How does one safely deposit large USD amounts ($50k-$100k) after selling BTC?

[colinistheman]

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.html

A 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.

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[Cicero2.0]

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.html

A 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. 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.

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.

I don't think there is a way around this that would not open you to federal charges. You could attempt to move it slowly on local bit coins etc. but to sell that much quickly you would be liable for taxes which stinks, but it would be better than multiple felonies. 

[colinistheman]

I should add: I would NOT be trying to break the law in any way whatsoever.

The goal of my question is not on how to evade taxes or proper channels.

I just want to be able to do my deposit without it being stopped or getting me into trouble somehow.

[Captian8Ball]

Hi, honestly your better off keeping it cash because you will get taxed and even your bank account frozen cause your bank may try to pull a fast one  and start making accusations like 'how do we know this money wasnt made illegally' etc. you dont want the hassle buddy.

If you want to buy items and the only way to do it is via card or bank trf then you deposit the cash into your account and pay for it straight away.

A really illegal solution is to launder it and pay the minimal tax you can.

Dont worry in a few years time youll be making all your transactions out of your wallet and your kids will be asking you questions like 'What was it like having to deal with CASH and BANKS' like your a really old guy lol.

 

[colinistheman]

What do you mean by keeping it cash? It's already in BTC.

I am speculating and looking to recoup some of that into cash. It sounds like you're saying I can't sell my BTC for USD and deposit that into my bank account safely (in the amounts I am referring to).



For example, by using coinbase.com to make the sale of btc into usd

[DeeBo]

I should add: I would NOT be trying to break the law in any way whatsoever.

The goal of my question is not on how to evade taxes or proper channels.

I just want to be able to do my deposit without it being stopped or getting me into trouble somehow.

Just talk to your bank ahead of time before you send the deposit.  Make sure to ask them about their policy on any holds for large wire transfers.  Any deposit over $10k requires the bank to send a report to the IRS but that won't get you into trouble as long as you declare that money as income and pay taxes on it at the end of the year.

Honestly you're more likely to run into problems with the bitcoin exchange than you are with your bank.  I don't know if it's been sorted out now but I remember reading a few months ago about how Bitstamp was trying to make sells "prove" the source of their BTC before they would allow them to withdrawal USD.  IIRC they let them exchange the BTC into USD (and took their fee for doing so) and only notified them of the "prove your source" requirement after they had initiated the USD wire transfer.

Once you get the money out of the exchange I doubt you will run into many problems (check with your bank first anyway just in case.)  Once the bank recieves the wire transfer in your name they're legally obligated to give you that money (as long as its rightfully yours.)

[colinistheman]

Thanks Deebo.

I would be using coinbase.com unless there is a better alternative at the time. As per your advice, I will definitely ask my bank before I do it. I just wonder if they ask me what it's from and I tell them from selling digital currency/property, if that will make any difference? or raise additional flags? I don't want my bank account shut down or frozen or anything. Maybe this is not realistically going to happen, which would be good.

Does anyone have any experience with withdrawing large dollar amounts to their bank account with coinbase?

[franky1]

the question i would ask is why would you want $50k in one day..

in the future just sell what you need. $500 a week to pay the bills and feed yourself, maybe $20k to get a new car.. but cashing 100% out.. never.. think about retirement not a quick lottery win that you end up spending in a day

[lonestranger]

Thanks Deebo.

I would be using coinbase.com unless there is a better alternative at the time. As per your advice, I will definitely ask my bank before I do it. I just wonder if they ask me what it's from and I tell them from selling digital currency/property, if that will make any difference? or raise additional flags? I don't want my bank account shut down or frozen or anything. Maybe this is not realistically going to happen, which would be good.

Does anyone have any experience with withdrawing large dollar amounts to their bank account with coinbase?

Your bank account is linked to coinbase, right?  You're not holding bitcoin elsewhere in an "offshore" account, right, so you're not using an actual wire transfer?  If you're just dealing with Coinbase then your bank will see where the funds came from and you should check with your bank what their policy is on bitcoin.  My bank was opposed to bitcoin and accepted the coinbase transfer one time only and I was warned not to do it again.

[boliu]

withdraw $9999 each time. and open multiple accounts

[mel2000]

Why not just make multiple <$10k deposits from Coinbase? Avoiding the possible bank hassle of a single large deposit is a good enough reason for making multiple smaller deposits.

