Bitcoin is in the process of being "nipped at the bud", and we're doing nothing.

[BitTrade]

The US Government now oversees all possible entry points into Bitcoin from US Dollars, even localbitcoins / peer to peer sales over $300.  (see: florida bitcoin sting).  They now legally have access to the identity of everyone who purchases over $300 worth of Bitcoin with US Dollars.

The US Government also now requires you to report every Bitcoin transaction as a capital gain or loss.

So every time I spend bitcoin, I need to:

1) Keep track of how much fiat I used to buy the bitcoins originally
2) How much the item costs in fiat
3) Figure out when I bought what bitcoins and when
4) Calculate the capital gain based on the difference between the item and the purchase price of the coins
5) Repeat steps 1-4 every time I spend Bitcoin
6) Calculate my total gained / lost from every transaction at the end of the year.  
7) Report this amount on my tax form, including proof of every transaction in the event of an audit 

If this procedure is not followed, you are subject to being locked in a cage.  

So to buy a $2 coffee, I need to expend more effort than the coffee is worth.

Where is the outrage?  What many have feared is currently taking place, and it's like nobody gives a damn.  They are stopping Bitcoin in its tracks before there are enough people outraged by it to create any backlash.

Let this be noted by everyone calling for "more regulation", and to "ignore the libertarians".  We are losing.  Badly.  

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[BitTrade]

Oh hey a new thread talking about the same things we've all been discussing in seven other threads!

Speaking of trying to nip things in the bud...

[AngelSky]

You seem to say that it was a bad decision. What you did is a reality check about their attempt to "regulate" bitcoin. I don't see this decision as a bad thing. Bitcoin is now officially recognized and people making money with BTC are going to pay taxes. Ok.

It feels to me that it's a good news for people still wondering if bitcoins are legal or not (a lot..). No more questions about that.

Now, this decision is the first step to regulate BTC.

[seriouscoin]

OP, nothing stop you from handing IRS "BOOKS" literally of your btc tx. I'm sure IRS would enjoy them

I'm thinking of using tons of USB miners and mine on every pools there is, then i will have BOOKs of taxable events to report. It should be fun.... (millions of mBTC)

Anyone with me?

[BitTrade]

Now, this decision is the first step to regulate BTC.

Regulation is great... as well as needing to spend $4 worth of effort to buy a $2 coffee.

[AngelSky]

Now, this decision is the first step to regulate BTC.

Regulation is great... as well as needing to spend $4 worth of effort to buy a $2 coffee.

That's on paper. In my country it's forbidden to spit on the street and the fine is very expensive. I never saw someone got caught for this infraction

Maybe the IRS is going to investigate some "big fishes" and they needed that.

[BitTrade]

Now, this decision is the first step to regulate BTC.

Regulation is great... as well as needing to spend $4 worth of effort to buy a $2 coffee.

That's on paper. In my country it's forbidden to spit on the street and the fine is very expensive. I never saw someone got caught for this infraction

It's not just "on paper" when a coffee shop needs to spend a few thousand dollars on accounting every year just to be able to accept Bitcoin.  

[Tripjammer]

Hey bitcoin is now going to go main stream!!!

Totally legal and totally taxed

[BitTrade]

Hey bitcoin is now going to go main stream!!!

Totally legal and totally taxed

Totally legal and totally unusable

[Beliathon]

Hey bitcoin is now going to go main stream!!!

Totally legal and totally taxed

Totally legal and totally unusable

Torrenting copywrighted material is illegal.

Are torrents unusable? No, they are widely used and no one gives a shit about the law.

Same will happen here, watch.

[AngelSky]

Now, this decision is the first step to regulate BTC.

Regulation is great... as well as needing to spend $4 worth of effort to buy a $2 coffee.

That's on paper. In my country it's forbidden to spit on the street and the fine is very expensive. I never saw someone got caught for this infraction

It's not just "on paper" when a coffee shop needs to spend an extra thousand dollars on accounting just to be able to accept Bitcoin.   

If you run a business related to Bitcoin or accepting Bitcoins you keep track of everything. I don't see anything wrong with that. Sure it takes more time to do this extra-work but I don't see a merchant accepting Bitcoins and selling them everytime there is 2$ worth in his wallet. He can also use Bitcoin as a payment with 3rd parties making these transactions transparent.

[Beliathon]

Stop worrying about fiat exchange price, it's still 3-5 years away from being an accurate speculative representation of the actual utility of this technology.

