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Author Topic: White House Petition to AMEND IRS NOTICE 2014-2 Taxing virtual currency/Bitcoin  (Read 4120 times)
amspir
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March 30, 2014, 12:50:26 AM
 #21

When you think about it, the IRS ruling encourages miners to sell their coins on the open market sooner rather than hoarding and selling later.  Seems to possibly help liquidity and stability of bitcoin.

That is a misunderstanding.   The capital gains rates are lower than regular income rates to encourage investment, over actually running a business or working for a living.

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pungopete468
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March 30, 2014, 12:50:35 AM
 #22

Do you have reading comprehensive problem? English isnt my first language and i can even understand IRS ruling perfectly.

Do you understand what "capital gain" mean? Think about it for 5 sec.....Let me explain to you what IRS is saying:

MINING will not be taxed as capital gain (since there is no capital in the first place ...duh), it will be included in gross income.

Capital gain ONLY APPLIES to SELL AND BUY btc as bitcoin is a property.

So any mining income will be taxable income. When you sell those mined btc, you might have capital gain/loss. Remember the max capital loss you can claim per year is $3k, the rest will be rolled to next year.

Not true, please read it again. When you mine a Bitcoin you must pay capital gains tax equivalent to the market value at the time it enters your wallet. The capital gains tax is at a higher rate than regular income within the first year. When you mine a Bitcoin you are responsible for the capital gains tax at a rate of 36% and future gains will be taxed at the time of sale.

You can only claim regular income on USD; not Bitcoin.

If you hold Bitcoin longer than one year your tax rate decreases.

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cryptoanarchist
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March 30, 2014, 12:51:29 AM
 #23

I have yet to receive any notices from the IRS over any bitcoin that I sold. I don't just hand my money over to thieves.
seriouscoin
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March 30, 2014, 12:52:44 AM
 #24

Do you have reading comprehensive problem? English isnt my first language and i can even understand IRS ruling perfectly.

Do you understand what "capital gain" mean? Think about it for 5 sec.....Let me explain to you what IRS is saying:

MINING will not be taxed as capital gain (since there is no capital in the first place ...duh), it will be included in gross income.

Capital gain ONLY APPLIES to SELL AND BUY btc as bitcoin is a property.

So any mining income will be taxable income. When you sell those mined btc, you might have capital gain/loss. Remember the max capital loss you can claim per year is $3k, the rest will be rolled to next year.

Not true, please read it again. When you mine a Bitcoin you must pay capital gains tax equivalent to the market value at the time it enters your wallet. The capital gains tax is at a higher rate than regular income within the first year. When you mine a Bitcoin you are responsible for the capital gains tax at a rate of 36% and future gains will be taxed at the time of sale.

You can only claim regular income on USD; not Bitcoin.

If you hold Bitcoin longer than one year your tax rate decreases.

Ok, you're just an idiot. At first i had my doubt, but you confirmed it

Quote
Q: Does a taxpayer who "mines" virtual currency (for example, uses computer resources to validate Bitcoin transactions

and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting

from those activities?

A: Yes, when a taxpayer successfully "mines" virtual currency, the fair market value of the virtual currency as of the

date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information


When an ESL has to explain English to you, you know you're stupid.
seriouscoin
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March 30, 2014, 12:55:28 AM
 #25

I have yet to receive any notices from the IRS over any bitcoin that I sold. I don't just hand my money over to thieves.

Usually when you receive notices, it would be too late... Either move out of US or you would be broke.
amspir
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March 30, 2014, 12:59:57 AM
 #26

Not true, please read it again. When you mine a Bitcoin you must pay capital gains tax equivalent to the market value at the time it enters your wallet. The capital gains tax is at a higher rate than regular income within the first year. When you mine a Bitcoin you are responsible for the capital gains tax at a rate of 36% and future gains will be taxed at the time of sale.

You are still misinformed.  http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States  Read the article and check the references.
jonald_fyookball
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March 30, 2014, 01:00:19 AM
 #27

When you think about it, the IRS ruling encourages miners to sell their coins on the open market sooner rather than hoarding and selling later.  Seems to possibly help liquidity and stability of bitcoin.

