Quote from: DeathAndTaxes on April 30, 2012, 10:53:49 PM

Quote from: paraipan on April 30, 2012, 10:18:39 PM

I still don't get how there is any "tax liability" in there but will follow on this thread and try to learn from others.

Because the govt taxes TRANSACTIONS. Transactions are "usually" in the form of fiat but making them not in fiat doesn't erase the tax liability.

Say Joe The Plumber is flexible and you need pipe repairs worth $300 done.

Joe The Plumber could accept $300 USD (fiat)
Joe The Plumber could accept 9 years of VPS hosting worth $300.
Joe The Pulmber could accept Gold coin worth $300.
Joe The Plumber could accept 60 BTC (worth $300).
Joe The plumber could accept 100 gift cert good for one Burger King Whopper each (worth $300).

In each instance a $300 transaction has taken place. Joe has gained $300 in taxable income and if the state charges a sale tax then sales tax is due on the $300 each.

Bitcoin doesn't make that magically go away and making it a digital commodity has absolutely no relevance (according to the IRS and state agencies).

Wait moment...

Quote

Because the govt taxes TRANSACTIONS...

people already pay a taxes on their income and assets, and now you tell that we pay a tax when exchanging those same assets between us ?