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Author Topic: How many dollars is a Bitcoin really worth?  (Read 3077 times)
Bungeebones
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July 15, 2012, 09:16:00 PM
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When it comes time to fill out a tax return IRS rules say any items taken through trade and barter are to be assigned a fair market value and that amount should be reported. And of course they use the dollar sign $ throughout the form and the word "dollar" throughout the form, charts and regulations. And since they wrote the form we can assume they really did mean dollar when they said it.

But what exactly is the legal definition of a "dollar"? If you visit https://online.kitco.com/products/3004/1_oz_Silver_American_Eagle.html you will see the $1 Silver Dollar. It says "dollar" right on it and is is minted by the US Mint which is authorized by the Congress and the US Constitution to produce our nation's coins and money. but if you look at the coin here https://online.kitco.com/bullion/completelist_USD.html you will see it has a list price of USD $ 30.94 ea. Wait a minute! They want 30.94 Dollars to buy ONE DOLLAR? Why would anyone give almost 31 dollars to get only one? That is crazy!

Well, we all know what they mean. They want 30.94 FEDERAL RESERVE NOTES in exchange for One US Dollar. My point is that the legal tender laws did not make a Federal Reserve Note a dollar. The dollar was, and still is, a silver coin issued by the US Mint that contains the legal standard weight and purity of silver. Bear in mind the company that owns the website is merely a private company so what they call something has no authority when it comes to legal definitions.

But when it comes to the IRS and tax documents we know they have to use legal terms and definitions. And since we need to determine the value of barter items in dollar value shouldn't we honestly say the value in dollars is the exchange rate in FRNs divided by 31?

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casascius
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July 15, 2012, 09:21:34 PM
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Sounds very creative, but actually proposing such a thing to the IRS, or anything resembling it, is likely to put you on the "tax protestor" / "frivolous tax argument" crackpot list at the IRS, and everything you file will be combed over closely until you die.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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July 15, 2012, 09:29:57 PM
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Crackpot, me? They don't know the difference between an adjective and a noun! They're the crackpots!

It would be suicide for one person to do it, of course, but a real public discussion about how a Federal Reserve Note (that is its name) came to be known LEGALLY as a dollar may be valuable if there are ever any legal challenges to using Bitcoin.

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July 15, 2012, 09:32:56 PM
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I was told by H&R Block that the IRS told them that all of my Bitcoin profits, whether it was through mining, trading, selling goods/services, buying gold/silver, etc. was all just a "hobby" and I didn't need to report anything.

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July 15, 2012, 11:19:10 PM
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I know some people tried to avoid taxes by getting paid in Silver Dollars only.

Say I signed an agreement with my employer to get only paid in Silver dollars at an hourly rate of $1 an hr.
My salary would be paid in legal US tender, even if it has a value over face value its still a legal us tender and has to be accept as face value.

If I had an S corp I could see myself doing this, but right now I have a LLC and income is pass-thru.

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July 18, 2012, 05:49:10 PM
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I was told by H&R Block that the IRS told them that all of my Bitcoin profits, whether it was through mining, trading, selling goods/services, buying gold/silver, etc. was all just a "hobby" and I didn't need to report anything.

I love loopholes. Tax free income!!! WOOO!!!

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July 18, 2012, 09:16:21 PM
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When it comes time to fill out a tax return IRS rules say any items taken through trade and barter are to be assigned a fair market value and that amount should be reported. And of course they use the dollar sign $ throughout the form and the word "dollar" throughout the form, charts and regulations. And since they wrote the form we can assume they really did mean dollar when they said it.

But what exactly is the legal definition of a "dollar"? If you visit https://online.kitco.com/products/3004/1_oz_Silver_American_Eagle.html you will see the $1 Silver Dollar. It says "dollar" right on it and is is minted by the US Mint which is authorized by the Congress and the US Constitution to produce our nation's coins and money. but if you look at the coin here https://online.kitco.com/bullion/completelist_USD.html you will see it has a list price of USD $ 30.94 ea. Wait a minute! They want 30.94 Dollars to buy ONE DOLLAR? Why would anyone give almost 31 dollars to get only one? That is crazy!

Well, we all know what they mean. They want 30.94 FEDERAL RESERVE NOTES in exchange for One US Dollar. My point is that the legal tender laws did not make a Federal Reserve Note a dollar. The dollar was, and still is, a silver coin issued by the US Mint that contains the legal standard weight and purity of silver. Bear in mind the company that owns the website is merely a private company so what they call something has no authority when it comes to legal definitions.

But when it comes to the IRS and tax documents we know they have to use legal terms and definitions. And since we need to determine the value of barter items in dollar value shouldn't we honestly say the value in dollars is the exchange rate in FRNs divided by 31?

Congrats... you've discovered the whole thing is a fraud!

Unfortunately, they don't care, and don't want to hear it, and will shove you into a jail cell without a second thought if you don't just give them what they want, whether it's legal or sensible or not.

And the populace will cheer the tax collectors on.

Welcome to the U.S.!

/cynicism

Bitcoin is the ultimate freedom test. It tells you who is giving lip service and who genuinely believes in it.
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In the future, books that summarize the history of money will have a line that says, “and then came bitcoin.” It is the economic singularity. And we are living in it now. - Ryan Dickherber
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The idea that deflation causes hoarding (to any problematic degree) is a lie used to justify theft of value from your savings.
Taz
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July 21, 2012, 11:55:09 AM
 #8


Congrats... you've discovered the whole thing is a fraud!

Unfortunately, they don't care, and don't want to hear it, and will shove you into a jail cell without a second thought if you don't just give them what they want, whether it's legal or sensible or not.

And the populace will cheer the tax collectors on.

Welcome to the U.S.!

/cynicism


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