[amspir]

So every time I spend bitcoin, I need to:

1) Keep track of how much fiat I used to buy the bitcoins originally
2) How much the item costs in fiat
3) Figure out when I bought what bitcoins and when
4) Calculate the capital gain based on the difference between the item and the purchase price of the coins
5) Repeat steps 1-4 every time I spend Bitcoin
6) Calculate my total gained / lost from every transaction at the end of the year.  
7) Report this amount on my tax form, including proof of every transaction in the event of an audit 

Sounds like a computer program to me, and something a computer could do for you automatically.  Do you have one?

Dear IRS, I have a computer that can transact funds using this new-fangled cryptocurrency technology, but I am unable to make it keep track of those transactions for tax purposes.  There's no public record of those transactions anywhere in cyberspace.



 

[seriouscoin]

So every time I spend bitcoin, I need to:

1) Keep track of how much fiat I used to buy the bitcoins originally
2) How much the item costs in fiat
3) Figure out when I bought what bitcoins and when
4) Calculate the capital gain based on the difference between the item and the purchase price of the coins
5) Repeat steps 1-4 every time I spend Bitcoin
6) Calculate my total gained / lost from every transaction at the end of the year.  
7) Report this amount on my tax form, including proof of every transaction in the event of an audit 

Sounds like a computer program to me, and something a computer could do for you automatically.  Do you have one?

Dear IRS, I have a computer that can transact funds using this new-fangled cryptocurrency technology, but I am unable to make it keep track of those transactions for tax purposes.  There's no public record of those transactions anywhere in cyberspace.



 

You gotta forgive the OP..... he joined in June 2013.... still a toddler in my books.

I bet he never filed tax with a software b4.

[amspir]

It's not just "on paper" when a coffee shop needs to spend a few thousand dollars on accounting every year just to be able to accept Bitcoin.  

I'd like that job.  A few thousand for maybe 15-30 minutes of work? (to generate an income/capital gains report)

[franky1]

i see an error in the examples given

The US Government now oversees all possible entry points into Bitcoin from US Dollars,<edited out> sales over $300.  

So to buy a $2 coffee, I need to expend more effort than the coffee is worth.

if the coffee was $302. then yes they want to see your accounts for it.

if the coffee was $2, then its not worth their time.

so only account for items over the $300 threshold (if thats the threshold them yanky IRS guys have set)

a prime example. if your relative gives you $10 in a birthday card. would you declare it.. if your relative gives you a rusty old car for $500 and you sell it, would you declare that.

thats the questions you should ask yourself and your accountant when it comes to declaring tax on bitcoin earnings

[Foxpup]

It's not just "on paper" when a coffee shop needs to spend a few thousand dollars on accounting every year just to be able to accept Bitcoin.  

I'd like that job.  A few thousand for maybe 15-30 minutes of work? (to generate an income/capital gains report)

Sorry, that vacancy's been filled. It turns out companies already employ accountants to work out their tax liability. Who knew?

[BitTrade]

Totally legal and totally unusable

Are torrents unusable? No, they are widely used and no one gives a shit about the law.

I also can't use a torrented file to buy a coffee. 

[justusranvier]

The US Government now oversees all possible entry points into Bitcoin from US Dollars, even localbitcoins / peer to peer sales over $300.  (see: florida bitcoin sting).  They now legally have access to the identity of everyone who purchases over $300 worth of Bitcoin with US Dollars.

The US Government also now requires you to report every Bitcoin transaction as a capital gain or loss.

So every time I spend bitcoin, I need to:

1) Keep track of how much fiat I used to buy the bitcoins originally
2) How much the item costs in fiat
3) Figure out when I bought what bitcoins and when
4) Calculate the capital gain based on the difference between the item and the purchase price of the coins
5) Repeat steps 1-4 every time I spend Bitcoin
6) Calculate my total gained / lost from every transaction at the end of the year.  
7) Report this amount on my tax form, including proof of every transaction in the event of an audit 

If this procedure is not followed, you are subject to being locked in a cage.  

So to buy a $2 coffee, I need to expend more effort than the coffee is worth.

Where is the outrage?  What many have feared is currently taking place, and it's like nobody gives a damn.  They are stopping Bitcoin in its tracks before there are enough people outraged by it to create any backlash.

Let this be noted by everyone calling for "more regulation", and to "ignore the libertarians".  We are losing.  Badly.  

Bitcoin is bigger than the USA.

The people who you're complaining are not giving a damn are quietly setting up shop elsewhere.

[BitTrade]

You gotta forgive the OP..... he joined in June 2013.... still a toddler in my books.

I bet he never filed tax with a software b4.

I've actually claimed capital gains before.  One entrance, one exit.  I subtracted two numbers.  

Nobody on the entire planet has ever been required to claim capital gains on every purchase they've made.  Nobody is buying coffee with stocks or gold ingots.