Quote from: rpietila on March 31, 2014, 02:30:23 PM

Quote from: AnonyMint on March 31, 2014, 02:07:31 PM

Quote from: rpietila on March 31, 2014, 01:40:57 PM

A wallet that tracks your fiat cost base is important to develop so that U.S. people can pay taxes, but "discussion" about it among people who don't have the capability to make it (not to say it is difficult because it is a standard requirement for enterprise accounting since 1800s) is moot.

The issue is not just record keeping and calculation, but also planning and timing. The timing on planning interferes with the timing-fungibility of money. This is one of the reasons why investments are not money.

He missed the point. If everyone has to factor the timing of tax planning into the timing of spends, then money sometimes loses the main reason it existed, which was to remove the gridlock caused by barter due to mismatches of the timing of what trading parties wanted to trade. For example, you want to buy that $1000 item, but this would move you into a higher tax bracket for the year, so you must wait until after Dec. 31.

You set up your wallet software such that it automatically spends the last earned coins, which makes it a wash generally (or yields a small gain for which you need to pay taxes and be happy that you get to keep about 60-90% of the purchasing power that would have been 100% lost to inflation in the case you had been using USD instead of Bitcoin). This is similar to using currency.

If you are spending more than you earn, then your wallet spends the coins that were accumulated earlier, in which case you suffer a larger tax hit. This is similar to selling your investments for profit, and paying taxes.

Can someone else explain why this is the end of Bitcoin because I fail to see it?

You still don't get it. It may have nothing to do with minimizing BTC gains.

The issue is that tax law is complex. For example there is a $1000 Tax Credit where if you earn less than a certain amount or more than another higher amount, you don't get the credit. So it happens that you are ready to spend BTC on Dec. 23rd for Xmas gift, but it would push over the bracket and you lose $1000. So you need to decide to not spend until Jan 1 (much too late for Xmas). Thus Bitcoin wasn't money for you.

Quote from: jmw74 on March 31, 2014, 02:57:10 PM

I never had to do that with dollars." THAT'S BECAUSE YOU HAD NO GAINS BEFORE.

Read my post above this one, so you can have an epiphany.

The issue is that gains impact tax brackets and credits and all sorts of tax planning.

So you can't just take all the gains you can get.

You have to restrict yourself to scenarios.

This ruins the timing of being able to spend money when ever you want to.

At least this is how impacts some people. Maybe your tax situation is different and you take all the gains you can get, because you are in an investor class. But the common man is not. He has all sorts of things to balance, such as reporting his unemployment assistance, tax credits, solar installation energy credit, alternative minimum tax, etc....