Bitcoin is doomed. Thanks IRS!!! You Ass hats!

[gustav]

if you happen to make a lot on trading or mining you pretty much have to leave the states now.

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[rpietila]

I also don't consider this to be anything spectacular and in no way detrimental to Bitcoin. It is just this time because price is down and people panicking which makes the conversation tense.

[HCLivess]

China will crash you

[Beliathon]

OP = clueless frightened speculating poorper, who was praying for a get-rich-quick scheme, and is now panicking because it's taking longer than they thought.

[Beliathon]

if bitcoin dies then what other alternative does the usa have to replace the dying dollar reserve currency ??

If Bitcoin dies, America is fucked. FUBAR. Bankrupt. Dead country walking.

https://www.youtube.com/watch?v=dQdmsL147j0

Cryptocurrency is literally the only hope for Americans today.

[RodeoX]

I don't get why everyone is incensed by this tax? Of all the unfair taxes you pay, all the unholy rules to keep you (the little man) out of markets, why are you complaining about capitol gains? Those are rich guy taxes. You pay more on the money you earn from hard work than capitol gains. Now if your problem is with how the tax money is spent, then I understand your grief. But this is about the best ruling we could hope for.

[Dafar]

I also don't consider this to be anything spectacular and in no way detrimental to Bitcoin. It is just this time because price is down and people panicking which makes the conversation tense.

+1

[newguy05]

I read a few pages of this thread, and it is obvious most of you have no idea what this actually means.

To give a simple example, it's basically equivalents to require a business (walmart, amazon or mom&pop) OR an individual to file and report EVERY SINGLE bitcoin transaction - what you earned and spent, on schedule D etc.. for capital gain consideration. So if got my paycheck that is 10BTC, spend 0.05BTC on milk, 1BTC on xbox, etc.. i must file each line item detailing the cost basis (usd/btc when i obtained the 10 bitcoin paycheck) and gain/loss (usd/btc) when i spent the said 0.05BTC for milk, xbox etc..

Obviously that can never function.

It effectively in 1 fell swoop destroyed bitcoin as a unit of currency(that can be used for goods/services) in the USA, AND ensures the dollar will never be replaced or lowered in the foodchain.

I guaranteed you companies like overstock and tigerdirect are now having a facepalm moment, consulting their tax attorneys on how to report this mess on their taxes.

It is bad, it removes the main function of bitcoin - as a currency.  Now bitcoin can only be used as a store of value like precious metals, but that only work if people still perceive it has value.  

If you are nervous, you should be. How this all unfolds in the next 12 month will have a material impact on bitcoin and crypto currency as a whole.

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.

no it's not the best possible scenario, what have you been smoking exactly?

[Peter R]

File and report EVERY SINGLE bitcoin transaction...Obviously that can never function.

Check out the concept of ZGL wallets and coins here: https://bitcointalk.org/index.php?topic=531135.0

This guidance was a positive as it gives clarity to larger players interested in entering the bitcoin space.

[nazban]

One thing that tells you this article is point blank retarded...

They talk about taxing each bitcoin you have differently based on how much it was when you bought it etc. There is no way of tracking this and this is not how the taxes work. If you trade BTC for BTC you don't get taxed. If you spend BTC for services and goods there is NO TAX.

If you cash out 1 million dollars worth of BTC to USD you better believe you need to pay taxes and if you think you did not have to do this before the IRS announcement you don't make shit in the first place so don't worry about it.

[newguy05]

File and report EVERY SINGLE bitcoin transaction...Obviously that can never function.

Check out the concept of ZGL wallets and coins here: https://bitcointalk.org/index.php?topic=531135.0

This guidance was a positive as it gives clarity to larger players interested in entering the bitcoin space.

while the concept behind is well intentioned and similar to what your stock broker does.  what we are discussing here is bitcoin as a CURRENCY (not a commodity that trades on the exchanges).

What that means is using it to buy milk down the street, and retails accepting it and give you milk. That was the goal of bitcoin ultimately and what all those payment processors like bitpay is build for.  

This IRS ruling essentially kill it in usa. It's the same as reporting every single penny you earned and spent as capital gains on your form. No business nor individual will accept that, that's why you dont see gold/silver coins/bars accepted as payment in walmart/target.  

There is unfortunately no way around this, unless IRS changes the ruling.

[newguy05]

One thing that tells you this article is point blank retarded...

They talk about taxing each bitcoin you have differently based on how much it was when you bought it etc. There is no way of tracking this and this is not how the taxes work. If you trade BTC for BTC you don't get taxed. If you spend BTC for services and goods there is NO TAX.

If you cash out 1 million dollars worth of BTC to USD you better believe you need to pay taxes and if you think you did not have to do this before the IRS announcement you don't make shit in the first place so don't worry about it.

you buy 10 shares of apple stock $700, then bought 10 more shares at $400.  You sell 15 shares of apple stock at $600, then bought 15 shares again at $500 later. Guess what?  they are tracked EXACTLY like that.  You need to figure out your cost basis individually even if it's the same stock.

This is what the IRS ruling does to bitcoins, you need a better understanding before calling the article retarded.

[Peter R]

File and report EVERY SINGLE bitcoin transaction...Obviously that can never function.

Check out the concept of ZGL wallets and coins here: https://bitcointalk.org/index.php?topic=531135.0

This guidance was a positive as it gives clarity to larger players interested in entering the bitcoin space.

