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

[zolace]

Bitcoin is not doomed,maybe taxing bitcoin is not as bad as it seams at the first sight.Once it get taxed people will be aware that is legal ,they will trust it more,buy it,make its value grow.

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[1713567843]

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[atp1916]

Bitcoin is not doomed,maybe taxing bitcoin is not as bad as it seams at the first sight.Once it get taxed people will be aware that is legal ,they will trust it more,buy it,make its value grow.

Correct, taxation is validation.  

More importantly, market players finally have a clear indication of what kind of beast they are dealing with.  As such, it is only a matter of time now before you see integration of Bitcoin payment protocol into their business models.   Clearly work must be done to iron out internal company tax compliance issues, but that is a far easier thing to stomach than paying hundreds of millions in fees a year to the current payment processing entities like mastercard, visa, amex etc.    Silicon Valley angel vc's are already investing millions into start-ups that provide solutions for all manners of Bitcoin protocol issues / applications.

With China out, out goes most of the speculation that has lead to nearly all the volatility of the price in the recent months.  The price straightens out...gets pegged at 750-825 where it should be at, people starting gaining confidence in the stability and then boom - people start buying stuff with bitcoins again.

Trust me, tax compliance services are well on their way to the market.

[Bit_Happy]

Thanks IRS!!! You Ass hats!
What is the highest tax rate on my Ass hat collection? 
I need to make my taxes easier.

[ebliever]

Are there any IRS requirements for Coinbase or our local banks to report to the IRS when we move funds in/out of Coinbase (or similar services)? I'm wondering how on earth the IRS is going to know you sold a bitcoin in the first place? Or how will they know that a bitcoin you've sold was bought at XXX price, or was it one of the coins you mined?

Moreover, if we mined it shouldn't we be able to deduct the cost of electricity and the cost of mining hardware? Like many altcoin miners I've spent a good deal more on my mining hardware than I'll ever get in mining revenue, so I don't see the justice in the IRS taxing my mining revenue as if it had a cost basis of 0.

Let's say I instead use my BTC to by a Gyft card and spend it at Walmart - is there any way the IRS can possibly learn about the Gyft card purchase and use currently? Because that's the route I'm thinking of taking for any BTC I do cash out. I still think the IRS is in for an accounting nightmare if they want to try to wade through all my penny-altcoin trades at a half dozen exchanges, etc.

[atp1916]

Are there any IRS requirements for Coinbase or our local banks to report to the IRS when we move funds in/out of Coinbase (or similar services)? I'm wondering how on earth the IRS is going to know you sold a bitcoin in the first place? Or how will they know that a bitcoin you've sold was bought at XXX price, or was it one of the coins you mined?

Moreover, if we mined it shouldn't we be able to deduct the cost of electricity and the cost of mining hardware? Like many altcoin miners I've spent a good deal more on my mining hardware than I'll ever get in mining revenue, so I don't see the justice in the IRS taxing my mining revenue as if it had a cost basis of 0.

Let's say I instead use my BTC to by a Gyft card and spend it at Walmart - is there any way the IRS can possibly learn about the Gyft card purchase and use currently? Because that's the route I'm thinking of taking for any BTC I do cash out. I still think the IRS is in for an accounting nightmare if they want to try to wade through all my penny-altcoin trades at a half dozen exchanges, etc.

Coinbase is registered with FINCEN, and FINCEN can send information to the IRS.

You can write off just about every single facet of your operation.

I am going to tabulate all of my hardware costs, electrical usage each month, my internet bill, my rent.. just about everything associated with mining.  I am certain that i am obligated for 0 tax burden.

[Beliathon]

I am going to tabulate all of my hardware costs, electrical usage each month, my internet bill, my rent.. just about everything associated with mining.  I am certain that i am obligated for 0 tax burden.

Don't forget about computer maintenance costs (hint: make it expensive)!

