we sure as hell like to buy stuff. And as long as we are the biggest buyers, our skin in this game is worth the most.

"You will now be returned to your normal program of FUD and Loathing in Las Taxvegas"


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Peter R
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March 28, 2014, 02:53:46 PM
 #102


I can be corrected on this one, in case I misunderstood something, but the entire discussion in here seems to miss one point:

The IRS decision (guidance?) applies to capital *gains*, i.e. the difference in value per unit at time of buying said unit vs. selling it. Correct so far?

If, at some point in the future, BTC/USD more or less stabilizes, the problem disappears (or at least become negligible, except for very large amounts traded).


tl;dr This decision might hurt current speculative value, but it doesn't really harm BTC functionality assuming a more stable exchange rate in the future.


Also, if you made 3,000 bitcoin purchases over the course of the year, and each one had exactly zero capital gain or loss, from my preliminary research it appears that you are required to not report this.  (However, you should keep private records.)  

If you do report 3,000 day-to-day transactions where each one has exactly zero gain, then it could be interpreted as a "frivolous filing" and you would be fined $5,000 by the IRS as per the Frivolous Filing Fine.  

Check out the ZGL wallet here: https://bitcointalk.org/index.php?topic=531135.0

This is not legal advice.  IANAL.  



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Peter R
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March 28, 2014, 03:09:58 PM
 #103

Here in Canada we have what are known as Tax-Free Savings Accounts (TFSA).  Money and investments placed in a TFSA can grow tax free (interest, dividends capital gains).  You are free to pull money out of your TFSA at any point in time, but you can't put it back in until the next tax year.  Each year we get $5,500 more room in our TFSA.

If you have $25,000 of room in your TFSA and place $25,000 of stock in it, and if this stock reaches $250,000, then you can sell the stock and use the money tax free (i.e., you do NOT have to pay capital gains tax).  The interesting thing is that from this point on, the room in your TFSA remains at $250,000.  The TFSA will slowly phase-out capital gains tax on financial products in Canada for many people.

With the recent tax clarification, I expect to see innovative companies offer registered bitcoin investments for TFSAs and RRSPs (Canada) and 401Ks and Roth IRAs (USA).  

I think this would be quite helpful.  



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Robert Paulson
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March 28, 2014, 03:49:11 PM
 #104

o but wait... i can't... i first need to check what the freakin exchange rate was when i got my bitcoins compare it to today's and then write down to report my capital gains to the IRS...

Writing it down because your bitcoin wallet is broken?  Keeping a record because it's impossible to consult the blockchain later?

If you're smart enough to transact bitcoins, I really don't get how you could be too stupid to run your wallet through a TurboTax-Bitcoin app at tax time.


or i can pay with fiat and not have to consult with anything.

Bullshit. You've already paid taxes on that fiat or you will come tax day.

I think his point is that people won't bother, they'll just put a hand in their pocket as they always have and buy the coffee with cash.
Anything that complicates a bitcoin transaction in any way reduces the likelihood of normal people or businesses adopting it.

Why would that cafe even bother with bitcoin and add something else to their paperwork when everyone already has a simple and trusted way to pay them?

Not everyone is into crypto, the majority have no idea what the fuck it is yet, they just want something to buy that coffee with and anything new needs to be an improvement on what they know. They don't give a shit about economics or governments or the future...they elected the morons who run our countries.

I'm wondering who's going to be splashing out on thousands in mining gear when the returns aren't there anymore. Most rigs won't break even at the rate we have now. People with 10k rigs on order must be gutted.

Well... maybe Bitcoin's best use case has nothing to do with buying a $0.99 cup of coffee!

Let the "morons" you speak of keep their fiat! I don't care if they live their entire lives as debt slaves.

If bitcoin fails to get those "morons" on board bitcoin will not be used or accepted by almost anyone and thus become valueless and useless.
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March 28, 2014, 03:54:46 PM
 #105

If bitcoin fails to get those "morons" on board bitcoin will not be used or accepted by almost anyone and thus become valueless and useless.

