Re: So are all these people paying CGT on cars they're buying with BTC?
Capital gain only counts when you cash out to fiat, currently there is no clear rules when you exchange it with goods
This is challenging for accounting. Imagine that you spent 100 coins at the beginning of the year ($1500) in your business and get a return of 10 coins at the end of the year($9000), then your result is a loss of 90 coins, you should get a tax deduction of 90 coins, which is $81000
However, if counted in USD, you have a net gain of $7500, so you have to pay income tax...
This is challenging for accounting. Imagine that you spent 100 coins at the beginning of the year ($1500) in your business and get a return of 10 coins at the end of the year($9000), then your result is a loss of 90 coins, you should get a tax deduction of 90 coins, which is $81000
However, if counted in USD, you have a net gain of $7500, so you have to pay income tax...
Oh really!
Have you ever dealt with Capital gain tax?
Also I loved the part about exchanging fiat to goods.
This guy is right. Whenever you exchange Bitcoin for something of value, you MUST pay either income tax or CGT.
See: http://www.bitcointax.info/
Do not get your ass audited, it SUCKS.
Quote
Example 2: Satoshi Nakamoto purchases 1 BTC for $100 on April 1, 2013. A day later, 1 BTC is valued at $200. Later that day, when the value of 1 BTC has not increased, Satoshi exchanges his 1 BTC for a detailing job on his car that has a fair market value of $300.
Conclusion: Satoshi has realized $300 of proceeds and $200 of gains that must be reported on his tax return for 2013.
Conclusion: Satoshi has realized $300 of proceeds and $200 of gains that must be reported on his tax return for 2013.