Topic: Bitcoin Is Property Not Currency - page 3. (Read 14762 times)

If the IRS thinks all your receipts look legit, they won't investigate further. But if anything looks suspicious, they will investigate a few items and see if your story is true.

For example, if you write on your taxes that you gave $1,000 in charity to your church (a tax write-off)... if the IRS audits you, they will ask you for your receipts. You tell them you gave cash, you have none. They will then ask for the name of your church. They'll follow up to see if you go there regularly. If the pastor knows you, they might think your donations are legit. They won't trace further than this, they'll trust you.

However, if they ask your friends about your church, and they say you don't go, and the pastor never heard of you.... well the IRS will get upset, and charge you with fraud and fine you.  They will then investigate deeper everything on your taxes, and audit you for previous years, and also audit you repeatedly in the future. YOU have to prove that you gave $1,000 in charity to your church, not the other way around. If the IRS is just suspicious, that's enough for them to charge you.

(If you wrote that you gave $50 to your church, however, they won't even think of pursuing it, so how MUCH money matters a lot)

It will soon be very easy to ensure that you are fully compliant if you choose to.  Check out ZGL wallets for one idea: https://bitcointalksearch.org/topic/zgl-wallet-achieve-zero-gainloss-for-tax-purposes-with-coin-control-531135

I agree, this is a big problem, but the real problem here is that reporting any transaction where both parties havent identified themselves and are being monitored by a 3rd party may open onself up to being charged with tax evasion.

This could be a good thing ya know?

When you have a garage sale, do you hand all your customers a legal document asking for their name and home address?

Receipts are proof of nothing though, i could fabricate them all day, are simple unprovable records all auditors are looking for, or do they require proof, and if so what proof could you possibly give them that you sold your tv for $200 and not $800, or that you sold your tv and not an ounce of weed?

If you move your money from one bank account to another it's still your money.   If you're asking can they track it and can you evade paying taxes, probably not a good question to ask or something to even think about doing.   We're all too pretty to go to jail...

Ok for one thing, this is just going to open more illegal businesses and people are gonna find a way to avoid taxes, What stop an american from say Im in Europe and I have USD cash.  people can even exchange cash even right from home.  This is honestly really silly, they inventing a new term for bitcoin when it was already established by us to be a currency.

well imho you could comply with say alt-coins there are sites where you cash out to usd same day say..would provide a paper trail
again imho big farms can prob keep track of how much usd btc per day they make and then they prob convert it all to usd .then
after the fact they may invest in btc but have to have an accounting trail

us puny types are not gonna go and keep track each day .0003888 btc and/or keep track of spending a mined bitcoin in 2009
that was made for like 1.11 and then buy a 600 buck tv and be required to pay capital gains on 598.89 usd...too cumbersome..
but then if 'big money banks or whatever" wanted to muck up bitcoin i can't think of a better way to cloud the waters then what the
IRS did a couple days ago

anyway my point is if you are supposed to 'mine' coin and it is like added to your 'gross income' and you more or less convert it
to cash right away (could use the web site for your transaction record) keep track of how much ...add it to your 'gross income"
as CASH for the year you'd prob be ok..on your normal income with your normal taxes as a side business
....if you converted it too bitcoin directly imho and wait a year 20% capital gains less then 1
year to cash it out i think it is 43% again the above is in the USA with latest IRS plug on what to do....well that seems
cumbersome and the temptation to 'hoard' the coin on speculation that btc is gonna go back up etc etc

mentally just go to a pool that mines the more profitable alt see how that goes on all this for a bit to cash out directly
btc equip imho are gonna be so short on lifespan this summer vs price...that alpha 16mh miner and the titan i have coming
yet hopefully as stated (now 250mh) by aug would show IRS it is a 'legit' business not a hobbs cash flow wise and
likely would make more then i would lose (again this is me ...and i want to mine for something to do....and it can
be modest return even thou more work...others likely have better ideas in this realm)

so just shoot it straight to cash like the IRS wants daily transaction record is their on the www you pool or cash out on...site...and do all the other
'business type things" you can by being legit ..right off inet costs,elec costs office costs equip costs training costs travel costs deductions
etc etc

end of the year you have more $$$ then you pay in taxes by 75% say of the gross total mined you are golden..sure 25% gone
but hey if the boat floats and you make a modest 'gross income' profit what the heck...need a break btc up/down sideways lately
makes me dizzy...go back to the basics "eat what you kill" day by day cashing out see how that is for my sanity in mining if lucky
i can find something to pump/dump on alts into next year.....(sorry cash flow is vicious don't ya know)

and i suppose if this does work with the titan and alpha asic alt-coin units..then somewhere around nov KNC will announce its
TITAN mining farm ...(I"m just postponing the inevitable don't ya know) what the heck its only money but a fair amount
above ROI for all the busness expenses i listed eventually would be nice!