That is a misunderstanding.   The capital gains rates are lower than regular income rates to encourage investment, over actually running a business or working for a living.



In any event, I don't think any of this is going to effect bitcoin much.
The big point in all of this is the good news that the irs is helping
To legitimize bitcoin rather than trying to help ban it.

7Priest7
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March 30, 2014, 01:13:08 AM
 #28

Who cares wtf the I.R.S. does.

Not a single Satoshi I own is traceable to me as a individual.
Anybody could own my BTC, there is no way for the I.R.S. to prove otherwise.

Bitcoin was designed in a way that you should all be able to safely ignore the I.R.S. on this issue.
In reality most of BTC value is attributed to that fact, silkroad is what gave BTC value, gambling sites also helped.
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March 30, 2014, 01:13:54 AM
 #29

That's the spirit lol

seriouscoin
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March 30, 2014, 01:17:33 AM
 #30

When you think about it, the IRS ruling encourages miners to sell their coins on the open market sooner rather than hoarding and selling later.  Seems to possibly help liquidity and stability of bitcoin.

That is a misunderstanding.   The capital gains rates are lower than regular income rates to encourage investment, over actually running a business or working for a living.



In any event, I don't think any of this is going to effect bitcoin much.
The big point in all of this is the good news that the irs is helping
To legitimize bitcoin rather than trying to help ban it.

Actually trading btc falls into capital gain is a good news. It would reduce day traders due to higher risk (up to 43% of profit is taxable)

As for big investor like Secondmarket, they're more likely holding their btc for long term capital gain.
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March 30, 2014, 01:18:53 AM
 #31

Not a single Satoshi I own is traceable to me as a individual.
Anybody could own my BTC, there is no way for the I.R.S. to prove otherwise.
QFT.

Localbitcoins + cash = perfect anonymity.

Besides, you could just claim all your BTC was gifted to you by a non-US citizen.

Unless they can prove you're lying in a court of law, you're fine.

See if they spend the money on you. Unless you're a WHALE, they won't bother.

Remember Aaron Swartz, a 26 year old computer scientist who died defending the free flow of information.
seriouscoin
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March 30, 2014, 01:19:08 AM
 #32

Who cares wtf the I.R.S. does.

Not a single Satoshi I own is traceable to me as a individual.
Anybody could own my BTC, there is no way for the I.R.S. to prove otherwise.

Bitcoin was designed in a way that you should all be able to safely ignore the I.R.S. on this issue.
In reality most of BTC value is attributed to that fact, silkroad is what gave BTC value, gambling sites also helped.

I dare you to do what you said if you live in U.S.

Unless your total btc holding is worth couple thousands USD.
jonald_fyookball
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March 30, 2014, 01:21:35 AM
 #33

When you think about it, the IRS ruling encourages miners to sell their coins on the open market sooner rather than hoarding and selling later.  Seems to possibly help liquidity and stability of bitcoin.

That is a misunderstanding.   The capital gains rates are lower than regular income rates to encourage investment, over actually running a business or working for a living.



In any event, I don't think any of this is going to effect bitcoin much.
The big point in all of this is the good news that the irs is helping
To legitimize bitcoin rather than trying to help ban it.

Actually trading btc falls into capital gain is a good news. It would reduce day traders due to higher risk (up to 43% of profit is taxable)

As for big investor like Secondmarket, they're more likely holding their btc for long term capital gain.


Wouldn't it still be capital gains if btc was currency

hjdt4fd1
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March 30, 2014, 01:21:55 AM
 #34

Bitcoin each coin can be individually tracked through the hash, good this way.

ShareCoin: ST9i672195N9V9rCKxiXBgkL9WphPvbQxT
seriouscoin
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March 30, 2014, 01:22:03 AM
 #35

Not a single Satoshi I own is traceable to me as a individual.
Anybody could own my BTC, there is no way for the I.R.S. to prove otherwise.
QFT.

Localbitcoins + cash = perfect anonymity.

Besides, you could just claim all your BTC was gifted to you by a non-US citizen.

