Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

Yeah, every trade is a taxable event to US persons. Whether that is buying coffee or litecoin. It is property according to the IRS.

Even if you thought you could get away with the like kind exchange rule, you still have to report every trade individually on the exemption form.

If it were classified as a stock, you could just report net gains and losses but not so with property.

They have made compliance nearly impossible so unless someone passes a law to exempt transactions prior to a certain date, a lot of people are going to owe back taxes and penalties if not jail time.

Simple solution: Become an expat.

Does not apply to US citizens unless you give up your citizenship.

That's right, you still have to pay !

That's really just another reason to renounce citizenship.

Does the US not have double taxation treaties though? In some places you can just create an offshore company, tax your profits in a different legislation, and then be exempt from further taxes under your own legislation due to the treaty as you've "already paid them" (even if the taxes are as low as 2% or even 0%).

There is really no good loophole. They have locked it all down. What you describe would be a "Controlled Foreign Corporation" which has it's own issues. Giving up citizenship has an exit tax plus they will still come after you years later if they find out you didn't pay what you owed.