the 2018 tax code has a FIFO stock sale provision which will/could be applied to holdings of crypto's. what this means is if you have a long term hold of BTC and sell it, you can not assign the cost basis to that sale, it would be assigned to the first purchase.
Lets say you own 1 BTC with a cost basis of $100 from 2015. In 2017 you purchased 1 BTC at a cost basis of $5,000 and then the same day with no change in the price of BTC (not including the spread) sold 1 BTC to buy 100 ETH. Under the old rule, you would use the cost basis from the transaction that day, thus incurring no gain.
Under the new rule, the buyer of the 100 ETH would have to use the cost basis of the original BTC purchase ($100) , thus incurring a large capital gain of $4,900.
Im not a CPA but that is what i read into the new tax law provision
https://www.investors.com/politics/editorials/the-secret-tax-hike-on-investors-in-the-senates-tax-reform-plan/
Topic: Bitcoins and Tax (Read 9603 times)
And indeed the crypto currency will remain another currency from the regular currency, and it can be said as an alternative currency that maybe in the system payment of tax slightly different than the regular currency.
I myself do not knowing it yet exactly how the payment system, but I think.. probably this will be more simpler than the tax that has been applied to the regular currency.
I myself do not knowing it yet exactly how the payment system, but I think.. probably this will be more simpler than the tax that has been applied to the regular currency.
This paper explains the tax impacts clearly: https://scholarship.law.duke.edu/dltr/vol16/iss1/1/
You should pay tax for btc only if you are selling them for a profit . if you just buy and keep holding it there are no taxes. a capital gain tax is applied when a profit is incurred.
It's inevitable that countries would try to tax bitcoin, it's either that or ban it. But if someone only deals in bitcoin, how are the governments going to enforce that? That's the big question to me.
How do governments enforce income tax? How does government enforce taxes on any private transactions?
In the USA:
The I.R.S. No one wants to fuck with the I.R.S. Bitcoin is a general ledger, they literally can see every single transaction that ever takes place..
Steve completes a task or sells a service. Steve gets paid in bitcoin. Steve never reveals his real idenitity to his customer/employer. Wouldn't Steve have to be a moron to report his bitcoin earnings in this case? Or am I missing something?
Right now that is scenario very plausible, but more and more the technology is aiming to disrupt that as well. The ethical part of the transactions will be on every person and himself alone because today it´s just too hard to create a wallet for every transaction that you do just to keep the anonymity, but newly decentralized app wallets will do that automatically and will almost be impossible to trace the expenses of person on the ledger, plus many wallets will incorporate obfuscation and Lightning on their platforms. So, even now when most of the transaction can be tied to a person IRS reported that only 8% declared gains in cryptocurrencies, how will they handle the future. Let´s just wait and see.
Just so everyone knows, quickbooks won't process your echeck payments if they know you deal with crypto. Thoughts on this???
Probably afraid that laws are not precise enough and people can be targeted by gov agents eager to claim some money from unsuspecting traders and grab a fat raise before Christmas. It seems that the US law is currently protecting the government not the people. If I were in the US I'd refrain from selling my BTC for anything but cash and keep all my wallets on a hidden drive in case they decide to roll in with battering rams and handcuffs. 
Just so everyone knows, quickbooks won't process your echeck payments if they know you deal with crypto. Thoughts on this???
It is somehow possible that many governments are trying to put taxes on use of cryptocurrency to regulate its use but the miners , traders and bitcoin users will oppose such action for sure . The most important of bitcoin is that it is decentralized , and putting taxes on it will be like destroying the key feature of bitcoin .
Rivals will try their best to turn down bitcoins.
Rivals will try their best to turn down bitcoins.
In order to regulate Bitcoin they will add some taxes to Bitcoin acceptance. Government's always look for their benefits but they are not understanding what method we have to follow for Bitcoin taxes.
It is somehow possible that many governments are trying to put taxes on use of cryptocurrency to regulate its use but the miners , traders and bitcoin users will oppose such action for sure . The most important of bitcoin is that it is decentralized , and putting taxes on it will be like destroying the key feature of bitcoin .
Rivals will try their best to turn down bitcoins.
Rivals will try their best to turn down bitcoins.
In order to regulate Bitcoin they will add some taxes to Bitcoin acceptance. Government's always look for their benefits but they are not understanding what method we have to follow for Bitcoin taxes.
First of all no government can leave financial gain from any asset go unregulated. Otherwise, there would huge cash inflow in such high return yielding asset like cryptocurrencies and that is exactly what they don't want. They simply can't control cryptocurrencies but can only regulate it to some extent. Thus, they'll do it and I feel there is no harm in doing so. This in turn makes it a more trusted asset and cryptocurrencies still need that trust because many are still skeptical and regulations are needed for safeguarding public interest as well. So, on the whole it is kinda give and take relationship.
It is somehow possible that many governments are trying to put taxes on use of cryptocurrency to regulate its use but the miners , traders and bitcoin users will oppose such action for sure . The most important of bitcoin is that it is decentralized , and putting taxes on it will be like destroying the key feature of bitcoin .
Rivals will try their best to turn down bitcoins.
Rivals will try their best to turn down bitcoins.
