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Author Topic: Bitcoin is hardly "doomed" because of the IRS ruling  (Read 3460 times)
s_s
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March 27, 2014, 03:33:25 PM
 #1

There was ALWAYS destined to be tax implications to investing and transacting in Bitcoin if it was a technology that truly had sufficient utility to survive.

Here in my mind is a rather good statement of why the current actions of the IRS is actually a positive advancement for Bitcoin.

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

Record keeping is going to add certain complexities...but it seems to be that was almost always destined to be the case regardless of how taxation was ultimately chosen to be handled.

Somehow it doesn't seem to me that the necessary record keeping can't eventually be handled with a bit of code.
There are several different types of Bitcoin clients. Hybrid server-assisted clients like Electrum get a lot of their network information from centralized servers, but they also check the server's results using blockchain header data. This is perhaps somewhat more secure than either server-assisted clients or header-only clients.
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March 27, 2014, 03:56:46 PM
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Good article and agree with 2 of his 3 points.

Now on to FinCEN vs. IRS....

Robert Paulson
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March 27, 2014, 04:00:17 PM
 #3

there are no taxes or book keeping a person has to do to buy things with fiat money.
why would anyone choose to use bitcoin now.
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March 27, 2014, 04:14:25 PM
 #4

There was ALWAYS destined to be tax implications to investing and transacting in Bitcoin if it was a technology that truly had sufficient utility to survive.

Here in my mind is a rather good statement of why the current actions of the IRS is actually a positive advancement for Bitcoin.

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

Record keeping is going to add certain complexities...but it seems to be that was almost always destined to be the case regardless of how taxation was ultimately chosen to be handled.

Somehow it doesn't seem to me that the necessary record keeping can't eventually be handled with a bit of code.

Just read the article and I am optimistic about the news.

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March 27, 2014, 04:17:51 PM
 #5

why would anyone choose to use bitcoin now.

Because it's best use cases have nothing to do with using it as daily spending money.


Ok... why would merchants want to accept bitcoin now when people can't use it as currency? The convenient and less risky use of bitcoin for purchasing was a strong use case




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Dafar
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March 27, 2014, 04:21:42 PM
 #6

why would anyone choose to use bitcoin now.

Because it's best use cases have nothing to do with using it as daily spending money.


Ok... why would merchants want to accept bitcoin now when people can't use it as currency? The convenient and less risky use of bitcoin for purchasing was a strong use case

Where did I say anything about merchants?

You said best use was nothing to do with daily spending money, it seemed like that was one of the strong points to me




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RodeoX
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March 27, 2014, 04:28:53 PM
 #7

there are no taxes or book keeping a person has to do to buy things with fiat money.
why would anyone choose to use bitcoin now.

What about income tax, sales tax, gift tax, property tax etc? I pay tax on all my their money.  Bottom line, In the U.S. gains in wealth are taxable. None of us like what the gov does with our tax money, but the money to run society has to come from somewhere.  Undecided

The gospel according to Satoshi - https://bitcoin.org/bitcoin.pdf

Free bitcoin in ICELAND - https://bitcointalk.org/index.php?topic=1610684
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March 27, 2014, 04:36:04 PM
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The question is will bitcoin/alts be like moonshine of the future. Some big players pay and some hide in the woods and make the shine.
Robert Paulson
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March 27, 2014, 04:40:12 PM
 #9

there are no taxes or book keeping a person has to do to buy things with fiat money.
why would anyone choose to use bitcoin now.

What about income tax, sales tax, gift tax, property tax etc? I pay tax on all my their money.  Bottom line, In the U.S. gains in wealth are taxable. None of us like what the gov does with our tax money, but the money to run society has to come from somewhere.  Undecided

the point is not that you have to pay tax.
the point is that with bitcoin you need to keep track of your tax liability after every purchase.
no such hassle with fiat money.
 
BTCisthefuture
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March 27, 2014, 05:00:18 PM
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Correct me if I'm wrong please,  but is this saying that every time you make a purchase using bitcoin you have to pay capital gains taxes if the value of bitcoin increased Huh  Wouldn't that make it pointless to use bitcoin as a means to buy things?

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seriouscoin
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March 27, 2014, 05:08:08 PM
 #11

Correct me if I'm wrong please,  but is this saying that every time you make a purchase using bitcoin you have to pay capital gains taxes if the value of bitcoin increased Huh  Wouldn't that make it pointless to use bitcoin as a means to buy things?

So do you think if you use foreign currency, you wont have to pay tax if the exchange rate has gone up?

For example, if you have EU or pounds in your bank, and you decide to purchase something online who takes those currencies, the moment you spend your EU or pounds, you have a tax liability to record because thats considered as exchange currencies. (selling your EU or pounds for USD)
7queue
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March 27, 2014, 05:27:46 PM
 #12

there are no taxes or book keeping a person has to do to buy things with fiat money.
why would anyone choose to use bitcoin now.