so if i do mine this year i will look at it as "income" directly.....as an actual business like i'm selling shoes

i think you are ok in that manner...letting the IRS know about a hypothetical stash of 100000 btc you are supposed to pay
at the value to the day and min you mined them in 2009 till now so they can tax you  on it....er not so much ..in my more
modest case the BTC can turn to dust in paper wallet form first (good to have a goal)

but to pay say 25% toward the "income" from mining then goes to BTC the day it was mined.....then you have to keep track of that
and the cost that day of .00008888 etc ..then end of 1 year you can convert the bitcoin for the joy of 20% capital gains (hopefully grew)
by that time...screw that don't need the mental pressure ....just mine alts ...hopefully run the equip longer and play

again i'm wrong i'll be chasing down ant-miners at a very resaonable price or some such if calcs work this sujmmer

screw it...cash out immediately the day you mine it...no capital gains.....use all legit business deductions...if you end up with 5-9k
more gross $$$ at the end of the tax year and after taxes your are fine legit and golden to the IRS
 and like in my case you have to pay 30% on that money state and fed taxes...sucks but worth a shot even if i don't quite make
ROI (i bore easy need a hobby)

what the heck it is an income stream

myself i've never touched a BTC to spend I"ve made so i'm gonna sit this bitcoin mining out till this is resolved and just do the
above........it is what it is....(of course they take btc in germany i could have a VERY NICE vacation heh


if i'm incorrect and this is resolved before summer there will likely be plenty of T1 miners about at a reasonable non-pre-order
price i can go back to hoarding btc with the old 20% capital gains in mind


why not do this with BTC equip? ....(single ltc asic) the ltc asic MAY last with elec use into next year (i'm sure i can mine something
in alt at 800watt power supply use for a titan.) and the beast will plod along much longer then a neptune imho competeting
against knc and others large GH farms already nearing completion  ..irregardless of the btc price dump here lately

with deductions for elec a/c equip etc ...i will LIKELY make cash flow and get equip ROI but it will be very modest...likely back to
hobby mode...but want to mine...and an't prob ever gonna be able to mine a legit machine again when the next batch fall comes
around and they have creeped up to 25k or some such ....and knc annoucing its giant TITAN mining farm in the fall..sigh

so back to playing/hobby (why i orig got my jupiter from knc when it was 150gh a coin ..expected 6-7 months to pay it off..and
maybe cash flow my home utils incl the elec for the miner for the next 8-9 months) so it goes ...stuff to do..

so sitting on BTC waiting using this modest miner project "not to go crazy" got to do something and i don't want a bass boat!


as always i am likely very wrong on all this consider doing the opposite for best results

Searing




it is the transactions of the merchant etc etc the cumbersome nature of all this in the USA and IRS rules....other countries no problem (envy)

i think it will really depress the price of the coin and the number of miners will go down in usa big time

why deal with all this gross income stuff for mining when you can just buy bitcoin and pay 20% capital gains on it after 1 year...guess we will end up with
leaving mining to China Sweden Canada etc

yeah the neg press and roadblocks are epic with the clusterf***k as it exists now

likely summer it will be just all coins BTC  pay 20% capital gains after 1 year.but still next 3 months is gonna be FUD IMHO

again i know zip but my take/bet on stuff and or process or whatever you want to call what the hell i'm doing just want to mine
before the whole thing goes virtual mining or speculation seems the trend

as always don't know zip my take on this from a "play with a miner i can get and make $$$ ROI point of view" not the most logical direction

Searing
 

You say so and I like very much the same

The difference is your stock broker sends you documentation of your trades and cost basis (the good ones were already doing this years ago, I believe now there is some law requiring it.) E*Trade sends me a document and I give it to my accountant, it's really not that difficult or time intensive.

This is EXACTLY what day traders of stocks do. They have to calculate each buy and sell (which they do hundreds of times a day) and report it all at the end of the year.

I'll reach out to overstock.com and see if they will tell me how they plan to handle this. It should be interesting and might shed some light on this.

yep that is what you are supposed to do.....same for trades...it is unworkable ..it prob will get resolved in our favor but i suspect with bank and other powers pushback
that won't happen in the usa till sometime the middle of summer...we will likely lalygag in this morass till then imho

but by then BTC will prob be like 200 bucks if we are lucky..would you take
BTC with the IRS spewing all this idiocy...miners will ignore it...but merchants can't imho

Searing

What you say is very reasonable, they should think so

The bigger problem (in my opinion) is that even if people WANT to comply, it may be difficult or impossible to do so.

