Would We Pay Taxes When We Don't Exchange Bitcoin for Fiat Anymore?

[Abu-Naim]

According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

During Bull Run, bitcoin and cryptocurrency will be everywhere due to the trend of bitcoin's price going up; therefore, he can use his bitcoin to buy some goods since there are stores and some shops accepting bitcoin as a means of exchange.

If he bought his bitcoin a long time ago, I don't think he should bother with the amount of taxes he should pay because by then he would have made a huge profit, and as others have said, it also depends on the country you live in.

[1714659078]

1714659078

[nakamura12]

It depends because some people doesn't need to pay taxes when they sell BTC to fiat kr should I say it depends in the country that a person is in where some must pay taxes when they sell BTC to fiat and some doesn't pay or isn't required to pay taxes when selling BTC to fiat and vice versa. My answer about the question "Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?" Is also NO unless you received a payment that needs to be reported to the government.

[Frankolala]

Coins that are lying idle in a wallet wouldn't be taxed because it is just there without any use. The tax that one would pay for converting bitcoin to fiat and vice versa is very small and shouldn't be a problem to whoever is using the exchange.

If you say that because of little tax for using an exchange,for that reason you won't convert your bitcoin to fiat,it is better that you hold it forever because it will be impossible for you to use an exchange in a country that is collecting tax from the exchange without you paying your tax to them.

[Smartvirus]

According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

It all depends on how these taxes are being levied.
Worst case scenario has always been, having to pay taxes on already taxed commodities which always seems unfair but, realizing that you’ve not and your hodlings still counts for untaxed income, you would always get to pay tax on them if declared or found out.

Tax evasion is a crime none the less so, it’s important that you watch out and of course, it’s nations specific. It doesn’t matter if bitcoin is now common and widely accepted by a wide range of merchants. It’s income, it’s taxable and that’s what counts. Having it lying around in a wallet just hides it from the eyes of those who might sort it out that’s all.

[darkangel11]

So you are asking will you be taxes if you spend your bitcoin directly? Likely yes. Spending and selling is usually treated the same. For example, in the US it doesn't matter if you sell or spend, any transaction made with Bitcoin triggers a tax event. There could in the future be a law that doesn't include small payments in Bitcoin as taxable, thus allowing Bitcoin to be used as a currency for spending without tax accounting nightmares. But for now I don't know that that is the case anywhere. So yes you would still pay taxes whether you exchange bitcoin for fiat, for altcoins, or directly spend Bitcoin.

Short answer: YES

I'd argue wit you about that because if you don't spend but hold. it's not taxable. Even in countries where a profit is taxable even if you don't convert to fiat, there's no way to prove that you're holding.
You have to be smart about what you're doing with the money, don't  use an address where you have 10 bitcoin to pay for a new TV, or a car.

For people who ask if this is ethical, it is. Are they protecting your bitcoin in any way? Are they helping you hold it? Why would they want profit from that if for many years they did not even recognize it as store of value, not to mention money?

[BitcoinPanther]

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

This depends on the law about taxing applied by the country.  If the country declared Bitcoin is taxable despite being not converted to fiat money, then the owner need to pay for its taxes.  But obviously this is dependent on the Bitcoin holder if he wanted to declare his Bitcoin holdings.

In my country, cryptocurrency is not taxable unless exchanged to fiat currency but there is always this condition of having a gain upon the conversion of the crypto currency.  If there is no gain, it is an obvious thing that we don't have to pay taxes for it.

I think the same concept applies in the US

Do you get taxed on converting crypto?
Converting one crypto to another: When you use bitcoin to buy ether, for example, you technically have to sell your bitcoin before you buy a new asset. Because this is a sale, the IRS considers it taxable. You'll owe taxes if you sold your bitcoin for more than you paid for it.

[OgNasty]

If there’s one thing you can be certain of it is that there will be more taxes in the future. They’re not only exploring taxing Bitcoin transactions (they already do) and improving enforcement, they’re also looking at how to tax you on the Bitcoin you own even if you don’t trade or sell it. Going after unrealized gains with taxes is a real thing…

[isaac_clarke22]

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

This is why I really do not want to interact some elders around the internet with the current changes we have now since most of them would just be close-minded on how technology works and like how limited some stuffs really just works.

As long as you're going to have Bitcoin go along with fiat money, there's obviously going to be like tax or at least "fees" that you're going to encounter beside of just having some mining fees. As long as there's some regulation going, there's always going to be taxes.