[jbreher]

withdraw $9999 each time. and open multiple accounts

... and trigger a SAR for obvious attempt to mislead the regulators. Not a good plan.

You'll need to make a determination how friendly your bank is to bitcoin. If friendly, then just carry on - because you are not doing anything illegal nor immoral. If, however, your bank is, or may become, antagonistic toward bitcoin, then now is the time to start shopping around for a better bank.

[LostDutchman]

What do you mean by keeping it cash? It's already in BTC.

I am speculating and looking to recoup some of that into cash. It sounds like you're saying I can't sell my BTC for USD and deposit that into my bank account safely (in the amounts I am referring to).



For example, by using coinbase.com to make the sale of btc into usd

Depsoiting is perfectly safe and seucre.

It's getting out  tons of fiat cash that gets sticky.

[LostDutchman]

withdraw $9999 each time. and open multiple accounts

NOT a good idea and believe it or not, can be a crime in itself.

That'll trip the triggers faster'n you can say "Draw Pardner!"

[colinistheman]

withdraw $9999 each time. and open multiple accounts

I had thought of that myself but from the articles I've read that is a bad idea because it is trying to avoiding flags like jbreher and LostDutchman said. So I won't be doing that!

the question i would ask is why would you want $50k in one day..

in the future just sell what you need. $500 a week to pay the bills and feed yourself, maybe $20k to get a new car.. but cashing 100% out.. never.. think about retirement not a quick lottery win that you end up spending in a day

Well, it's specifically an investment and I want to pay off a large credit card debt. I have more btc that I will be holding much much longer (Many, many years). Don't worry I won't be selling my whole stash (not by a longshot)-- I'm not that stupid.

But if I sell, it will be from a wallet that I am using specifically for a shorter-term amount.

[colinistheman]

Depsoiting is perfectly safe and seucre.

It's getting out  tons of fiat cash that gets sticky.

Well then I've already accomplished the difficult part

[colinistheman]

Your bank account is linked to coinbase, right?  You're not holding bitcoin elsewhere in an "offshore" account, right, so you're not using an actual wire transfer?  If you're just dealing with Coinbase then your bank will see where the funds came from and you should check with your bank what their policy is on bitcoin.  My bank was opposed to bitcoin and accepted the coinbase transfer one time only and I was warned not to do it again.

Good advice. I will make sure before I do the transfer that it is ok. I have a couple of bank accounts with different banks, so I can find one that will work before I transfer the funds. All my accounts are in the USA, so nothing is offshore.

[DeathAndTaxes]

The CTR (currency transaction report) is for cash (as in those physical pieces of paper with dead presidents on them).  A bank wire or ACH for $10,000 (or $10,000,000) doesn't warrant a CTR.  However your bank may file a SAR (suspicious activity report) for just about financial transaction they find out of the ordinary (or even ordinary).  The "S" is SAR is suspicious.  It isn't proof of criminal activity or money laundering merely suspicion.  That definition is very loosely defined and since the filings are secret, banks have nothing to lose by filing liberally.

[bgibso01]

Does anyone have any experience with withdrawing large dollar amounts to their bank account with coinbase?

I haven't had any issues with coinbase xfers.  This is not cash from a banking secrecy standpoint as it is an electronic transfer.  BSA is looking specifically for 'cash' at the bank teller level when talking about the nice little form they give me attitude on

The real quesiton is what kind of reporting requirements does Coinbase have.  I'm not sure they have any right now, but I'm betting it will become like a 1099-k (Paypal) or 1099-B (brokerage) in the future so that the IRS knows what's going on.

Since the IRS has declared btc to be property, be sure to hold large amounts 1yr +1 day so you can get capital gains treatment.

[colinistheman]

The CTR (currency transaction report) is for cash (as in those physical pieces of paper with dead presidents on them).  A bank wire or ACH for $10,000 (or $10,000,000) doesn't warrant a CTR.  However your bank may file a SAR (suspicious activity report) for just about financial transaction they find out of the ordinary (or even ordinary).  The "S" is SAR is suspicious.  It isn't proof of criminal activity or money laundering merely suspicion.  That definition is very loosely defined and since the filings are secret, banks have nothing to lose by filing liberally.

This would be one of my concerns-- that the SAR would be applied because it is a bitcoin-related transaction. I would have to rule that out before doing the transfer. I guess asking the bank before I do it would be the best way.