How to pay taxes?

[BitProdigy]

From what I've gathered you have to pay capital gains on bitcoins from the time you acquired them to the time you spent them or cashed them out, but what if you only acquire them and do not spend them or cash them out? Is there anything required by the IRS come tax time?

[mayax]

From what I've gathered you have to pay capital gains on bitcoins from the time you acquired them to the time you spent them or cashed them out, but what if you only acquire them and do not spend them or cash them out? Is there anything required by the IRS come tax time?

yes,

maybe it will help:    http://www.irs.gov/pub/irs-drop/n-14-21.pdf

[BitProdigy]

Thank you that document is dated 2014, I will read it now, my next immediate question however is that I may or may not have purchased and sold large amounts of bitcoins in the 2011 - 2012 time frame and may or may not still have some of those bitcoins. Am I obligated to pay taxes on capital gains made two years ago even though this document from the IRS is dated 2014? Would that be considered late reporting technically if i did?

[ethan1]

I think you shoul change your topic to '' How to pay no taxes'' =))

[mayax]

Thank you that document is dated 2014, I will read it now, my next immediate question however is that I may or may not have purchased and sold large amounts of bitcoins in the 2011 - 2012 time frame and may or may not still have some of those bitcoins. Am I obligated to pay taxes on capital gains made two years ago even though this document from the IRS is dated 2014? Would that be considered late reporting technically if i did?

I don't think that you should report your earnings from 2011 - 2012. the law is not retroactive.

[jonald_fyookball]

From what I've gathered you have to pay capital gains on bitcoins from the time you acquired them to the time you spent them or cashed them out, but what if you only acquire them and do not spend them or cash them out? Is there anything required by the IRS come tax time?

if you only acquire them and dont cash them out, you are not on the hook because capital gains
are calculated when profits are realized.

[koelen3]

I don't think you need to pay taxes on them since they were from back 2012-2013 unless you decide to cash them.
You must confirm it from a local CA

[BitProdigy]

So since I cashed in 2012 before the law was in effect, and because I have not cashed bitcoins this year, I do not have any obligations to pay taxes?? sweet! Thanks dudes!

[CtrlAltBernanke420]

what if you bought at 1200 on mtgox and sell at $230 coinbase

[BitProdigy]

what if you bought at 1200 on mtgox and sell at $230 coinbase

Firstly, never ever ever do that... To answer the question though I don't believe capital losses can be taxed, so you'd have lost a lot of money tax free. (disclaimer: I could be wrong as I know virtually nothing about taxes and how they work.)

[CtrlAltBernanke420]

what if you bought at 1200 on mtgox and sell at $230 coinbase

Firstly, never ever ever do that... To answer the question though I don't believe capital losses can be taxed, so you'd have lost a lot of money tax free. (disclaimer: I could be wrong as I know virtually nothing about taxes and how they work.)

No you are right. The problem will be proving you bought them at X price.

You can write off up 3000/year in deductions from trading losses. Otherwise gains i think are taxed at 14.9%

The tax rate on most net capital gain is no higher than 15% for most taxpayers. Some or all net capital gain may be taxed at 0% if you are in the 10% or 15% ordinary income tax brackets.

What i wonder, is private

[BitProdigy]

What i wonder, is how can you run a business that receives cash and bitcoin, and pay taxes only on the cash profits after expenses.

I believe bitcoin will eventually need to have legal tender status. (disclaimer: but again, I know nothing of what I speak)

[koelen3]

Suppose , you bought 100 BTC at 1200$ during Mt. gox (and you have a receipt or transaction detail to show it to TO's ) and you sold them at let say 500$
and even if the amount is pretty high , you are not liable to pay tax since you didn't make any profit , but you will have to file a return and/or show papers and deposit and cashing receipt details to them .
I say again confirm everything from a CA , as every country and even states have their own and different TAX laws.

[turvarya]

Thank you that document is dated 2014, I will read it now, my next immediate question however is that I may or may not have purchased and sold large amounts of bitcoins in the 2011 - 2012 time frame and may or may not still have some of those bitcoins. Am I obligated to pay taxes on capital gains made two years ago even though this document from the IRS is dated 2014? Would that be considered late reporting technically if i did?

I don't think that you should report your earnings from 2011 - 2012. the law is not retroactive.

They didn't make new laws, they just describe how already existing laws apply to Bitcoin. It's the first sentence in the IRS-document.

This notice describes how existing general tax principles apply to transactions using
virtual currency.

[BitProdigy]

Thank you that document is dated 2014, I will read it now, my next immediate question however is that I may or may not have purchased and sold large amounts of bitcoins in the 2011 - 2012 time frame and may or may not still have some of those bitcoins. Am I obligated to pay taxes on capital gains made two years ago even though this document from the IRS is dated 2014? Would that be considered late reporting technically if i did?