...There is unfortunately no way around this, unless IRS changes the ruling.

No way around what?  Did you read the thread?  ZGL wallets (once available) would be an effortless way to ensure compliance with US tax laws should you choose to report to the IRS.  What are you suggesting is the problem with the concept?  The guidance that bitcoin is property seems actually helpful.  

[designfail]

Doomed..

Pretty sure if BTC some how crashed to $1... this forum would buy all BTC out there.  BTC is just stopping for fuel.

there are trolls from both sides.. I remember there were screams like "if it drops to $750, I will be buying if there is no tomorrow"..
..sorry, no offense.. just to make sure newcomers are not overwhelmed by reading "btc will hit 5K+ by the end of 2014 - that's for sure"..

[newguy05]

File and report EVERY SINGLE bitcoin transaction...Obviously that can never function.

Check out the concept of ZGL wallets and coins here: https://bitcointalk.org/index.php?topic=531135.0

This guidance was a positive as it gives clarity to larger players interested in entering the bitcoin space.

...There is unfortunately no way around this, unless IRS changes the ruling.

No way around what?  Did you read the thread?  ZGL wallets (once available) would be an effortless way to ensure compliance with US tax laws should you choose to report to the IRS.  What are you suggesting is the problem with the concept?  The guidance that bitcoin is property seems actually helpful.  

it's just an automated way of reporting your gain/loss and best effort algorithm to match cost basis = sale price. that's been used for decades in the financial market as a way to simplify tax reportings.

Again we are talking about bitcoin as a currency, it doesnt change the fact every single transaction - buy coffer, buy milk, buy toilet paper will need to be reported to irs.  Then you look from the business side what they have to report.

It's just not feasible nor practical. For a currency to work, 1 unit of value needs to always equal 1 unit of value, you cannot apply gain/loss to it - fungibility is destroyed by irs hence the function as a currency is destroyed.

[Peter R]

File and report EVERY SINGLE bitcoin transaction...Obviously that can never function.

Check out the concept of ZGL wallets and coins here: https://bitcointalk.org/index.php?topic=531135.0

This guidance was a positive as it gives clarity to larger players interested in entering the bitcoin space.

...There is unfortunately no way around this, unless IRS changes the ruling.

No way around what?  Did you read the thread?  ZGL wallets (once available) would be an effortless way to ensure compliance with US tax laws should you choose to report to the IRS.  What are you suggesting is the problem with the concept?  The guidance that bitcoin is property seems actually helpful.  

it's just an automated way of reporting your gain/loss and best effort algorithm to match cost basis = sale price. that's been used for decades in the financial market as a way to simplify tax reportings.

Yes.  It makes it very easy to comply with US tax law regardless of how many transactions you make.

We still have not received clarity on which transactions should voluntarily be reported.  There is a strong argument that transactions that result in a loss (or at least no gain) do not need to be reported.  Otherwise, we'd be required to report to the IRS every second-hand item we sell on Craigslist.  

ZGL works regardless of the reporting requirements, although you have better privacy if you only report the swaps where you realized a gain.

[J_Dubbs]

I read a few pages of this thread, and it is obvious most of you have no idea what this actually means.

To give a simple example, it's basically equivalents to require a business (walmart, amazon or mom&pop) OR an individual to file and report EVERY SINGLE bitcoin transaction - what you earned and spent, on schedule D etc.. for capital gain consideration. So if got my paycheck that is 10BTC, spend 0.05BTC on milk, 1BTC on xbox, etc.. i must file each line item detailing the cost basis (usd/btc when i obtained the 10 bitcoin paycheck) and gain/loss (usd/btc) when i spent the said 0.05BTC for milk, xbox etc..

Obviously that can never function.

It effectively in 1 fell swoop destroyed bitcoin as a unit of currency(that can be used for goods/services) in the USA, AND ensures the dollar will never be replaced or lowered in the foodchain.

I guaranteed you companies like overstock and tigerdirect are now having a facepalm moment, consulting their tax attorneys on how to report this mess on their taxes.

It is bad, it removes the main function of bitcoin - as a currency.  Now bitcoin can only be used as a store of value like precious metals, but that only work if people still perceive it has value.  

If you are nervous, you should be. How this all unfolds in the next 12 month will have a material impact on bitcoin and crypto currency as a whole.

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.

no it's not the best possible scenario, what have you been smoking exactly?

At first your tone threw me off, but yes, agree completely that Bitcoin is basically a huge pain in the ass to mine and spend. All this reporting adds costs to my CPA's billable hours too, nevermind the work I had to put in on spreadsheets. Feels like the fun got sucked right out of BTC.

[Alley]

Average Joes are not going to have to track all there btc spending.  IRS has no way of tying you to a anonymous bitcoin address.  Nor do they want to waste time on it.  Pull your head out of your ass.

[cryptoanarchist]

Average Joes are not going to have go track all there btc spending.  IRS has no way of tying you to a anonymous bitcoin address.  Nor do they want to waste time on it.  Pull your head out of your ass.

lol...glad to see some signs of intelligence on here.

[J_Dubbs]

Average Joes are not going to have to track all there btc spending.  IRS has no way of tying you to a anonymous bitcoin address.  Nor do they want to waste time on it.  Pull your head out of your ass.

This is actually my personal feeling as well, unfortunately all the paranoia spread and I'm going to make an attempt to be legit. I already regret my decision fwiw. Time and money on CPA to work on this, my own time building spreadsheets, really a crap deal.