[aztecminer]

Are there any IRS requirements for Coinbase or our local banks to report to the IRS when we move funds in/out of Coinbase (or similar services)? I'm wondering how on earth the IRS is going to know you sold a bitcoin in the first place? Or how will they know that a bitcoin you've sold was bought at XXX price, or was it one of the coins you mined?

Moreover, if we mined it shouldn't we be able to deduct the cost of electricity and the cost of mining hardware? Like many altcoin miners I've spent a good deal more on my mining hardware than I'll ever get in mining revenue, so I don't see the justice in the IRS taxing my mining revenue as if it had a cost basis of 0.

Let's say I instead use my BTC to by a Gyft card and spend it at Walmart - is there any way the IRS can possibly learn about the Gyft card purchase and use currently? Because that's the route I'm thinking of taking for any BTC I do cash out. I still think the IRS is in for an accounting nightmare if they want to try to wade through all my penny-altcoin trades at a half dozen exchanges, etc.

Coinbase is registered with FINCEN, and FINCEN can send information to the IRS.

You can write off just about every single facet of your operation.

I am going to tabulate all of my hardware costs, electrical usage each month, my internet bill, my rent.. just about everything associated with mining.  I am certain that i am obligated for 0 tax burden.

ya should get a business license before april 15th us tax day and china bans bitcoin ..

[atp1916]

Are there any IRS requirements for Coinbase or our local banks to report to the IRS when we move funds in/out of Coinbase (or similar services)? I'm wondering how on earth the IRS is going to know you sold a bitcoin in the first place? Or how will they know that a bitcoin you've sold was bought at XXX price, or was it one of the coins you mined?

Moreover, if we mined it shouldn't we be able to deduct the cost of electricity and the cost of mining hardware? Like many altcoin miners I've spent a good deal more on my mining hardware than I'll ever get in mining revenue, so I don't see the justice in the IRS taxing my mining revenue as if it had a cost basis of 0.

Let's say I instead use my BTC to by a Gyft card and spend it at Walmart - is there any way the IRS can possibly learn about the Gyft card purchase and use currently? Because that's the route I'm thinking of taking for any BTC I do cash out. I still think the IRS is in for an accounting nightmare if they want to try to wade through all my penny-altcoin trades at a half dozen exchanges, etc.

Coinbase is registered with FINCEN, and FINCEN can send information to the IRS.

You can write off just about every single facet of your operation.

I am going to tabulate all of my hardware costs, electrical usage each month, my internet bill, my rent.. just about everything associated with mining.  I am certain that i am obligated for 0 tax burden.

ya should get a business license before april 15th us tax day and china bans bitcoin ..

Already did an LLC registered in Texas about a month ago: www.steeltidellc.com  

[J_Dubbs]

I am going to tabulate all of my hardware costs, electrical usage each month, my internet bill, my rent.. just about everything associated with mining.  I am certain that i am obligated for 0 tax burden.

Don't forget about computer maintenance costs (hint: make it expensive)!

Guys, bone up on the hobby/business laws. If you don't show a PROFIT for 3/5 years the IRS will categorize your business as a HOBBY. At that point you cannot write off expenses unless you are itemizing and there are restrictions on how much. Basically, once your business gets categorized as a hobby you get boxed in, and in either case you still need to account for the income. Right now it's almost impossible to not be projecting a loss for 2014, and those that started late in 2013 will have startup expenses that exceed mining revenue. So go ahead and tally all that stuff up, but when you show a loss it (a) increases your chances of being audited greatly and (b) puts you one step closer to having a hobby categorization.

In my opinion the IRS should not tax anything in a barter system, meaning if my mining and reinvestment into equipment is handled with all BTC it should have nothing to do with the IRS. With this the only things reportable would be taxable events, or the exchange of BTC for USD. Fantasy land, but I would have been much happier without having to account for capital gain/loss every time I buy a miner. It's really such bullshit because Bitcoin went from being convenient and fun, almost like a money simulation game, to the current state of accounting nightmare of spreadsheet madness. If I mine a Bitcoin and spend a Bitcoin the IRS wants me to pay them twice, but if I have a garden I only pay taxes when I sell the veggies, not when they grow. Bullshit, they really did ruin it, doing all my spreadsheets and meeting with an accountant confirmed this. Also, add up the hours doing all the math, and if you need to hire an accountant keep in mind they need to spend time on it and they get paid in dollars, not BTC.

