Search content
Sort by
Showing 20 of 36 results by iambk
Re: It is now next to impossible to spend bitcoins legally if your american
I dunno about you guys but I'm going to continue mining my bitcoins and using my bitcoins and selling my bitcoins locally for cash without putting it on my tax return UNTIL I see some way for them to POSSIBLY track it in ANY way or a benefit to me for paying them.
The "you pay your taxes or you risk being found out and fined much more than what you would've had to pay" doesn't make sense to me here because the 'risk of being found out' IMO is 0% unless they waste millions trying to figure out how to track it, then enforce even heavier regulation on the few that actually have or use or want to use bitcoins.
Frankly it's not worth it at this time for any government, and by the time it is, it'll be too late.
Maybe in a few years I'll change my perspective...
The "you pay your taxes or you risk being found out and fined much more than what you would've had to pay" doesn't make sense to me here because the 'risk of being found out' IMO is 0% unless they waste millions trying to figure out how to track it, then enforce even heavier regulation on the few that actually have or use or want to use bitcoins.
Frankly it's not worth it at this time for any government, and by the time it is, it'll be too late.
Maybe in a few years I'll change my perspective...
If you get audited and they look at your bank accounts and assets will there be anything to show that you've purchased or mined or sold bitcoins? Do you have a regular job or other significant source of income? Do you have KYC forms at any of the exchanges where you traded? If the IRS interviews your friends will any of them know you've invested or mined BTC?
I agree that risk of getting caught can be mitigated but for many people there might be a little denial if they think the risk is zero. Maybe you've done an awesome job and the risk of getting caught is zero.
Regardless I do agree that most people won't be reporting BTC profits.
I however will be reporting BTC loss since I got goxxxed.
Wow, I'm really impressed! Didn't think this needs an official announcement.BTW, who decides what a competent authority is?
Apparently an incompetent authority in this case.
If I sell btc on a exchange I will report it. I will not be reporting any capitol gains from anything I buy with btc. As far as the IRS will know my bitcoins will remain forever in cold storage. They simply can't monitor this..
likewise people living in states with a "use tax" usually don't report their Amazon purchased and pay said use tax.
That doesn't mean it isn't the law to pay use tax in some states though.
Re: It is now next to impossible to spend bitcoins legally if your american
That cup of coffee is going to have its price pegged to the dollar rather than BTC. Perhaps you'll get a receipt when purchasing that cup of coffee that shows the USD/BTC exchange rate that was used for the transaction.
Anyway, no such thing as a free lunch, eh?
Anyway, no such thing as a free lunch, eh?
LouReed, when you log into the read blockchain website do you still see a wallet that sent 2 btc today? That 2 btc only went into the wallet 7 days ago and you didn't send it so maybe you didn't really lose 2btc.
CampBX was never "in".
I have been using them to trade since 2012 but i notice a disturbing trend with their servers lagging out, You would think 3 years would be long enough for them to get their shit together and provide a decent service but i guess that is too much to ask.
I say them not giving a shit about their own service and loosing their bank is pretty good sign CampBX has 1 foot in the grave.
I think the guy that started CampBX had a lot of enthusiasm in the beginning but got in over his head and probably never got the trading volume he expected and therefore probably isn't making any money. I suppose it is probably tempting to "borrow" BTC from the corporate assets (eg customer accounts) just to "get by."
I transferred all of my BTC out of CampBX and moved it into mt.gox. Clearly moving it into mt.gox was a mistake but I still stand by my decision to move my coin out of CampBX.
What if this property is moved oversea and never exchanged at home country? If people avoid centralized exchanges where all the bitcoins can be traced to person, then there is no way to properly identify the ownership of each coin
Assuming the property is held by somebody in the US then they are subject to capital gains tax regardless of where the exchange is done.
Are there ways to hide income? Sure. But now you're probably also guilty of tax evasion and maybe money laundering. Does it matter if you don't get caught? I guess that's for you to decide.
The IRS depends on taxpayers being honest. Many aren't honest. Most probably don't get caught. Some do.
The IRS has simply given us their interpretation of how the existing laws apply to bitcoin. The IRS has said nothing about the practicality of enforcing these laws. These IRS statements give the taxpayer and the IRS auditor guidance. If you follow these IRS guidelines you aren't likely to have any legal complications. If you decide the IRS is wrong and you do get caught then I suppose you could probably bring the IRS to court but it'll be an expensive and uphill battle.
Personally I assumed BTC was subject to capital gains long before this.
Personally I assumed BTC was subject to capital gains long before this.
That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.
It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API. The databases exist for free of charge, and you most likely have a computer that could run such a script.
please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.
You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.
FIFO requires a ruling from the IRS for your company... It would put you on the radar.
what?
All I'm saying is that you can pick yourself which BTC purchases match up to which BTC sales, just like with stock.
No you can't. It's LIFO.
My understanding is that stocks are taxed FIFO unless you designate to your broker which shares you're selling at the time of the sale. If you designate at the time of the sale then you can pick whichever shares you want.