[Wakate]

Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

I don't really understand your question and the direction you are bringing it out from. How do you when you write "When fiat is no longer necessary" does it mean that Bitcoin will soon be the world currency very soon? You need to explain I'm details. There is no way that we will not going to continue exchanging Bitcoin for normal fiat. It is necessary and we ought to do that whether we intend to use an exchange or people around us. If we are in a country where tax is very important and is applicable then we will have no option than to pay.

[DoublerHunter]

If there’s one thing you can be certain of it is that there will be more taxes in the future. They’re not only exploring taxing Bitcoin transactions (they already do) and improving enforcement, they’re also looking at how to tax you on the Bitcoin you own even if you don’t trade or sell it. Going after unrealized gains with taxes is a real thing…

^ That is the point, taxing unrealized gains means imposing taxes on the increase in value of an asset that you have not sold or realized any actual profit from yet. I think this concept can be particularly complex and controversial, as it challenges traditional taxation and raises questions about fairness, implementation, and potential economic implications.
However, this also depends on which country you are in because some countries consider cryptocurrencies to be taxable assets regardless of whether they are converted to fiat currency, while others only apply taxes when there is a gain realized upon conversion. The decision to declare cryptocurrency holdings and pay taxes on them often rests with the individual holder, and tax authorities rely on the honesty and compliance of taxpayers to accurately report their transactions and gains.

[GideonGono]

In every crypto transaction that we make we are paying transaction fee in order for our transaction to be successful for me it is already considered as tax.
And I don't really understand how would they or the government would tax the people earning in crypto if they don't even know who or how much they are earning if the person wouldn't present it to them?
There are so many ways to hide our asset and I think most of us are well aware of it, and it isn't happening just in crypto this has been on for so long.
So this just proves that if they really want to avoid the tax they would find ways to do it, not just in crypto but also in other assets as well.

[serjent05]

Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

Yes, if that time comes, the government had possibly acknowledged Bitcoin as a mode of payment and probably had created laws and regulations on taxing Bitcoin holders.  Though I do not think that there will be a recurring tax on the same amount of BTC a person is holding since it would be unjust to keep taxing the same BTC that was taxed before.

In every crypto transaction that we make we are paying transaction fee in order for our transaction to be successful for me it is already considered as tax.

The transaction fee is paid within the Bitcoin system to be picked up by miners and our transaction to be confirmed.  Let us be aware that Bitcoin miners and the government are two different entity.

And I don't really understand how would they or the government would tax the people earning in crypto if they don't even know who or how much they are earning if the person wouldn't present it to them?

Because the government is entitled to demand tax from the gain of its citizen.  It is on the constitution and is in effect the moment we are born in that country.

[Mahanton]

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

As long those transactions would be passing up on a third party or platform then you are really that subjected to tax specially on fiat conversion on which it would really be just that a normal approach and the most nearest thing that i do have in mind in is on how to avoid taxes is to make out that p2p transactions face to face but this is somewhat that risky i would say and not all would really be that willing or confident on doing so considering that meeting up with some stranger which you do hold bitcoin or cash would really be putting you in danger.This is why only a few would really be having consideration on taking up such transaction and would really be just that prefer on touching up those platforms and services which do make out some direct conversion. Literally, if those USDT would really be siting somewhere else or not really that touching up or making out some conversion to be directly be deposited into your bank account then you cant really be taxed but on the time that it would really be traced up on your bank account then this is where questions been raised. You are really that subjected on paying up tax specially if your government is really that too keen and that too mindful about their citizens taxes no matter on what methods or ways or sources it do came from, they would really be always finding the
way that they would be getting out their share. 

[armanda90]

On every cryptocurrency transaction we have pay fees based on exchange term of service with how much percentage fees trading, but right now our fees added by taxes payment when trading in cryptocurrency depend with government business how excited transaction volume in cryptocurrency every day. You not try what happen with our country taxes when trading and deposit fund in local exchange market, we have pay fees trade and taxes each time for deposit fiat to exchange account and taxes fees when trading transaction between sell or buy. Totally each time transaction almost 1% fees have to pay for taxes and seems crazy when cut loss position.

P2P on Binance and several exchange is the best choose how to avoid from taxes when withdrawing fund to local exchange, find trusted seller on P2P transaction and faster process for withdrawing fund than use local exchange market.

