Bitcoins and Tax

[bytezero]

Don’t you just love how specific the rules are for us small guys, while the big guys like Goldman Sachs get million and billion dollar tax breaks for no good reason?

[1714975568]

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[1714975568]

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[foxbitcoin]

So what does that mean about  mining equipment? Are they tax deductible?

[centauribit]

The bigger question is how could the IRS possibly enforce this? With help from the NSA?

[misterycoins]

If Bitcoin is property it therefore would be subject to all sorts of sales
taxes as it changes hands.

[Onestopbrokers Directory]

Don’t you just love how specific the rules are for us small guys, while the big guys like Goldman Sachs get million and billion dollar tax breaks for no good reason?

+1

[keithers]

There is NO LAW requiring you to pay any taxes on your bitcoin.

If the IRS said you had to pay taxes on your WoW gold, would some of you dunces pay them for that, too?

There may not be a law that requires you to pay taxes on your BTC, but evading taxes is illegal in most (if not all countries).   If you are buying and selling a few BTC per year, then you will probably be overlooked.   But if you regularly have deposits in excess of 5-10k in and out of your bank account, and claim nothing, you will more than likely get audited, and then you are up shit creek...

[seoincorporation]

 They can try to tax bitcoin, but it shows that the government is so ignorant about the Bitcoin. How can they ask for taxes if they cant prove who make the transactions?

[Ayers]

They can try to tax bitcoin, but it shows that the government is so ignorant about the Bitcoin. How can they ask for taxes if they cant prove who make the transactions?

and imagines when anon features will hang bitcoin, no one can prove that anymore, bitcoin should be tax free, treated as a currency

[cryptoanarchist]

There may not be a law that requires you to pay taxes on your BTC, but evading taxes is illegal in most (if not all countries).   

Wow, that is one stupid ass statement.

[axel2078]

There is NO LAW requiring you to pay any taxes on your bitcoin.

If the IRS said you had to pay taxes on your WoW gold, would some of you dunces pay them for that, too?

Isn't there though? The IRS is now treating bitcoin as "property" instead of currency for tax purposes. This means that people (in the U.S.) treating bitcoin as an investment could be subject to capital gains taxes when they sell it. I don't know the name of the law this falls under though. 
http://dealbook.nytimes.com/2014/03/25/i-r-s-says-bitcoin-should-be-considered-property-not-currency/?_php=true&_type=blogs&_php=true&_type=blogs&hp&_r=1

http://www.irs.gov/pub/irs-drop/n-14-21.pdf

http://money.cnn.com/2014/03/25/technology/innovation/irs-bitcoin/

[Aemon]

So will people be taken for taxes this year because of property?  Is there a small amount of coins you can sell without worrying, I have sold some through coinbase(probably under $200) should I even be worried at all?

[axel2078]

So will people be taken for taxes this year because of property?  Is there a small amount of coins you can sell without worrying, I have sold some through coinbase(probably under $200) should I even be worried at all?

One of the articles I read mentioned transactions consisting of $600 or more, so you're probably fine.  I'd say you are ok regardless because this is all in relative infancy and the IRS is just now starting to actively take interest in it.  Most people aren't even aware that the IRS is claiming they will tax bitcoin now.

[charliemaggot]

One of the articles I read mentioned transactions consisting of $600 or more, so you're probably fine.  

There is no threshold for capital gains. The "$600" is often misunderstood, it is a form filing requirement for business and just not relevant to capital gains.

So will people be taken for taxes this year because of property?  Is there a small amount of coins you can sell without worrying, I have sold some through coinbase(probably under $200) should I even be worried at all?

Yes, just like last year and the year before, people will pay taxes on any gains they made selling or spending crypto-currencies.

There is nothing to worry about. When you spend a coin, you just need to know what you bought it for and when, so you can work out if you made a profit (or loss). You then declare that on your tax forms as capital gains/losses (Schedule D). The only time you can ignore it is if the gain is < $0.50, because you only report rounded whole dollars.