Unless they can prove you're lying in a court of law, you're fine.

See if they spend the money on you. Unless you're a WHALE, they won't bother.

Terrible advice, you sound like  just you're just a kid whos thinking about tax recently.

You will fall into " receiving funds from outside of U.S." and its not pretty when I.R.S ask you.
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March 30, 2014, 01:24:13 AM
 #36

Bitcoin was designed in a way that you should all be able to safely ignore the I.R.S. on this issue.
I dare you to do what you said if you live in U.S.
I intend to.
Unless your total btc holding is worth couple thousands USD.
Pennies worth, billions worth, makes little difference.
The same hurdle exists, Proof of ownership.
Anybody can wash their bitcoins much easier than fiat.
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March 30, 2014, 01:25:12 AM
 #37

Besides, you could just claim all your BTC was gifted to you by a non-US citizen.

Unless they can prove you're lying in a court of law, you're fine.

Not a loophole, gifts are regarded as taxable income, unless you are legally a non-profit corporation.
seriouscoin
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March 30, 2014, 01:25:54 AM
 #38

When you think about it, the IRS ruling encourages miners to sell their coins on the open market sooner rather than hoarding and selling later.  Seems to possibly help liquidity and stability of bitcoin.

That is a misunderstanding.   The capital gains rates are lower than regular income rates to encourage investment, over actually running a business or working for a living.



In any event, I don't think any of this is going to effect bitcoin much.
The big point in all of this is the good news that the irs is helping
To legitimize bitcoin rather than trying to help ban it.

Actually trading btc falls into capital gain is a good news. It would reduce day traders due to higher risk (up to 43% of profit is taxable)

As for big investor like Secondmarket, they're more likely holding their btc for long term capital gain.


Wouldn't it still be capital gains if btc was currency

Nope

Quote
Where there are currency gains or losses in connection with a trade or business or with the management or administration of investment assets, the gain is treated as an ordinary gain (rather than as a capital gain) and any loss is generally treated as an expense
7Priest7
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March 30, 2014, 01:26:54 AM
 #39

You will fall into " receiving funds from outside of U.S." and its not pretty when I.R.S ask you.

We have some rights, the fifth amendment is one of them.

The legal burden of proving ownership would be on the I.R.S. I would not be legally obligated to say anything.

The fact: they will not be able to enforce these tax rules.
pungopete468
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March 30, 2014, 01:36:27 AM
 #40

Do you have reading comprehensive problem? English isnt my first language and i can even understand IRS ruling perfectly.

Do you understand what "capital gain" mean? Think about it for 5 sec.....Let me explain to you what IRS is saying:

MINING will not be taxed as capital gain (since there is no capital in the first place ...duh), it will be included in gross income.

Capital gain ONLY APPLIES to SELL AND BUY btc as bitcoin is a property.

So any mining income will be taxable income. When you sell those mined btc, you might have capital gain/loss. Remember the max capital loss you can claim per year is $3k, the rest will be rolled to next year.

Not true, please read it again. When you mine a Bitcoin you must pay capital gains tax equivalent to the market value at the time it enters your wallet. The capital gains tax is at a higher rate than regular income within the first year. When you mine a Bitcoin you are responsible for the capital gains tax at a rate of 36% and future gains will be taxed at the time of sale.

You can only claim regular income on USD; not Bitcoin.

If you hold Bitcoin longer than one year your tax rate decreases.

Ok, you're just an idiot. At first i had my doubt, but you confirmed it

Quote
Q: Does a taxpayer who "mines" virtual currency (for example, uses computer resources to validate Bitcoin transactions

and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting

from those activities?

A: Yes, when a taxpayer successfully "mines" virtual currency, the fair market value of the virtual currency as of the

date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information


When an ESL has to explain English to you, you know you're stupid.


http://www.irs.gov/pub/irs-drop/n-14-21.pdf

You are correct. I based my opinion for the tax treatment on mining off of bad sources.

The capital gains reporting is only on Bitcoin sales; the market price at the time a coin is mined will be reported as regular income on W-2 or 1099.

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