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Author Topic: What happens if you sell large amounts of bitcoisn through cash deposits?  (Read 1281 times)
Tabata11
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March 19, 2015, 12:51:14 AM
 #1

I'm planning on selling 30 bitcoins on localbitcoin by accepting cash deposits at banks. What will the banks do if they see multiple cash deposits ranging from $500-2500 in a span of 2 weeks? Need some cash by the end of this month...
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mishax1
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March 19, 2015, 12:02:25 PM
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It sometimes depends on your bank, account and the amounts going in-out, and the status of your account (if you had liquidity problems before it might trigger some questions)

In overall, if suddenly they see these kind of amounts coming in in cash, they may ask you where is that money from, why is it in cash, they may force you to contact the authorities, pay taxed for selling goods, the usual anti money laundering procedures..

You may ask you account manager how would they react and is it "OK" to sell Bitcoins in private at these amounts. but, these amounts aren't too high and may not be even suspicious..

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March 20, 2015, 12:07:52 AM
 #3

Depends on where you are too.
I've made larger cash deposits without raising any alarm.

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March 20, 2015, 01:15:29 PM
 #4

I'm planning on selling 30 bitcoins on localbitcoin by accepting cash deposits at banks. What will the banks do if they see multiple cash deposits ranging from $500-2500 in a span of 2 weeks? Need some cash by the end of this month...
I doubt they would notice. 
Assuming you bought the coins at a higher price than now, which would not be difficult, you could tell them what you are expecting lots of cash deposits and that it is a capital loss, thus does not need to be taxed.

Otherwise try to do it over a few weeks and nothing over $10k, I guess they will have certain limits at which they will have to look into it, it will be higher than $1k, but maybe not more than 10k
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March 20, 2015, 05:22:11 PM
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depend on your country/bank, i could see a problem with taxes, if you are planning to no pay them otherwise, there is no problem at all

you could in any case, split the amount in multiple withdrawals(keep each under 1k)
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March 20, 2015, 05:24:46 PM
 #6

Shouldn't make a difference assuming you are paying your taxes. If not then, well... Maybe you'll get lucky or maybe you will go to prison?

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Tabata11
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March 21, 2015, 10:28:52 PM
 #7

I only need to pay taxes on profits, correct? So if I bought all of them at 200 and sell them at 250 then I would need to pay taxes on the $50 profit on each coins?

Also, I live in the USA. Do I need to pay federal and state taxes ? or just federal taxes ?
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March 22, 2015, 01:41:35 PM
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Depens on where you live and laws. There was a site maybe called Bitlegal, with a map showing which countries are friendly with bitcoin or not, but I can't find it now.
Tabata11
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March 23, 2015, 02:24:12 AM
 #9

I'm wondering how will the government know if I am getting money for bitcoins when it is just cash deposits?
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March 23, 2015, 07:16:10 AM
 #10

I'm wondering how will the government know if I am getting money for bitcoins when it is just cash deposits?

They can't, but if they are going to ask you about the nature of these deposits, you'll need to find some excuse, like selling used computer hardware..
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March 23, 2015, 09:02:14 AM
 #11

I'm wondering how will the government know if I am getting money for bitcoins when it is just cash deposits?

They can't, but if they are going to ask you about the nature of these deposits, you'll need to find some excuse, like selling used computer hardware..
They can still ask you to pay tax on any profits that you are making if you are selling used computer hardware.
I believe capital gains tax is low in America, maybe 28%.  You only pay that on your profit, so if you bought at $200 and sold at $250, you would pay $14 per bitcoin tax, assuming that 28% number is right.

They are unlikely to know about it though, unless you buy and sell through coinbase, in which case they could find out about it as it is a regulated exchange now.
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March 23, 2015, 10:48:10 AM
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I'm wondering how will the government know if I am getting money for bitcoins when it is just cash deposits?

They can't, but if they are going to ask you about the nature of these deposits, you'll need to find some excuse, like selling used computer hardware..
They can still ask you to pay tax on any profits that you are making if you are selling used computer hardware.
I believe capital gains tax is low in America, maybe 28%.  You only pay that on your profit, so if you bought at $200 and sold at $250, you would pay $14 per bitcoin tax, assuming that 28% number is right.

They are unlikely to know about it though, unless you buy and sell through coinbase, in which case they could find out about it as it is a regulated exchange now.

you don't pay taxes on a used things, don't know in the usa how it works, but this how it should be, it doesn't make sense to pay taxes twice, and personally i wouldn't in any case
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March 23, 2015, 11:43:17 AM
 #13

I'm wondering how will the government know if I am getting money for bitcoins when it is just cash deposits?

They can't, but if they are going to ask you about the nature of these deposits, you'll need to find some excuse, like selling used computer hardware..
They can still ask you to pay tax on any profits that you are making if you are selling used computer hardware.
I believe BTC.  You only pay that on your profit, so if you bought at $200 and sold at $250, you would pay $14 per bitcoin tax, assuming that 28% number is right.

They are unlikely to know about it though, unless you buy and sell through coinbase, in which case they could find out about it as it is a regulated exchange now.

I'm amazed to see someone considering a 28% tax rate is low!
I say ouch!

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March 23, 2015, 04:51:34 PM
 #14

2500$ is a normal amount and really not much, I guess they won't do anything for you. Just make it regularly, good luck.

About the taxes, make sure which state is asking the Bitcoin profit taxes.

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Tabata11
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March 23, 2015, 09:49:20 PM
 #15

My family has a restaurant business they have been running for years now. I was wondering if I can just sell through their bank accounts whenever I need large amounts of money($5k-$10k). I mean how will the bank know that this money is for bitcoins? Our family can tell the bank that we just happened to get a large catering order for a company or something...

I got this idea from how mobs and drug gangs money "clean" their money through restaurants and coin laundry mat.
randy8777
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March 23, 2015, 11:59:05 PM
 #16

2500$ is a normal amount and really not much, I guess they won't do anything for you. Just make it regularly, good luck.

About the taxes, make sure which state is asking the Bitcoin profit taxes.

if you do it the right way there won't be much you have to worry about. some banks will not even bother if amount is below a certain amount. for example, here if you deal with anything below €5000 banks will not say anything.
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