Quote from: seriouscoin on March 27, 2014, 03:08:59 PM

Can you elaborate on this? How is it 0%?

If you hold coins for 2+ years they get taxed under the capital gains tax rates. The rate you pay is based on your income plus your capital gains, 0% up to a certain amount, 15% after that, and 20% if you are rich. Ok let me try to explain.

For a married couple the 0% capital gains rate goes up to $72k, less if you are single. So let's say that your income is $50k. You pay your income taxes based on that. Now let's say that you sell some bitcoins for $40k that you bought for $10k. So that means that you have a $30k capital gains (40 - 10).

So we start piling your capital gains on top of your income. You take 22 of that 30 to go from $50k to $72k. You pay 0% on those capital gains. The remaining $8k is taxed at 15%.

Let's say that you have no income, just huge numbers of bitcoins. Every year you spend/sell enough to make $72k and live on that. 0% tax rate.

I don't understand how taxes on foreign currencies work, but it seems like it is 23% if you keep good records and 35% if you don't. Much worse than capital gains.

When you die all capital gains are zeroed out. So let's say that I buy a bitcoin for $600 and die, leaving it to my son. Now the bitcoin is worth $100000. No capital gains on that. If my son holds it for two years and then sells the coin at $101000 he has a capital gain of $1000, which is going to be taxed at 0%.

So basically capital gains taxes are 0% if you hold your coins long enough and if you don't make too much at your day job. I think that this describes most people who hold coins now. If not, there are legal ways to avoid taxes that become feasible when you start talking about big money.