Quote from: yoyoceramic on June 06, 2011, 11:44:23 PM

Quote from: enmaku on June 06, 2011, 11:34:47 PM

Quote from: yoyoceramic on June 06, 2011, 11:31:16 PM

Quote from: enmaku on June 06, 2011, 11:28:40 PM

Quote from: SgtSpike on June 06, 2011, 11:26:35 PM

Quote from: enmaku on June 06, 2011, 11:23:44 PM

Do "capital gains" add to your total income for the purpose of determining your tax bracket or are they taxed at the rate of your income-only tax bracket?

I do not believe capital gains adds to your total income for determining your tax rate.

So what about students and the like, who perhaps have no income or have income so low as to qualify as exempt? I would assume they'd pay at the lowest bracket, right?

This is correct. In 2011 for a non-married individual, if you make less than $34,500 you would pay 0% capital gains taxes. So, before you sell your bitcoin, ask for a reduction in your salary, then wait a year Wink

My fiancee is a full-time student who has no other source of income. Since bitcoins aren't legally recognized as money or stock would it be considered evasion if I gifted them to her and allowed her to liquidate them? Honestly I'm at work all day while she maintains the rigs anyway so really I'm less like the owner/operator and more like a contractor who build and installed the things Tongue

Well, you can gift up to $13,000 per year to an individual (or seperate individuals). That is for your tax benefit. Your beneficiary would still have to pay relevant taxes on the asset. I'm not an estate planning attorney, but one of those guys would be able to answer these types of questions. There are definitely legal ways to get to the coin on a tax favored basis, but it usually makes sense if you are uber wealthy (IE, you will meet hit the 5Mil lifetime gifting limit)

This is also incorrect. If you gift bitcoins, you will not have to pay a gift tax, but that doesn't change the fact that you received the bitcoins, the government will still want to collect tax on it, whether it is income tax or capital gains tax.