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Author Topic: Capital gains as a Collectible or Currency.  (Read 1037 times)
steelhouse
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April 28, 2011, 09:32:05 AM
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From what I understand  suppose you have $100 and you invest in BTC and they are priced at $1 so you pay $100.  Now suppose BTC goes to $100.  Now you have $10,000.  You will still have to pay short-term capital gains 28% tax on that, then all the state and local taxes.   In the mean time the dollar lost 10% a year in value due to government overspending.  Seems you are screwed either way.  Unless you decide not to report or buy stuff.  suppose all this takes 2 years.

$10000-$100
$9900
$7800 - 28% tax.
$5800 - state and local union taxes.
$4600 - after inflation taxes.
$4176 - after California sales taxes.





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April 28, 2011, 09:42:27 AM
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This is totally a problem with bitcoin.

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April 28, 2011, 10:29:30 AM
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Don't know about the US, but where I live capital gains tax only becomes payable once you sell the asset.
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April 28, 2011, 06:49:00 PM
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From what I understand  suppose you have $100 and you invest in BTC and they are priced at $1 so you pay $100.  Now suppose BTC goes to $100.  Now you have $10,000.  You will still have to pay short-term capital gains 28% tax on that, then all the state and local taxes.   In the mean time the dollar lost 10% a year in value due to government overspending.  Seems you are screwed either way.  Unless you decide not to report or buy stuff.  suppose all this takes 2 years.

It's only a capital gain when you sell it.

But yes -- when you sell, your gains are taxable.

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