No, it won't. You see, Bitcoin has utility beyond "daily spending". I don't really understand why that is so hard for you to comprehend.

i can't think of anything bitcoin does better than fiat besides buying drugs on silkroad.
anything else i can do more easily with a credit card.
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March 28, 2014, 03:57:05 PM
 #106

I feel bad for the miners but for anyone else you could sell your bitcoin for cash, they cant tax cash exchange.

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March 28, 2014, 04:11:05 PM
 #107

Actually I think this is very positive, since it defined digital property first time in human history. Bitcoin is the first non-duplicatable digital property, and since it is half anonymous and can move oversea in seconds, the taxation need a whole new set of rules, or simply becomes impractical

domain names aren't digital property?
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March 28, 2014, 04:11:48 PM
 #108

I feel bad for the miners but for anyone else you could sell your bitcoin for cash, they cant tax cash exchange.

Yes, it is... I think you're saying they can't enforce it, right?
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March 28, 2014, 04:40:35 PM
 #109

If bitcoin fails to get those "morons" on board bitcoin will not be used or accepted by almost anyone and thus become valueless and useless.

No, it won't. You see, Bitcoin has utility beyond "daily spending". I don't really understand why that is so hard for you to comprehend.

i can't think of anything bitcoin does better than fiat besides buying drugs on silkroad.
anything else i can do more easily with a credit card.

Well, you aren't thinking hard enough.

It's an asset that is solely under the control of the private key holder.

If you can't see the ramifications of that, then perhaps Bitcoin isn't for you.

word.

also to those saying they are "happy to pay tax":

I have just introduced a global taxation myself, the taxation scheme is set up so that I can fund my efforts to make the world a better place, as such: all Bitcoin holders MUST send me 1% of their total holdings to this address, payments MUST be made annually.

1JQb5ds6VAY8LcQiBPwBuUjSrawW9k98nA

Pay the tax and be happy. Oh what's that you say "why the fuck should I pay you?"... yeah, now you're getting it.

I have nothing against paying toward utilities I use, refuse collection, road mantainence etc. but to be taxed on your wealth seems a little shit, especially when you realise those with all the gold pay virtually zero tax, they didn't get rich paying taxes, believe me!




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Robert Paulson
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March 28, 2014, 04:41:20 PM
 #110

If bitcoin fails to get those "morons" on board bitcoin will not be used or accepted by almost anyone and thus become valueless and useless.

No, it won't. You see, Bitcoin has utility beyond "daily spending". I don't really understand why that is so hard for you to comprehend.

i can't think of anything bitcoin does better than fiat besides buying drugs on silkroad.
anything else i can do more easily with a credit card.

Well, you aren't thinking hard enough.

It's an asset that is solely under the control of the private key holder.

If you can't see the ramifications of that, then perhaps Bitcoin isn't for you.

its a bunch of binary data replicated worldwide.
bitcoin is not an asset if no one uses it as a currency.
chuckscap
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March 28, 2014, 04:50:57 PM
 #111

The U.S. Government was not going to embrace bitcoin as a currency.  Given that there were only two options.  1.  Figure out how to tax it.   2. Make it illegal.    They are taxing bitcoins like gold.  If you mine gold and keep it under your cabin floor in sacks (or mine bitcoin and keep it in your wallet) when you cash it in, you have to pay income tax (not capital gains) on the amount you cashed in.   If you trade and make a profit, you need to keep track of your losses and gains and pay capital gains tax on any net profit for the year, just as if you were trading in gold, wheat or any other commodity.   Sales tax for internet sales should be the same as it is today.   Most internet purchases don't impose sales tax, it will be the same for those taking bitcoin.   

Overall, given the option to ban it by the U.S. or tax it, I prefer the latter.

Regards,

Chuck
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March 28, 2014, 04:54:20 PM
 #112

Yeah "doomed". Shut up and piss off.


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March 28, 2014, 04:58:04 PM
 #113

If bitcoin fails to get those "morons" on board bitcoin will not be used or accepted by almost anyone and thus become valueless and useless.

