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Author Topic: Capital Gains Tax question  (Read 1528 times)
Kakmakr
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September 18, 2014, 01:25:47 PM
 #1

In my country, I am taxed on capital gains.

Say, I make BTC online and I did not buy any bitcoins. Would I have to pay capital gain tax or add the income I make to the yearly tax return, I have to submit? Because this is a additional income, and not my primary income, derived from my normal work.

I do not want to use an exchange, to convert my BTC to cash, because it asks for too much personal information.

What other methods are there, to still pay tax, but not to use an exchange?


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September 18, 2014, 01:43:05 PM
 #2

I'm not an auditor or anything, but I think it goes something like this, in the U.S. anyway.

Say you were paid $100 for work you did. I believe you will owe some of that in income tax, like other money you make from work. The capitol gains portion of what you owe only applies to a gain in value after you were paid. For example, you buy some gold when you discover that your payment in bitcoin is now worth $250. In that case you owe on the $150 increase.  If instead the value has dropped and your bitcoin payment is now worth only $50 you could claim a loss. The capitol gains tax can range from zero to Huh. I think it normally does not exceed 15%.

as far as sales outside of exchanges you could try in person meetings or just spend the bitcoin for things you need. That's what I do; I don't sell bitcoins, I use them the way God and Satoshi intended.

Hope this helps!

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Kakmakr
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September 19, 2014, 08:14:03 AM
 #3

Yes, I guess the best thing to do, is to keep it in BTC. But at one stage, we would need to buy stuff, where BTC are not accepted.

Some of the stuff, I want to buy, are already out of reach, because they only accept cash.

Thank you for the information, I already know how Capital gains work, was just not clear, on how I need to pay tax on extra income, derived from BTC ventures online. ^wink^

leannemckim46
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September 19, 2014, 10:02:18 PM
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To clarify my understanding of how you would be taxed in your situation I would say the following (I am not a tax professional):

You would be taxed twice in your situation. You would pay income taxes based on the value of the bitcoin you receive as payment for work performed, and once on the gain/loss (a loss would actually reduce your tax liability) of the bitcoin you received as payment.

For example say you perform work for someone and they pay you $2,000 worth of bitcoin based on the exchange rate at the time of payment(lets say that $2,000 worth of bitcoin is 4 BTC). $2,000 would be your cost basis for this 4 BTC. You would own income taxes on that $2,000. Then several months later you sell that 4 BTC for $2,500. You would then owe capital gains taxes on the $500 in gains (the difference between the price the BTC was worth when you received it as payment and when you sold it)

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charliemaggot
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September 20, 2014, 05:23:21 AM
 #5

In my country, I am taxed on capital gains.

Say, I make BTC online and I did not buy any bitcoins. Would I have to pay capital gain tax or add the income I make to the yearly tax return, I have to submit? Because this is a additional income, and not my primary income, derived from my normal work.

I do not want to use an exchange, to convert my BTC to cash, because it asks for too much personal information.

What other methods are there, to still pay tax, but not to use an exchange?

There are no capital gains until you sell those coins. Even then your country's tax rules may not require you to pay capital gains taxes, depending on where you live, how much it was, or how long you held them.

In addition, and depending on your country, you may have received income by receiving those coins. It would be classed as a barter exchange. Look into your tax laws.

https://bitcointaxes.info - Calculate capital gains taxes on Bitcoin and other crypto-currencies
snappa4ever
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September 22, 2014, 02:11:18 AM
 #6

In my country, I am taxed on capital gains.

Say, I make BTC online and I did not buy any bitcoins. Would I have to pay capital gain tax or add the income I make to the yearly tax return, I have to submit? Because this is a additional income, and not my primary income, derived from my normal work.

I do not want to use an exchange, to convert my BTC to cash, because it asks for too much personal information.

What other methods are there, to still pay tax, but not to use an exchange?

There are no capital gains until you sell those coins. Even then your country's tax rules may not require you to pay capital gains taxes, depending on where you live, how much it was, or how long you held them.

In addition, and depending on your country, you may have received income by receiving those coins. It would be classed as a barter exchange. Look into your tax laws.
If the OP is in the US he would need to pay income taxes based on the value of the bitcoin received when he is paid by his employer.

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Kakmakr
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September 22, 2014, 05:41:35 AM
 #7

I am not a US citizen, but our tax work the same way.

I went to see a tax consultant, and he came up with the same conclusion.

So you are spot on, with your statements.

Thanks ^smile^

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