Bitcoin Forum
December 04, 2016, 06:21:08 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: Are Bitcoins taxable?  (Read 1798 times)
shooter_mcgavin
Member
**
Offline Offline

Activity: 76



View Profile
May 10, 2011, 05:26:15 PM
 #1

Let's Bitcoin takes off. Say you lived in the US and had an online service that dealt in the equivalent of ~20,000 USD or more income for you (personally). What are the laws for income tax on a currency like this? Can you get in trouble with the IRS by simply having tons of BTC that the market values at (currently) almost 5$ per BTC?

If you think I've been helpful, toss me a few bitcoin -  1J2bbukPKFrwEfk4iHueKfLfFBXLSNGnTi
1480832468
Hero Member
*
Offline Offline

Posts: 1480832468

View Profile Personal Message (Offline)

Ignore
1480832468
Reply with quote  #2

1480832468
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1480832468
Hero Member
*
Offline Offline

Posts: 1480832468

View Profile Personal Message (Offline)

Ignore
1480832468
Reply with quote  #2

1480832468
Report to moderator
1480832468
Hero Member
*
Offline Offline

Posts: 1480832468

View Profile Personal Message (Offline)

Ignore
1480832468
Reply with quote  #2

1480832468
Report to moderator
BitLex
Hero Member
*****
Offline Offline

Activity: 588


View Profile WWW
May 10, 2011, 06:24:10 PM
 #2

simply having tons isn't income,
if it's about income, BTC aren't any different from cash, you can avoid to pay taxes, but you're not allowed to.  Wink

compro01
Hero Member
*****
Offline Offline

Activity: 485


View Profile
May 10, 2011, 08:12:16 PM
 #3

i would think they do not count as income until realized (converted to USD/other currency), and capital gains/losses also assessed at that point on the difference between acquisition and realization value. 

that is, no tax until you sell them, then you have to pay tax on the market value when you received them plus the capital gains tax on any value they gained between when you got them and when you sold them.


but i believe (if US state's sales tax is like it is in Canada) you would need to withhold sales tax on that 20k of sales if appropriate.  i'm basing this off the tax effect of community currencies, like canadian tire money, which i consider bitcoin to be the same as in a legal sense.  you have to pay sales tax on sales paid in CTM, but you can also pay that tax in CTM.
Ian Maxwell
Full Member
***
Offline Offline

Activity: 140



View Profile WWW
May 10, 2011, 11:09:07 PM
 #4

The big question would be whether bitcoin is a currency or a barter good. In some areas it won't make a difference, but in the US it makes a big difference and we would hope for it to be considered a currency.

In a goods-for-currency trade, the seller pays income tax, at some exchange rate determined by the IRS.
In a goods-for-goods trade, both parties are taxed based on the value of what they receive. This is exactly as unfair as it sounds.

Ian Maxwell
PGP key | WoT rating
TiagoTiago
Hero Member
*****
Offline Offline

Activity: 616


Firstbits.com/1fg4i                :Ƀ


View Profile
May 11, 2011, 12:07:16 AM
 #5

If government really wants to tax you they will come up with some excuse

(I dont always get new reply notifications, pls send a pm when you think it has happened)

Wanna gimme some BTC for any or no reason? 1FmvtS66LFh6ycrXDwKRQTexGJw4UWiqDX Smiley

The more you believe in Bitcoin, and the more you show you do to other people, the faster the real value will soar!

Do you like mmmBananas?!
Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!