US citizens, do you pay taxes on bitcoin exchange?

[awigaxeh-443]

Do you consider it as capital gains tax?

[1713522550]

1713522550

[1713522550]

1713522550

[1713522550]

1713522550

[BadBear]

Yes I do, just look at the many times in history where major criminals were arrested for tax evasion in lieu of other evidence (Al Capone being a notable example). Don't want to give them any more reason to scrutinize my finances, I'd have a hard time explaining where a lot of my income comes from. 

[payb.tc]

actually one of the thing i'm very curious about bitcoin was tax...

How can the government force tax on bitcoins? if you dont exchange and bitcoin was being use for transaction.

As for the bitcoin exchange, how do you file tax? do you get the account history and attach that in your "other" income box?

I bet most big miners (30ghs or above) wont file tax on their bitcoin "income"

it is only income once it is us dollars. its like growing corn. farms don't pay tax on 12 tons of corn. they pay tax on the amount they sold the corn for minus costs...

doesn't work like that in australia. you're supposed to declare any income earned and pay tax on it's AUD equivalent, whether you cashed out or not.

[awigaxeh-443]

How much are you guys paying in the USA?

[Uliena]

Do I understand correctly, if my idea on this is, that as long as I only collect bitcoins and don't exchange them for items or usd/eur I should not include them to my tax report?

[awigaxeh-443]

You can't tax unrealized capital gains.

[Stephen Gornick]

Related:
 - http://en.bitcoin.it/wiki/Tax_compliance

[payb.tc]

You can't tax unrealized capital gains.

if a US citizen accumulates millions of AUD, EUR, YEN, WON... is that just unrealized capital gains?

government will eventually include BTC in that list one way or the other, no matter how many try to argue that it's just a commodity, etc.

[awigaxeh-443]

Other currencies are not unrealized tax gains, those are already realized.

You should see BTC more as stocks, only taxable once sold.

[payb.tc]

Other currencies are not unrealized tax gains, those are already realized.

You should see BTC more as stocks, only taxable once sold.

as i said, governments will eventually put BTC in the list of 'currencies' if for nothing else but taxation purposes.

[awigaxeh-443]

buddy don't speculate, and no i doubt it will be put on a list as currency, usually anything the government can't control won't be given such luxury

[Xanax]

 I think so.

[BadBear]

Do I understand correctly, if my idea on this is, that as long as I only collect bitcoins and don't exchange them for items or usd/eur I should not include them to my tax report?

This is pretty much what my accountant said word for word when I asked him. Sure if it's recognized as a currency that will change, but it isn't.

[awigaxeh-443]

If BTC were to be made "centralized" then yeah why not

[awigaxeh-443]

US CITIZENS, HOW MUCH ARE YOU PAYING AS CAPITAL GAINS TAX?

[Stephen Gornick]

US CITIZENS, HOW MUCH ARE YOU PAYING AS CAPITAL GAINS TAX?

Oh, you are just asking for the rate at which long term capital gains are taxed?  15% (for most, from 0% to 28% for others)
 - http://www.irs.gov/newsroom/article/0,,id=106799,00.html
 - http://en.wikipedia.org/wiki/Capital_gains_tax#United_States
 - http://www.bankrate.com/finance/money-guides/capital-gains-tax-rates-1.aspx

[JoelKatz]

doesn't work like that in australia. you're supposed to declare any income earned and pay tax on it's AUD equivalent, whether you cashed out or not.

So if I play World of Warcraft and in a raid I get an item I could sell for $30, I have a taxable gain of $30? Do I have to pay taxes every time I level up -- after all, I could sell my account.

[JoelKatz]

Do I have to pay taxes every time I level up

you're supposed to declare your net capital gain or loss once per year.

So do people in Australia not play MMORPGs? Or do they all break the law?

[amytron]

i don't pay taxes on bitcoins

[JoelKatz]

doesn't work like that in australia. you're supposed to declare any income earned and pay tax on it's AUD equivalent, whether you cashed out or not.

So if I play World of Warcraft and in a raid I get an item I could sell for $30, I have a taxable gain of $30? Do I have to pay taxes every time I level up -- after all, I could sell my account.

you only report after you sell your account, not when you can...

That's the law in the United States. Capital gains are not taxed until realized. But read what payb.tc said, "you're supposed to declare any income earned and pay tax on it's AUD equivalent, whether you cashed out or not". I don't see how such a system could possibly work. It would mean that if you acquired any virtual asset you could sell (such as an MMORPG account with characters and items), you'd have to pay taxes on its increase in value.