What about income tax, sales tax, gift tax, property tax etc? I pay tax on all my their money.  Bottom line, In the U.S. gains in wealth are taxable. None of us like what the gov does with our tax money, but the money to run society has to come from somewhere.  Undecided

Actually there are rules but the general population doesn't take the time to research them never mind follow them. Catch-22 for the Fed if they did. Remedy comes to mind for FRNs(USD).

Federal Income Tax does not go to run society but to pay interest on the fiat(as Debt) we use as money, you can find the laws at the National Archives/Library of Congress.

Ignore-ance, counted on by your friendly nation state central banker.

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In know way do I NO what I'm talking about!

8 )
whtchocla7e
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March 27, 2014, 05:32:42 PM
 #13

why would anyone choose to use bitcoin now.

Because it's best use cases have nothing to do with using it as daily spending money.

What are the best use cases?

How often does Grandma send money overseas?

If you want mass adoption, you need to cater to the needs of the masses.
s_s
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March 27, 2014, 05:37:23 PM
 #14

why would anyone choose to use bitcoin now.

Because it's best use cases have nothing to do with using it as daily spending money.

What are the best use cases?

How often does Grandma send money overseas?

If you want mass adoption, you need to cater to the needs of the masses.

I'm not sure how much "Grandma" sends....but there are 100's of billions of USD sent by others each year (v.s. the current 7 billion dollar Bitcoin market cap).

http://www.consumersinternational.org/our-work/financial-services/key-projects/global-money-transfers/

And the fees amount currently to 10-20%.

This is only one of those "best uses".
Robert Paulson
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March 27, 2014, 05:51:24 PM
 #15

why would anyone choose to use bitcoin now.

Because it's best use cases have nothing to do with using it as daily spending money.

What are the best use cases?

How often does Grandma send money overseas?

If you want mass adoption, you need to cater to the needs of the masses.

I'm not sure how much "Grandma" sends....but there are 100's of billions of USD sent by others each year (v.s. the current 7 billion dollar Bitcoin market cap).

http://www.consumersinternational.org/our-work/financial-services/key-projects/global-money-transfers/

And the fees amount currently to 10-20%.

This is only one of those "best uses".

this is not what satoshi intended when he created bitcoin.
bitcoin was supposed to replace fiat money and remove the banker's power to print money at will.
if all bitcoin is good for is sending money abroad cheaper than western union/bank wire transfer then bitcoin is failing its mission.
s_s
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March 27, 2014, 06:11:32 PM
 #16

why would anyone choose to use bitcoin now.

Because it's best use cases have nothing to do with using it as daily spending money.

What are the best use cases?

How often does Grandma send money overseas?

If you want mass adoption, you need to cater to the needs of the masses.

I'm not sure how much "Grandma" sends....but there are 100's of billions of USD sent by others each year (v.s. the current 7 billion dollar Bitcoin market cap).

http://www.consumersinternational.org/our-work/financial-services/key-projects/global-money-transfers/

And the fees amount currently to 10-20%.

This is only one of those "best uses".

this is not what satoshi intended when he created bitcoin.
bitcoin was supposed to replace fiat money and remove the banker's power to print money at will.
if all bitcoin is good for is sending money abroad cheaper than western union/bank wire transfer then bitcoin is failing its mission.

I'm sorry...but in my own opinion (which likely is not shared by you...and most likely some others on this board)...the notion that Bitcoin was EVER going to completely replace fiat currency is and was an ideal NEVER likely to be realized.
herebittybittybitty
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March 27, 2014, 06:14:30 PM
 #17

I was under the impression that the appeal of Bitcoin was for it to be a currency that can survive and thrive despite government attempts to thwart it... a kind of cockroach currency. Or an improvised currency like cigarettes in a prison. Am I wrong?
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March 27, 2014, 07:39:19 PM
 #18

Of course governments cannot call it a currency, so Denmark says there is no tax, US says it is property ... so what? A commodity is property too. They said, BTC is like digital gold, thanks for the flowers   Cheesy

It should be good for the price of Bitcoin because it encourages people to hold on to their coins.

Large BTC holders aka whales in the USA will think twice about selling large amounts of their coins. Spending them slowly over time is much smarter.

There is also the issue of being a money transmitter that goes away, which is also good.

Lets see how long it takes for this to sink in.

Truth is the new hatespeech.
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March 27, 2014, 08:07:36 PM
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There is also the issue of being a money transmitter that goes away, which is also good.

Lets see how long it takes for this to sink in.

That sounds right, if it is not money then moving bitcoins around does not make you a money transmitter. So that should open the doors to a lot more business and make it easier to shift funds in/out of BTC - and other altcoins.

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Ephesians 2:8-9
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March 27, 2014, 08:18:51 PM
 #20

I was under the impression that the appeal of Bitcoin was for it to be a currency that can survive and thrive despite government attempts to thwart it... a kind of cockroach currency. Or an improvised currency like cigarettes in a prison. Am I wrong?
That's what I think also. A lot of people say it will be destroyed by a government, yet no one has convinced me that there is a way for them to do it.  

The gospel according to Satoshi - https://bitcoin.org/bitcoin.pdf

Free bitcoin in ICELAND - https://bitcointalk.org/index.php?topic=1610684
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