Coinbase has a Gains report, so just use that. Or use bitcointaxes.

[keithers]

One of the articles I read mentioned transactions consisting of $600 or more, so you're probably fine.  

There is no threshold for capital gains. The "$600" is often misunderstood, it is a form filing requirement for business and just not relevant to capital gains.

So will people be taken for taxes this year because of property?  Is there a small amount of coins you can sell without worrying, I have sold some through coinbase(probably under $200) should I even be worried at all?

Yes, just like last year and the year before, people will pay taxes on any gains they made selling or spending crypto-currencies.

There is nothing to worry about. When you spend a coin, you just need to know what you bought it for and when, so you can work out if you made a profit (or loss). You then declare that on your tax forms as capital gains/losses (Schedule D). The only time you can ignore it is if the gain is < $0.50, because you only report rounded whole dollars.

Coinbase has a Gains report, so just use that. Or use bitcointaxes.

Mark my words, coinbase.com will be the first crypto web wallet site to start issuing 1099s to their users.   They are basically like the paypal of cryptos. 

Taxation is the only reason governments are really looking at regulation.   At the end of the day, they really don't care if a few people are using it to buy drugs.   If they can tax the sale of the drugs, they will be more than happy.

[botany]

One of the articles I read mentioned transactions consisting of $600 or more, so you're probably fine.  

There is no threshold for capital gains. The "$600" is often misunderstood, it is a form filing requirement for business and just not relevant to capital gains.

So will people be taken for taxes this year because of property?  Is there a small amount of coins you can sell without worrying, I have sold some through coinbase(probably under $200) should I even be worried at all?

Yes, just like last year and the year before, people will pay taxes on any gains they made selling or spending crypto-currencies.

There is nothing to worry about. When you spend a coin, you just need to know what you bought it for and when, so you can work out if you made a profit (or loss). You then declare that on your tax forms as capital gains/losses (Schedule D). The only time you can ignore it is if the gain is < $0.50, because you only report rounded whole dollars.

Coinbase has a Gains report, so just use that. Or use bitcointaxes.

Mark my words, coinbase.com will be the first crypto web wallet site to start issuing 1099s to their users.   They are basically like the paypal of cryptos. 

Taxation is the only reason governments are really looking at regulation.   At the end of the day, they really don't care if a few people are using it to buy drugs.   If they can tax the sale of the drugs, they will be more than happy.

I think the government will start getting a lot more serious about taxing/tracking bitcoin transactions once corporates start using it widely. They wouldn't want any revenue to go under the radar.

[2dogs]

Mark my words, coinbase.com will be the first crypto web wallet site to start issuing 1099s to their users.   They are basically like the paypal of cryptos.

All the reason to stay away from coinbase.com. 
They are in bed with the banks, and according to Andreas Antonopoulos, most likely have a goal to sell out to JP Morgan.

[Aemon]

So if I can't use Coinbase to sell my coins, what can I use?

And does this work the other way around, if you purchase coins can you use them as a deduction on your taxes?

[charliemaggot]

So if I can't use Coinbase to sell my coins, what can I use?

And does this work the other way around, if you purchase coins can you use them as a deduction on your taxes?

Bitcoin purchases aren't tax deductible. But you can claim capital losses from trading at a loss, up to the value of your other gains that year and $3,000 income.

[bitcats]

So if I can't use Coinbase to sell my coins, what can I use?

Dont use Coinbase! There are much better alternatives, i.e. Circle, ..

[Aemon]

So if I can't use Coinbase to sell my coins, what can I use?

And does this work the other way around, if you purchase coins can you use them as a deduction on your taxes?

Bitcoin purchases aren't tax deductible. But you can claim capital losses from trading at a loss, up to the value of your other gains that year and $3,000 income.

Great information. 

Dont use Coinbase! There are much better alternatives, i.e. Circle, ..

What should I be using then?  Circle I am not familiar with?  I am living in the US and am not sure what other places I can sell coins to if I so choose to.  Thanks for the help!