Are Bitcoins taxable?

[Lord of the Lies]

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?

I have thought of creating a topic regarding this topic, but instead, i used the search bar to see if there are previous topics about taxing the Bitcoins.  This was posted May 10, 2011, and nobody did care to reply this when I believe this is a high-quality topic. 

Should the government impose a tax on transactions using the cryptocurrency?   In what way they can. 

rise! necrothread, arise!

but in seriousness, some interesting thoughts above.

the real benefit is that bitcoins can be hidden from sticky gov fingers

whether or not that gets you in hot water is another story

but then again, proving that you have the btc or private keys can be difficult

if innocent until proven guilty, then all is good

however, i don't think the western democracies work like that anymore. they're corrupt, greedy, and only out for power. so, i wouldn't expect due process or justice

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[Whitegriever]

In my country it is that if you want to cash out your bitcoins you need to pay tax above that and that is a lot because you also have to pay the fees to trade bitcoin for real money than the tax on it to the government.

[DoublerHunter]

Bitcoins are not taxable because it is decentralized and the government cannot touch bitcoin unless the people that uses bitcoin in their country is forced to pay taxes by having a law that will tell people that they need to declare their income in bitcoin and pay taxes for it. Bitcoins as of now are not taxable and it is a great advantage because we can get our income in full.

[PalindromemordnilaP]

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?

I think in some country especially the US, the IRS are in the move to intervene in the decentralized way of running the cryptocurrency world. I've read an article at: http://www.investopedia.com/articles/investing/040515/are-there-taxes-bitcoins.asp which may be the answer of this topic. But here in our country, we are still enjoying our bitcoin 100% tax free.

[Pettuh4]

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?

I think in some country especially the US, the IRS are in the move to intervene in the decentralized way of running the cryptocurrency world. I've read an article at: http://www.investopedia.com/articles/investing/040515/are-there-taxes-bitcoins.asp which may be the answer of this topic. But here in our country, we are still enjoying our bitcoin 100% tax free.

I think before any government can make Bitcoin taxable they have to develop a system to check all transactions that goes through the local exchanges within their domain and even if this is established people can choose to trade one on one and you'll not necessarily know who owns an amount of bitcoins from your country unless it is spent through an exchange there and this makes it difficult to be taxable.

[AntonAnton]

In itself, bitcoin is not taxed on its own, but the actions with it, judging by the position of the government of the Russian Federation, will (and perhaps already) are taxed

[websoftwareengineer]

One of the advantage of bitcoins is not taxable. Exchanging your bitcoins to ico's does not require you to pay tax and it was a huge advantage since everyone is suffering from tax that is being reduce on their monthly salary. Bitcoin might end poverty if everyone knows it.

[devinks]

In my country it is that if you want to cash out your bitcoins you need to pay tax above that and that is a lot because you also have to pay the fees to trade bitcoin for real money than the tax on it to the government.

I think this is almost all over the country or every time we withdraw money from an exchange there is always a discount fee. this already includes taxes for the government. so I think this includes tax

[tengek37]

is actually taxed on each transaction, but the tax is not the state but the company or broker bitcoin itself.

[Lorilikes]

It depends in whether you local jurisdiction acknowledges btc as monetary property or personal property .. or if it is considered an asset / security etc. some places shrug it off like it isn't even income so that's definitely not taxable in that case.  I advise you to check with local financial authorities for sure.

[ruskytailz02]

There is no tax... the thing is you need to pay fees if you transfer them or pay the tax if you exchange them in to fiat or money... bitcoin has no tax at all but it will have if you exchange it or make transaction to pay the fees did you get it now?

[ipanks]

bitcoin itself don't have tax but i think we can get tax when we want to send our money into our account bank because if the money is receive into our account, then in that time, our money can get tax by daily or monthly. beside that, this could be happen if we exchange our bitcoin in large amount and then we send it into our account and this could make the banks will be suspicious and maybe they will asked to us, where did we get the money.

[szpalata]

There is no tax... the thing is you need to pay fees if you transfer them or pay the tax if you exchange them in to fiat or money... bitcoin has no tax at all but it will have if you exchange it or make transaction to pay the fees did you get it now?

Even a black market can arise in the exchange of bitcoin to fiat and taxes will be avoided completely. Theres no comprehensive system just nyet to make bitcoin taxable and until that is instituted bitcoin will remain as it is without taxation.

[Jeger]

I think you will be taxed when you sell your Bitcoins for other fiat. For example you bought 100 Bitcoin at $5 each and now they are worth a total of $560,000 then you will be taxed capital gain of your Bitcoins if you happen to sell all of your Bitcoin stash, otherwise you won't be taxed.

[jubayerjb25]

Bitcoin is capital gains tax and not income tax that's why we can hold bitcoins for a long time without paying any tax on them for many many years. but if government wants then in near future Bitcoins will turn into taxable property .

[fateh1313]

In our country bitcoin is treated like a commodity mrkt. but because they not given bitcoin legal acceptance so they cannot charge tax till we convert bitcoin into FIAT. otherwise if we deal only bitcoin to bitcoin  it is not taxable

[DoublerHunter]

I think you will be taxed when you sell your Bitcoins for other fiat. For example you bought 100 Bitcoin at $5 each and now they are worth a total of $560,000 then you will be taxed capital gain of your Bitcoins if you happen to sell all of your Bitcoin stash, otherwise you won't be taxed.

I don't think that you will be taxed even you will sell your bitcoin for the other type of currency because bitcoin is decentralized and taxing bitcoin is not covered in the law of the government so it is not that easy for bitcoin to get into taxing process because no one can dictate bitcoin because bitcoin is allergic to centralized people and it will still remain decentralized and even in the future, i can say that it will not get taxed.

[Anita1873]

It depends on each country's law regarding tax and this issue comes when you sell your bitcoin and transfer the money to your bank account. The profit amount is taxable as per every country local taxation laws.

[rube08]

I believe any profits made from bitcoin converted to fiat money is taxable.  Lets say you pay 50 dollars worth of bitcoin and cash out at 100 dollars, you would only be taxed at 50 dollars. I am not a tax lawyer but it should be profit made from bitcoin.

[TimtheYoutuber]

Different countries have different laws, in the USA you have to pay taxes on your crypto currency in the form of capital gains