Ninjastic
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Re: It is now next to impossible to spend bitcoins legally if your american
by
Robert Paulson
on 26/03/2014, 20:34:42 UTC
Quote from: RodeoX on March 26, 2014, 08:26:27 PM
Quote from: Robert Paulson on March 26, 2014, 08:13:46 PM
Quoting from http://www.bloomberg.com/news/2014-03-25/bitcoin-is-property-not-currency-in-tax-system-irs-says.html

Quote
Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of gross income for the coffee shop.

so now anyone who is taxable by the IRS and wants to buy something with bitcoin must check if he owes capital gains to the IRS.
land of the "free" indeed...
Can you name me any transaction that would not be taxable? All commerce is taxable.

Your calculation is not quite complete. The only way you would owe $1 on your coffee is if you had realized a huge profit. You owe a percentage of your profits. Lets say it's 20% (it could be less or possibly more). So if you bought a bitcoin for $1 and then it rose in value to $5; you owe $1 in tax on the gains. That is still a 300% gain after taxes. I would definitely enjoy drinking that cup of coffee.

the amount of taxes needed to be paid is not the point.
its not reasonable to expect people to start looking up what the exchange rate was when they received their bitcoins just so they could buy a cup of coffee without breaking the law.