If you made a ton of micro payments over say the course of a year when the bitcoin price was rising relative to usd, what are you supposed to do, go back and find the exact capital gains of each micropayment and total them? That's what they are implying and few people are going to do that.

problem is if a 2009 coin is treated different if spent in 2014 then a 2014 coin bitcon can't be used as a currency..it is like trading different land values that shift day to day for a walmart TV set....some days you pay capital gains with your mined coin some days less then

of course this is unenforceable ..but just saying

but the end result is btc loses any way to be used as a currency and thus if it can't be used as a currency then the underlying value is 'moot' because you are just mining virtual realestate that no longer has a function ..the movement of virtual currency....only thing you are doing is running in circles in my view hoarding 'imaginary coins" that you can't move use in a reasonable manner..so why bother ..if it is why bother in using the currency of BTC why bother to mine ..then the value tanks

the use of BTC as a currency (does not even need to be an anon currency) is what imho 'floats the boat on price" with out that it is like collecting 'green stamps" (remeber those) you can do so but if no one takes 'green stamps' at the grocery store anymore the value tanks

likely this will get resolved these IRS issues to something like 20% capital gains if coin is held more then 1 year....but then again if you we're 'vested interests' like banking and wanted the gov't help on how to kill bitcoin by muddying the waters ..what the IRS announced the other day would be a perfect plan

so my option is to sit on my BTC till this all shakes out (likely) sometime next hear (hopefully not longer) and mine ALT-COINS with machines that MAY last longer in difficulty then 4-6 months like ASIC's are likely to have (at least in the short term) with all these massive GH farms gonna dump on the BTC network soon

and following the IRS rules currently ..cash out the ALT-COINS that day (your gross income profit according to the IRS) put it in CASH (and or BTC to speculate if you are brave knowing you will likely lose 20% to capital gains after 1 year ..think it is 43% if less then a year??? something like that)

tall up you "gross income at the end of they year by your "mining to alt-coin to cash" (some sites make this easy) ...see if you brought in more then the taxes you set aside at the end of the year...ie treat alt-coins and bitcoin as an "INCOME"

or at least till they get their act together in the USA (likely with hearings etc this summer)

then a guy will see if "power exists" to kill alt-coins via IRS and making it too clumbersome to use as an alternate currency (at least in usa) for that and/or mining
or some sensible notions rear there head and all coins are equal......(BTC etc) till you SELL THEM  and then you eat the 20% capital gains limit or some such when you sell for fiat

so i'm out of BTC for now gonna do the above and go day to day or close to it for cash and keep a record take off elec inet equipment ....depreciate miner if possible the whole 9 yards...if i'm wrong about all this and' it don't drag on i'll be able to (i'm sure) get some reasonalbly priced ant-miners or some such 1Th end of spring or summer and play with that also ..btc again i mean

but gonna be cash and carry for a bit (with the usual business deductions as stated by IRS in that i'm mining and making "gross income" from my little business in alt coins

man thing is at the end of the year do i have more $$$ then i put in hopefully then i took out...

but with KNC's GH farm and the large Farms gonna dump hash here soon I dumped my Q2 3TH Neptune at 10.2k usd .......even if they kick in more hash etc...KNC's own farm and others imho will make this unit obsolete in 4-5 months imho...tough if not impossible to get ROI

anyway probably hand sitting on BTC thru the summer

my 2c worth (my logic is likley flawed i admit...so feel free to 'guide me with your wisdom"

Searing
 

http://www.washingtontimes.com/news/2014/mar/26/irs-says-it-will-take-years-produce-tea-party-targ/

So is it Commissioner John Koskinen who has handed down this objectionable ruling? Is this the guy who should be getting his email box pounded? Seems like he doesn't give shit much about public opinion ...


I guess with rogue agencies you get rouge rulings and no longer operate under rule of law .... dyodd. Morally corrupt organisations probably shouldn't be supported but rather disbanded for the greater good.

The tax law never fundamentally changed,  the IRS has laid claimed a portion of your income since before you were born.  You accepted that responsibility by choosing to be born here. The invention of bitcoin never changed those laws.

If you had engaged in another type of economic activity, such as trading pink sheet stocks or some other niche commodity, you would be legally obligated to report your capital gains from that activity.  The IRS would still require you to document your trades, if you wished to defend yourself in an audit.   Dealing with bitcoin isn't fundamentally different from that.

It may seem like a onerous requirement to calculate capital gains on all your bitcoin transactions, but they are going to have apps for that that combine your wallet data with historical market data.  It will probably print you a form showing your short term and long term capital gains, and you keep the wallet data for your records, in case of audit. It's not that much different than having an interest-bearing money market account and reporting the gains via the form that the institution administering the account sends you at tax time.   Same thing for an "interest-bearing" bitcoin account, except there's no bank or institution administering it for you -- that's become your responsibility.