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Author Topic: American Exchanges - 1099 Reporting - The IRS - And WTF?!  (Read 1516 times)
rat
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March 30, 2014, 04:59:54 AM
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should US exchanges be avoided now?

i can already see coinbase sending me 1099s...

whatever arguments you bring, i'm not down with the ruling. because, BTC is money to me - not property.



this decision by the IRS was rushed. they were being pressured to make a decision.

and they made a misinformed one.
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March 30, 2014, 05:40:40 AM
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Let the politicos work this out.  This is not nearly the definitive end of this issue.  Especially when their efforts get slammed by a federal judge with no data, analysis, and fiduciary research (which reminds me, they'll be looking for a sacrificial lamb to test the waters soon).  I'll be eating popcorn when that happens.  Give them time to comprehend and hash out (no pun intended) the realities of this awesomeness.

Just my opinion based on 22 years of dealing with government dynamics.

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March 30, 2014, 05:41:24 AM
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sounds reasonable.

thanks for your input.
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March 30, 2014, 06:07:25 AM
 #4

We don't own anything except a set of keys. The IRS doesn't understand the technology, or how it works.

It's like keys to a set of glass safety deposit boxes.

Everyone can see what's inside the boxes (blockchain = public ledger). Keys can be copied and given to anyone you like.

You can't claim we own the contents of the safety deposit boxes, when it's public intellectual property distributed throughout the entire network.

You can lose your key, than it's worthless. How will they tax us ?

You can copy your key and give it to 5 friends. or 50. Anywhere in the world. Then who's property is it?

How do you, the IRS, legally prove who has keys and who doesn't?

It's all so silly. I am reminded SO MUCH of the copyright law war against technology.

How did that turn out? Oh right, technology won. Damn fools have a learning disability.


Remember Aaron Swartz, a 26 year old computer scientist who died defending the free flow of information.
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March 30, 2014, 06:16:26 AM
 #5

when bitcoin hits one million i will buy my own island and everyone can roam free like wild dogs lol =)

*BTCitcoin Wales Club*-- message me for details!--///\\\TELEKINETICS///\\can manipulate objects with their mind. Telekinesis is one of the basis of many superpowers that are based on "controlling/manipulating", it may evolve to the point that a Telekinetic can control anything at a subatomic level.
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March 30, 2014, 06:44:18 AM
 #6

There is a petition going on.
http://www.cryptocoinsnews.com/2014/03/29/white-house-petition-amend-irs-notice-2014-2-taxing-virtual-currencybitcoin/

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March 30, 2014, 07:12:42 AM
 #7

You can lose your key, than it's worthless. How will they tax us ?

You can copy your key and give it to 5 friends. or 50. Anywhere in the world. Then who's property is it?

How do you, the IRS, legally prove who has keys and who doesn't?
It's only a tax event when you spend the coins. Lose the keys and there's no tax to pay. Get a big ass TV delivered to your home and they'll want their cut of any gains.
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March 30, 2014, 08:08:18 AM
 #8

I'm just waiting for them to reach the point where I can write an article about how an auditor earning $80,000 per year + in US Taxpayer money investigated people on the Blockchain, and prosecuted a guy who owed an absurdly small amount of tax. Much like the small business owner who gets hit with $20,000 in penalties for not filing, and then settles for the actual $6,000 he realistically owes - all the while, the USG spent $10,000 to collect that.

My hope is that this will trigger a flat tax, or something similar, that isn't so absurdly complex - but then I would also like to win the lotto. As my dear old dad would say, guess which hand will fill up first. Cheesy

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Honeypot
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March 30, 2014, 09:05:49 AM
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Yes. Avoid them. Use chinese exchanges instead. Surely they have no pesky regulations and bothersome government interferences!

CryptoGretzky
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March 30, 2014, 09:19:44 AM
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You can lose your key, than it's worthless. How will they tax us ?

You can copy your key and give it to 5 friends. or 50. Anywhere in the world. Then who's property is it?

How do you, the IRS, legally prove who has keys and who doesn't?
It's only a tax event when you spend the coins. Lose the keys and there's no tax to pay. Get a big ass TV delivered to your home and they'll want their cut of any gains.

They clearly state that if you are mining it, then you have to pay tax on the price upon acquisition of the bitcoin at the price of that day.   I don't know how they can determine "acquisition" date if say you mine at a pool and they hold the coin for you first....   Wait for a low price day to transfer to your own wallet??

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March 30, 2014, 09:28:52 AM
 #11


should US exchanges be avoided now?

i can already see coinbase sending me 1099s...

whatever arguments you bring, i'm not down with the ruling. because, BTC is money to me - not property.

Paypal issues 1099-K's to inform the government of the gross income from the shit you sell on ebay.
Stock brokers issue 1099-B's to inform the government of your capital gains from trading stock.
Contractees issue 1099's to inform the the government of your gross income from working for them as a contractor.

Did you have an expectation that bitcoin-related activity would some how be different?


Quote
this decision by the IRS was rushed. they were being pressured to make a decision.
and they made a misinformed one.

The decision was not whether to tax the profit you make from bitcoin.  This was a given.   The IRS ruling allows a preferential tax treatment for long-term capital gains, for those that intended to legally pay their taxes.  Perhaps not advantageous to miners that held onto bitcoin and sold at a lower price than it was when mined.
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March 30, 2014, 10:08:21 AM
 #12

We don't own anything except a set of keys. The IRS doesn't understand the technology, or how it works.

It's like keys to a set of glass safety deposit boxes.

Everyone can see what's inside the boxes (blockchain = public ledger). Keys can be copied and given to anyone you like.

You can't claim we own the contents of the safety deposit boxes, when it's public intellectual property distributed throughout the entire network.

You can lose your key, than it's worthless. How will they tax us ?

You can copy your key and give it to 5 friends. or 50. Anywhere in the world. Then who's property is it?

How do you, the IRS, legally prove who has keys and who doesn't?

It's all so silly. I am reminded SO MUCH of the copyright law war against technology.

How did that turn out? Oh right, technology won. Damn fools have a learning disability.



That was marvelous. Thank you Smiley


It makes alot of sense, the absolute fact is that you can change the perspective and this is no longer what they described but just a set of keys. In that reality what they are saying would not make any sense.

SnZN5o2ePUgtr9roQyavBC3r41vz7p63ne
greenlion
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March 30, 2014, 10:29:25 AM
 #13

whatever arguments you bring, i'm not down with the ruling. because, BTC is money to me - not property.



this decision by the IRS was rushed. they were being pressured to make a decision.

and they made a misinformed one.

Unfortunately tax law is not based on your personal hunches.
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March 30, 2014, 01:14:25 PM
 #14


That's also a great way to put yourself on the IRS' radar for audit "hey he wants us to change our rulinn on bitcoin, he probably sold a bunch lets trigger an audit"

Buy peptides with BTC
LiteCoinGuy
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March 30, 2014, 01:23:31 PM
 #15

Let the politicos work this out.  This is not nearly the definitive end of this issue.  Especially when their efforts get slammed by a federal judge with no data, analysis, and fiduciary research (which reminds me, they'll be looking for a sacrificial lamb to test the waters soon).  I'll be eating popcorn when that happens.  Give them time to comprehend and hash out (no pun intended) the realities of this awesomeness.

Just my opinion based on 22 years of dealing with government dynamics.


yeah, things will change alot on the next years. we dont know where it ends but thats not the end  Wink

JunkieMiner
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March 30, 2014, 01:26:13 PM
 #16

In my opinion US exchanges should be avoided for some time

Keep calm and mine coins
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