Topic: A Bitcoin Scenario - Opinions? (Read 776 times)

I do not know how it works in the US, but this would be very unlikely to work in the UK and so I think it would also be unlikely to work in the US.

Cryptocurrency is actually making your scenario more complicated than it needs to be. Your scenario could operate with just cash.

The issue at stake here is the taxes you are trying to avoid paying. Here, if you bought a house with cash then you have to get the title changed over to your name which involves interacting with the land registry. They will want to know how much you paid for your house, and from that will calculate how much tax you need to pay to the government (Stamp Duty Land Tax).

Now, as I say, you don't need cryptocurrency for people to have been trying to find innovative ways around paying SDLT. People have tried everything, from under-reporting the value of the house, to buying it as a company that then re-sells it immediately to themselves for a lot less, and so on.

HMRC (our IRS) is very successful at investigating this type of thing.

Bringing things back to Bitcoin. With Bitcoin there's a blockchain that publicly records all transactions. I don't rate your chances of being able to hide a transaction of this magnitude with Bitcoin if you could not do it with cash. If people start doing this at any scale then the forensic accountants will learn how to research the blockchain.

If you were prepared to live a very extreme existence then I'm sure you could avoid almost all taxes, but you would be doing it on a small scale and living on the edge of society. I don't think Bitcoin really helps you avoid taxes except on a small scale.

After all, the biggest tax avoiders in our society are not anarchists but are the establishment themselves.

Bitcoin is lots of things to lots of people. Only some of them are anarchists and/or libertarians.

If I go and buy $250k worth of bitcoins and then buy a house with $200k worth of those, then the seller would have to fill out a 1099 for receiving over $600 worth of a commodity.

For your tax purposes you have gained nothing and do not have to claim any income.

Now, if you had bought the bitcoin for $50k and it appreciated to $200k you would need to claim $150k as income when purchasing the house.

If instead he "donates" the house to you, you would then have to claim it as $200k worth of income. If you are a charity then you would have to deal with a $200k donation.


However...using the IRS code, there are ways of making a $150k gain in a year something less, spread over many years. All legally of course. And I am not a tax lawyer yada yada yada...

Right

Tax scams are a bad idea.
Taxes are for the greater good, please pay as much as possible. 

I'm not wild about the anarchist characterization.  I prefer to view it as a way to transfer funds in a more cost effective system.  Sure, there are rebels here.  One must tune out some of the derogatory anti-government remarks and concentrate on the true genius of this system.  Yes, the modern world has turned into a nanny state proclaiming the government must approve before yada, yada, yada...  If you've been inside government (or are) then you know very well the groups that influence the decisions made by those respective agencies.  And many of them have Inc., LLC, or some other incorporation status behind their names.  I expect that a battle against Bitcoin is in the back of their minds and not quite on the horizon.  When that comes, who knows?  But imagine the possibilities!  This is historical, revolutionary, and so necessary!

Hi. I just want to expand on something. The thing about bitcoin(and other crypto currencies) is that it cannot be controlled by any central authority(banks and governments) or organisations(big multinational businesses, criminal/shady groups) or individuals (multi-billionaires). What all of these have in common is that they have tonnes of money as well as special interests in keeping their wealth so they see bitcoin as a threat to their wealth therefore Governments are likely to want to ban bitcoin(people can also be pulling the strings behind the scenes for Governments to align with their interests).

Taxation is not going to work, how do you tax someone's transaction that doesn't have a name behind it, the only fee you will be paying is into the bitcoin network for miners to discover in a block which is tiny compared to paypal or bank transfers. Of course a government needs to get its money from somewhere to pay off its debt and it's everyones responsibility to keep a country up on its feet by paying taxes otherwise shit will go down. Another train of though is deal with the problem now because later the consequences will be a lot greater so someone investing in bitcoin is not going to be effected by a dollar crash or a recession and high inflation.

The next thing after trying to tax it and failing is a ban to try and restrict it and decrease its value so it doesn't get adopted by too many people. In doing so it just proves how much of a threat it is to current wealth holders, everyone knows the statistic of the top 1% owning 40% of the world's monetary wealth. It is absolutely ridiculous when you actually think about it and the wealth keeps on concentrating in that top 10% every year. This is a war on people who see bitcoin/crypto currency as a way forward.

If not bitcoin then another crypto currency will be the future, right now it is in its infancy as a new technology and in this world people are skeptical/don't want to let go of what they are used to. It doesn't help that you see a lot of negativity about it in the news, but in the end its just stalling what is inevitable. It is something that is the currency of the rebellion against the current system that is built on debt and fails to look after everyone, you would think that with the technology we have developed as a human race would stop world hunger/poverty for good if not for the materialism, consumerism, greed and competition that is encouraged in our society under this monetary system.

I'm just tickling your brain, there are people who know a lot more than me but nobody has the ability to predict the future and as far as bitcoin is concerned its value is dependant on its users unlike the dollar value, which is controlled by the government and backed by men in guns. Any logical person would support a user dependant currency rather than man with gun to your head, shouting at you like a little insecure child, telling you what the currency is. But hey the majority of people don't know enough to make a choice or aren't in a position to do so, they are stuck beneath man with gun.


That sounds good, its nothing new, in fact its easier to avoid the tax burden than donating a suitcase full of cash in exchange for a house which is also possible.

Unless Bob is registered as a non-profit, the "donation" is income.  If he can't prove he's a charity to the IRS, then he is in trouble.  Also Joe gets in trouble if he tries to claim his "donation" as a charitable contribution on his taxes.

I'm scared of Bit coin.  We need a Quantum safety net SHA-512 safety net add on (I'm developing HorseCoin)

I have 200k of Bitcoin, you have 200k of house.

I exchange my 200k property (bitcoin) for you 200k property (house), neither has gained or lost.

Nothing to see here Mr taxman move along >>>>>

At least in a fair and just world that should be the way that it works.

But...................

Edit : Welcome to Bitcoin World, its always nice to here of a new girl on the Block 

Really? Nobody on this forum has an opinion?

 

Hola everyone, new girl here just learning about bitcoin as an alternative currency. I have a couple questions but will keep browsing first. For now, I have a scenario and wanted to get feedback, both pro and con, just to get a better understanding of how pervasive bitcoin may ultimately become (or not!).

From what I (think I) understand is that the point of bitcoin and other cryptocurrencies is a form of digital anarchy against our current bank & government regulated currencies in whatever country, so that the more people who take up, buy into, invest, bitcoin and/or other alt currencies, the less control and intrusion the government has over the people.

Anarchism and free market aside, it raised this scenario in light of the recent IRS ruling of virtual currencies as property that is subject to gains taxation...

What would happen if people started going about transactions this way:

Joe has amassed the equivalent of $250k usd (for the sake of argument) in bitcoin. Joe engages a $200k valued transaction of bitcoin to Bob for payment of a 3 bedroom house. At some point one or both would ultimately have to divulge the gains info to the IRS if it's cashed out. What happens if, instead, the transaction is entirely made via bitcoin and Joe donates said property to Bob on paper, thus the transaction happens, wealth is transferred, property is transferred, but on paper for the IRS, it's a donation or charity or some such thing.

I'm going to reasonably assume that the IRS would consider it foul and unlawful (anything that benefits society is illegal, we get it) but as a factual transaction how would this be handled, do you think?

Would it be a "thing" for people to make the value transaction in bitcoin, anonymously, and undercut the tax burden by writing it off as a donation?

Thanks for your input.