I don't think that you should report your earnings from 2011 - 2012. the law is not retroactive.

They didn't make new laws, they just describe how already existing laws apply to Bitcoin. It's the first sentence in the IRS-document.

This notice describes how existing general tax principles apply to transactions using
virtual currency.

So I'm assuming this means that I would be subject to these laws even before this notice was made public? Therefore in my hypothetical not necessarily real scenario in which I bought and sold large amounts of bitcoin in 2012 and never filed taxes reflecting my gains (yes gains! let's say I doubled my money and got out in this hypothetical scenario), that I would be currently in violation of tax laws and even if I were to pay the taxes on those gains now it would be subject to penalty because it is now late?

Say it aint so! I guess I would need to consult with a CB or CA or whatever I don't even know what that stands for… dang.

[CoinCidental]

Thank you that document is dated 2014, I will read it now, my next immediate question however is that I may or may not have purchased and sold large amounts of bitcoins in the 2011 - 2012 time frame and may or may not still have some of those bitcoins. Am I obligated to pay taxes on capital gains made two years ago even though this document from the IRS is dated 2014? Would that be considered late reporting technically if i did?

I don't think that you should report your earnings from 2011 - 2012. the law is not retroactive.

They didn't make new laws, they just describe how already existing laws apply to Bitcoin. It's the first sentence in the IRS-document.

This notice describes how existing general tax principles apply to transactions using
virtual currency.

So I'm assuming this means that I would be subject to these laws even before this notice was made public? Therefore in my hypothetical not necessarily real scenario in which I bought and sold large amounts of bitcoin in 2012 and never filed taxes reflecting my gains (yes gains! let's say I doubled my money and got out in this hypothetical scenario), that I would be currently in violation of tax laws and even if I were to pay the taxes on those gains now it would be subject to penalty because it is now late?

Say it aint so! I guess I would need to consult with a CB or CA or whatever I don't even know what that stands for… dang.

youl be sharing a cell with wesley snipes.....hope u like black cock lol 

[calfries]

No one is obligated to pay taxes? People only pay taxes to stay out of trouble.
The question is how will the IRS know if you did not pay tax on your Bitcoin?
Simply keep all your Bitcoin transactions hidden.

[turvarya]

Thank you that document is dated 2014, I will read it now, my next immediate question however is that I may or may not have purchased and sold large amounts of bitcoins in the 2011 - 2012 time frame and may or may not still have some of those bitcoins. Am I obligated to pay taxes on capital gains made two years ago even though this document from the IRS is dated 2014? Would that be considered late reporting technically if i did?

I don't think that you should report your earnings from 2011 - 2012. the law is not retroactive.

They didn't make new laws, they just describe how already existing laws apply to Bitcoin. It's the first sentence in the IRS-document.

This notice describes how existing general tax principles apply to transactions using
virtual currency.

So I'm assuming this means that I would be subject to these laws even before this notice was made public? Therefore in my hypothetical not necessarily real scenario in which I bought and sold large amounts of bitcoin in 2012 and never filed taxes reflecting my gains (yes gains! let's say I doubled my money and got out in this hypothetical scenario), that I would be currently in violation of tax laws and even if I were to pay the taxes on those gains now it would be subject to penalty because it is now late?

Say it aint so! I guess I would need to consult with a CB or CA or whatever I don't even know what that stands for… dang.

No idea about US-laws.
In Austria, when you didn't pay taxes you just press charges against yourself(not sure, if that is the right english term, it is not as bad as it sounds) and you have to pay the taxes you didn't pay before and don't even get a penality.

[bitcointaxes]

From what I've gathered you have to pay capital gains on bitcoins from the time you acquired them to the time you spent them or cashed them out, but what if you only acquire them and do not spend them or cash them out? Is there anything required by the IRS come tax time?

If you only bought them, you do not need to do anything.

However, if you earned or mined them, they are treated as income at the fair value or their daily price

I don't think you need to pay taxes on them since they were from back 2012-2013 unless you decide to cash them.
You must confirm it from a local CA

There are no time limits. You would need to refile past years if you had income to declare.

Suppose , you bought 100 BTC at 1200$ during Mt. gox (and you have a receipt or transaction detail to show it to TO's ) and you sold them at let say 500$
and even if the amount is pretty high , you are not liable to pay tax since you didn't make any profit

You would definitely want to declare that, as you have $70,000 capital losses you can offset against other gains and a portion of your income. That's a $27k tax rebate (albeit over many years).

So I'm assuming this means that I would be subject to these laws even before this notice was made public

These aren't new laws, they are clarifying existing ones, so they are retrospective.