I am looking into the future if I decide to sell some BTC, especially when a single bitcoin is worth many thousands or tens of thousands of US dollars. By the way, I live in USA and am dealing with USA bank accounts.
After reading the article below and others like it, it seems that certain size deposits and withdrawals into bank accounts can trigger a report to the IRS. I never knew this.
http://finance.zacks.com/federal-banking-rules-withdrawing-large-sums-cash-1696.htmlA 1970 anti-money-laundering law known as the Bank Secrecy Act spells out the rules for large cash withdrawals. In general, banks must report any transaction involving at least $10,000 in cash. That includes not only withdrawals but also deposits, currency exchanges (such as swapping dollars for euros or Japanese yen) and the purchase of traveler's checks. The law also requires banks to check identification on any transaction that would trigger a report. In other words, even if your bank doesn't usually ask for ID with withdrawals, it must do so for withdrawals over $10,000.
Well, what if in the future, I wanted to sell $50,000 or $100,000 worth of bitcoin using Coinbase.com? They send it to your bank account. Would this create a problem?
Depositing this size dollar amount would be a new thing for me and I wouldn't want to screw it up.
What exactly does the bank/government do when this happens? When it's reported, then what? They would ask you what it's for, I imagine. I don't think saying "I sold some bitcoin" would be a smart answer, but it's the truth. I wouldn't want them to hold my money and risk them not giving it to me because it was bitcoin related. Could they do that?
I don't typically deal in that size of deposit/withdrawal so it would be very out of the ordinary for my accounts.
I realize I would have to pay tax on it (which sucks but that's how it goes in America), and I am not trying to evade any laws.
Can anyone with experience in this area help me out with advice and their experience with what happens?
I'm sure this information would help others with similar questions.