[atp1916]

Hum, maybe i'll just pay the tax and not even bother.

[aztecminer]

Hum, maybe i'll just pay the tax and not even bother.

maybe you should stop mining ?? maybe that is what the us govy wants to accomplish is stop you and other americans from mining. if the us govy is taxing capital gains then they must think that bitcoin value will increase ?? or are they attempting to kill bitcoin ?? not sure if killing bitcoin is in their interest or not really since the us reserve dollar currency is on it's deathbed. i think what we have is a complex thing involving currency wars. in any case you still have two or three years to mine even if you don't make a profit ?? u could just give up the ghost and stiop mining ??

[atp1916]

Hum, maybe i'll just pay the tax and not even bother.

maybe you should stop mining ?? maybe that is what the us govy wants to accomplish is stop you and other americans from mining. if the us govy is taxing capital gains then they must think that bitcoin value will increase ?? or are they attempting to kill bitcoin ?? not sure if killing bitcoin is in their interest or not really since the us reserve dollar currency is on it's deathbed. i think what we have is a complex thing involving currency wars. in any case you still have two or three years to mine even if you don't make a profit ?? u could just give up the ghost and stiop mining ??

 

That is a rather..interesting... take on things. lol

[ZakCarter]

Well, trading bitcoin for land @ http://galtsgulchchile.com/ ...moving there and renouncing citizenship... might not be a bad idea! 

[zolace]

Other countries have already integrated exchanges with few, if any, complaints from users. As a US citizen, I must jump through all sorts of loops just to purchase bitcoin. I do understand that we want to close fraudulent pathways for criminals, but those exist in fiat as well.

Any USD bought with bitcoin should be reported in tax information. But I feel that bitcoin allows for an international community and working for BTC would be a different situation.

[mobile4ever]

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?

Exactly, the US is bankrupt.

[LostDutchman]

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?

Well, now, that all depends on how you go about it.

My $.02.

[bountygiver]

well you can always try to not associate your wallet with your identity.
No identity = they don't know who own the wallet = they don't know who to tax

For now you can profit from exchanging in other countries that doesn't tax it, but if bitcoin liquidity is higher you wouldn't need to exchange them which makes life easier too.

[Bit_Happy]

well you can always try to not associate your wallet with your identity.
No identity = they don't know who own the wallet = they don't know who to tax

For now you can profit from exchanging in other countries that doesn't tax it, but if bitcoin liquidity is higher you wouldn't need to exchange them which makes life easier too.

Still have to pay taxes on "barter income", which is what that would be called.

[sorryforthat]

How would something like this effect cloud mining.

Would Cex.io be the ones who automatically pull from the payout of what was mined on your behalf since they are the ones who technically own that miner? Or does it fall on us since we are the ones who "rent/own" the speed that solved that block. Now I read another reply that stated about claiming everything associated with that, I can see this as an advantage for companies like Cex.io to tax the miner (the owner of the Hash power) and then claim all the cost for a lower capital gains.

Is considered legal for a company to tax you and to not pass that tax to the IRS, since that tax is indeed not for profit of the company and if this would conflict with a claim by Cex.io for lower capital gains due to operational costs and in turn profiting from the tax they took from you.

Now considering the tax falls on us to pay, this would be an advantage since, you did pay into that speed which could be a deduction depending on how long it takes you to profit from your investment.

(This question applies to the purchase of Hash power aswell)

[ensarwyckven]

If there was a better kind of tax system in the US, that should-would include the IRS being replaced with a much better and fairly run Federal taxing agency. The IRS should Stop harassing the American people because of their use of Bitcoin !