[_BlackStar]

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

Have you ever read this source: Some things you need to know

At that source - there are important points that you need to pay attention to even though they are at the end of the page. Here's the quote:

Bitcoin is not an official currency. That said, most jurisdictions still require you to pay income, sales, payroll, and capital gains taxes on anything that has value, including bitcoins. It is your responsibility to ensure that you adhere to tax and other legal or regulatory mandates issued by your government and/or local municipalities.

With that being said - I can assume that you still have to pay taxes on what your country's government has regulated including bitcoins. If bitcoin has been adopted as legal tender and you profit from it through investment and trade - then you are still liable to pay value added tax to the government.

[lalabotax]

...According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

Regulations regarding taxes are absolutely the authority of the country where he lives. Maybe it will be different in some other countries. In my country, taxes are imposed on users who trade on centralized exchanges registered in our country. The tax fee is simultaneously deducted along with the trading fee and later the exchanges themselves deposit the tax to the state, from a certain percentage deduction. but when withdrawing it to a bank account, for now there is no tax, except if you regularly withdraw money with a high nominal, there may be something like income tax. And this may be different where your friend is, but if that country applies taxation to crypto, surely he has to pay those taxes, whether he likes it or not as long as he's doing the transaction.

[panganib999]

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

I'm not sure where he lives but if he lives in the US I think he's going to be taxed for his monetary assets the moment they become liquid. In the case of his bitcoins, he's going to be taxed for it soon as he convert it all into fiat. I suggest he take his money out little by little so he doesn't get taxed that much. Although I'm not really sure about the legalities of that since I'm not really living in the US and in my country, we don't get taxed for owning and converting cryptocurrencies into Fiat lols. If he's not living in the US then props and congrats to him, otherwise he's just fucked royally cause the IRS and the taxman will always catch up to him no matter what. Remind him that it's not bitcoin's fault that he's going to be taxed for his ownings, it's the government's fault for taxing everything with value to them.

[Yatsan]

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

I'm not sure where he lives but if he lives in the US I think he's going to be taxed for his monetary assets the moment they become liquid. In the case of his bitcoins, he's going to be taxed for it soon as he convert it all into fiat. I suggest he take his money out little by little so he doesn't get taxed that much. Although I'm not really sure about the legalities of that since I'm not really living in the US and in my country, we don't get taxed for owning and converting cryptocurrencies into Fiat lols. If he's not living in the US then props and congrats to him, otherwise he's just fucked royally cause the IRS and the taxman will always catch up to him no matter what. Remind him that it's not bitcoin's fault that he's going to be taxed for his ownings, it's the government's fault for taxing everything with value to them.

But the condition is not exchanging Bitcoin to fiat. Naturally, Bitcoin is decentralized and all of your wealth into such currency shouldn't be taxed. But as we all know  governments won't allow such thing to happen. Taxation might be done to your properties as you register it to the local governments perhaps your house or your car. But for sure they'd make a way to also tax your daily expenses such as needs. One way to do this is thru a third party exchanger, they'd just won't allow it 'coz taxes play a huge role in one country's economy. Is it a bad thing? Well taxes should be having an impression of such but corruption just exists. If taxes are being used properly, then people won't complain of it.

[Silberman]

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

It is better for that person to consult with a tax attorney as the laws of each country are different, however in some jurisdictions if you hold an asset for longer than a year before you sell it then you do not need to pay any taxes on it, so if such a law applies to him then he does not have anything to worry about, however he still needs to report this on his tax declaration, otherwise he may get in trouble even if he was not supposed to pay any tax when he sells his coins.

[davis196]

So, a senior citizen in one of the western countries makes a complaint that he preferred the 1950s when everything made sense and life was simple. He loves the analog times more than the digital. Despite this, he trusts Bitcoin self-custody, and that is the reason why he holds bitcoin. He complains that his bitcoin just sits in his hard wallet, and he doesn't even know what to do with it. According to him, his fear is that if he sells it during the next bull run, he will be taxed, and he doesn't want that. A question arises: Would taxes still be applicable if a time comes when exchanging bitcoin for fiat is no longer necessary?

Taxes will be applicable at all times. Do you really think that your(or his) Bitcoin holdings won't be taxed if you(or he) never convert BTC to fiat?
There are income taxes, capital gains taxes and VAT taxes. You can't escape taxes in one way or another.
If that senior citizen doesn't know what to do with his BTC, then the best decision would be to just HODL them.
I think that exchanging BTC to fiat will always be necessary, because Bitcoin will never become widely accepted as a legal tender.
It's normal for old people to feel nostalgia about the good old times, when life was simple and they were young. I don't know how this relates to the question you are asking.