With BTC there isn't a broker so I assume you simply need to document your decision but I'm not a tax lawyer so I'm not really sure.
That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.
It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API. The databases exist for free of charge, and you most likely have a computer that could run such a script.
please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.
You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.
FIFO requires a ruling from the IRS for your company... It would put you on the radar.
what?
All I'm saying is that you can pick yourself which BTC purchases match up to which BTC sales, just like with stock.
A capital gain is a capital gain. I don't think the IRS much cares if it is a pain in the ass for you to calculate.
I imagine they care about as much as I care that their tax laws will soon be virtually impossible to effectively enforce.That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.
It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API. The databases exist for free of charge, and you most likely have a computer that could run such a script.
please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.
You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.
That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.
It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API. The databases exist for free of charge, and you most likely have a computer that could run such a script.
Agreed. If there is a demand and especially if people are willing to put up a little BTC for it then I'm sure programs will pop up to pull the exchange rates and help do the needed calculations.
So what happens when you sell? You have accumulated coins over the months, but how do you know which particular coins you are selling? Maybe you're selling 5% of the coins you mined at $600, 2% of the coins mined at $630, 6% of the coins you mined at $510
Do you see where I'm going with this?
Do you see where I'm going with this?
Those amounts are regular income taxed at regular income rates. Your mining pool, if complying with US law, is required to report these transactions to the IRS if they exceed $600 during the year.
The profits that you gain on holding onto them are taxed at a lower capital gain rate. Your exchange, if complying with US law, will have to report the sale of your of your bitcoin if it exceeds $600 during the year.
If the IRS audits you, you will have to come up with documentation that explains the reported transactions.
That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.
This isn't like stocks where you get a nice report from your broker for the exact shares you owned, and which block you sold at EOY.
Years ago we didn't have tax programs that downloaded all of that data directly from our brokers.
A capital gain is a capital gain. I don't think the IRS much cares if it is a pain in the ass for you to calculate.
On the other hand, the day the IRS can tell me how much wealth I have in my (vastly larger quantity) brain wallet is the day I pay taxes on my true wealth.
Spoiler: This day will never come.
Spoiler: This day will never come.
Unless you mined those coins in your brain wallet yourself, the IRS doesn't really care what you have in it until you convert it back to fiat. That's when you calculate your capital gains.
Wrong.
Read the ruling.
My $.02.
http://www.forbes.com/sites/kellyphillipserb/2014/03/25/irs-says-bitcoin-other-convertible-virtual-currency-to-be-taxed-like-stock/
For those buying and selling Bitcoin as an investment, calculating gains and losses are figured the same as buying and selling stock. The basis, the holding period and even the triggering event (the sale of the asset) are all very clear.
I have stocks and I don't pay any tax on them until I sell those stocks. My understanding is that it works the same way with conversion of btc to fiat. This is what I assumed before this IRS guidance even. But maybe I'm misunderstanding.
"Q-
8: Does a taxpayer who mines virtual currency (for example, uses computer
resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8:
Yes, when a taxpayer successfully mines virtual currency, the fair market value
of the virtual currency as of the date of receipt is includible in gross income. See Publication 525,
Taxable and Nontaxable Income
, for more information on taxable income."
Not me, THEM!
Have a nice day!
My $.02.
You're right when mining things are different. Maybe I didn't specify that clearly. I was only speaking to people that purchased BTC as an investment.
Those amounts are regular income taxed at regular income rates. Your mining pool, if complying with US law, is required to report these transactions to the IRS if they exceed $600 during the year.
I don't know anything about the current mining pools, but it sounds like mining pools may now have incentive to distance themselves from the US so that they don't need to bother with US law. I really don't know how the whole thing is setup though. Regardless, it'll be interesting to see.On the other hand, the day the IRS can tell me how much wealth I have in my (vastly larger quantity) brain wallet is the day I pay taxes on my true wealth.
Spoiler: This day will never come.
Spoiler: This day will never come.
Unless you mined those coins in your brain wallet yourself, the IRS doesn't really care what you have in it until you convert it back to fiat. That's when you calculate your capital gains.
Wrong.
Read the ruling.
My $.02.
http://www.forbes.com/sites/kellyphillipserb/2014/03/25/irs-says-bitcoin-other-convertible-virtual-currency-to-be-taxed-like-stock/
For those buying and selling Bitcoin as an investment, calculating gains and losses are figured the same as buying and selling stock. The basis, the holding period and even the triggering event (the sale of the asset) are all very clear.
I have stocks and I don't pay any tax on them until I sell those stocks. My understanding is that it works the same way with conversion of btc to fiat. This is what I assumed before this IRS guidance even. But maybe I'm misunderstanding.
On the other hand, the day the IRS can tell me how much wealth I have in my (vastly larger quantity) brain wallet is the day I pay taxes on my true wealth.
Spoiler: This day will never come.
Spoiler: This day will never come.
Unless you mined those coins in your brain wallet yourself, the IRS doesn't really care what you have in it until you convert it back to fiat. That's when you calculate your capital gains.