No, it won't. You see, Bitcoin has utility beyond "daily spending". I don't really understand why that is so hard for you to comprehend.

i can't think of anything bitcoin does better than fiat besides buying drugs on silkroad.
anything else i can do more easily with a credit card.

Well, you aren't thinking hard enough.

It's an asset that is solely under the control of the private key holder.

If you can't see the ramifications of that, then perhaps Bitcoin isn't for you.

its a bunch of binary data replicated worldwide.
bitcoin is not an asset if no one uses it as a currency.

The 'replicated worldwide' is exactly what give BTC it's value to me.

If the data is replicated only among organizations which can be pressured by the government and/or mis-use the intelligence data coming off the system (e.g., Google, Facebook, etc) or used in significant quantities by organizations who can be pressured to damage fungibility (e.g., Overstock, TigerDirect, etc) then I consider this a viable attack surface and a legitimate threat to the value I see in Bitcoin.

This is no idle conjecture or threat in my case.  It has been a very real factor in my decision making processes in deciding how to draw down my hoard.  (There are other factors also, to be fair.  Among them, I obtained my hoard in the first place intending to re-distribute it when there was less of an excess BTC liquidity problem.  At a profit, of course, but also as a legitimate contribution to the ecosystem.)


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March 28, 2014, 05:01:18 PM
 #114

Step 1) Go to Germany.

Step 2) buy bitcoins and profit Tongue
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March 28, 2014, 07:59:24 PM
 #115

Trend and price before 1 month:


Trend and price today:


See you again within a month with trend lines and current price.

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March 28, 2014, 08:07:19 PM
 #116

If the IRS wants to make taxing Bitcoin a pain, then they are going the wrong way, a lot of Americans will still be using Bitcoin and the IRS will just make it harder on themselves to collect any sort of taxes. Trust me, Bitcoin isn't doomed, but the quicker the governments get on the train and accept Bitcoin for what it is, the quicker they will have any chance for it to be more regulated to a point they would prefer.

Use my referral link if you want: https://primedice.com/?ref=Crazynoggin
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March 28, 2014, 08:22:05 PM
 #117

If bitcoin fails to get those "morons" on board bitcoin will not be used or accepted by almost anyone and thus become valueless and useless.

No, it won't. You see, Bitcoin has utility beyond "daily spending". I don't really understand why that is so hard for you to comprehend.

i can't think of anything bitcoin does better than fiat besides buying drugs on silkroad.
anything else i can do more easily with a credit card.

Well, you aren't thinking hard enough.

It's an asset that is solely under the control of the private key holder.

If you can't see the ramifications of that, then perhaps Bitcoin isn't for you.

its a bunch of binary data replicated worldwide.
bitcoin is not an asset if no one uses it as a currency.

There are plenty of assets that aren't used as a currency. I would even go so far as to say that most assets are not used as a currency. This conversation is getting tiresome.

other assets have value because they are useful.
gold is useful as jewelry and in electronics.
houses are useful because you can live in them.
bitcoin is only useful if its used as currency - no adoption - no value.
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March 28, 2014, 08:27:41 PM
 #118

Doomed..

Pretty sure if BTC some how crashed to $1... this forum would buy all BTC out there.  BTC is just stopping for fuel.
Robert Paulson
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March 28, 2014, 08:28:14 PM
 #119

bitcoin is only useful if its used as currency - no adoption - no value.

Hey, if you keep saying it, it might be true.

Apparently, it's only useful to you if it's used as a currency. That isn't true for me. So, either I am a lone crazy person, or there is some merit to what I am saying. Either way, it's clear you won't be convinced.

just out of curiosity, how is bitcoin useful to you (or anyone else for that matter) if you can't buy anything with it.
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March 28, 2014, 08:40:22 PM
 #120

just out of curiosity, how is bitcoin useful to you (or anyone else for that matter) if you can't buy anything with it.

I'm pretty sure I just bought something…

Hey, you can now pay for hotels all over the world with bitcoin!!  Check out http://www.gyft.com/merchants/global-hotel-card/.  Vinnie is doing good things at Gyft. 

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