Obviously, the government will exhaust and consider all of the possible means in order to regulate and impose tax on bitcoins due to the increasing number of users every day. Due to its decentralized nature, the government cannot impose tax, but the problem rises when an individual is paid using bitcoins as his/her salary. If he/she would send his annual income report, then he must disclose all bitcoin salaries thus making him a criminal for not paying tax. It is a very complicated process as no laws are specifically made for bitcoin. Therefore we must enjoy the benefits of it while still not paying taxes because I believe in the future, they will impose it.
It is somehow possible that many governments are trying to put taxes on use of cryptocurrency to regulate its use but the miners , traders and bitcoin users will oppose such action for sure . The most important of bitcoin is that it is decentralized , and putting taxes on it will be like destroying the key feature of bitcoin .
Rivals will try their best to turn down bitcoins.
Rivals will try their best to turn down bitcoins.
Reading today a post on onestopbrokers.com from the source theaustralian about paying capital gains tax on selling Bitcoins it seems to me that more and more countries are looking to control the idea of cryptocurrencies. Yes, on one part this is good not only for the "security" of these assets but also for the community in general but on the other hand it seems that the meaning of buying and selling crypto currencies in general but also paying with these assets for purchasing stuff is loosing the meaning of the idea of creating and possessing such assets. It seems that crypto currencies will be "another" currency like the others.
I don't know, maybe I'm wrong because I'm new to Bitcoin and crypto currencies but this is how I feel.
I don't know, maybe I'm wrong because I'm new to Bitcoin and crypto currencies but this is how I feel.
to pay tax on bit coin really it is good. because every day more people investing bit coin for selling or buying so if the government keep tax then that country economy growing to good. because then we have chance who using bit coin legally and illegally so tax on bit coin is very good idea. really i would like to encourage to this act.for paying tax improves that country growth so i like to help in my country growth.
Reading today a post on onestopbrokers.com from the source theaustralian about paying capital gains tax on selling Bitcoins it seems to me that more and more countries are looking to control the idea of cryptocurrencies. Yes, on one part this is good not only for the "security" of these assets but also for the community in general but on the other hand it seems that the meaning of buying and selling crypto currencies in general but also paying with these assets for purchasing stuff is loosing the meaning of the idea of creating and possessing such assets. It seems that crypto currencies will be "another" currency like the others.
I don't know, maybe I'm wrong because I'm new to Bitcoin and crypto currencies but this is how I feel.
I don't know, maybe I'm wrong because I'm new to Bitcoin and crypto currencies but this is how I feel.
to pay tax on bit coin really it is good. because every day more people investing bit coin for selling or buying so if the government keep tax then that country economy growing to good. because then we have chance who using bit coin legally and illegally so tax on bit coin is very good idea. really i would like to encourage to this act.for paying tax improves that country growth so i like to help in my country growth.
At the moment there's now way to impose taxes on bitcoin earnings. Unless you cash out at a bank, but then you just do it in smaller quantities.
That is why it is very important to develop trade with bitcoins. I'm sorry that the miners do not understand. In the pursuit of profit they do not understand that now they have to promote trade with bitcoins. To the point that you need to make free transactions for small purchases in online stores. Only the free circulation of bitcoins in trade can make the community independent. ... Unless you cash out at a bank, but then you just do it in smaller quantities.
This is a very bad idea.
https://en.wikipedia.org/wiki/Structuring
You can´t fly under the radar by doing this, banks are aware of structuring/smurfing and you
will get in huge trouble with your local tax collector and probably also face
legal consequences for tax evasion.
Depending on your country of residence you might have other options to cashout
your Bitcoins without paying taxes. But doing what you suggested is not one of them!
At the moment there's now way to impose taxes on bitcoin earnings. Unless you cash out at a bank, but then you just do it in smaller quantities.
Reading today a post on onestopbrokers.com from the source theaustralian about paying capital gains tax on selling Bitcoins it seems to me that more and more countries are looking to control the idea of cryptocurrencies. Yes, on one part this is good not only for the "security" of these assets but also for the community in general but on the other hand it seems that the meaning of buying and selling crypto currencies in general but also paying with these assets for purchasing stuff is loosing the meaning of the idea of creating and possessing such assets. It seems that crypto currencies will be "another" currency like the others.
I don't know, maybe I'm wrong because I'm new to Bitcoin and crypto currencies but this is how I feel.
I don't know, maybe I'm wrong because I'm new to Bitcoin and crypto currencies but this is how I feel.
For now the government in my country does not charge any taxes for every bitcoin transaction done, all transactions incur a fee for a very small fee. although bitcoin is still considered illegal by the government in my country, but its circulation is still permitted, as this is no regulation that regulates taxes for bitcoin transactions in my country, but if at any time the government has legalized bitcoin, it is likely they will attract tax from bitcoin.
Some notes on Tax confusion. I think this is all correct.
Long term capitol gains apply to coins held over a year. It is one of the cheapest taxes available. It is half that of income, which is 30-35%.
If the price goes down you can actually CLAIM A LOSS on your taxes.
There is legislation pending in the U.S. that will eliminate the tax on bitcoin purchases under $600.
For trading you will want to use some of the tax calculating software. Trading any currency is hard. In fact this is easy compared to trading fiat currencies. Welcome to global markets!
You can use FIFO, but you could also go with LIFO. However, whatever you start with you must continue to use.
http://www.diffen.com/difference/FIFO_vs_LIFO
Long term capitol gains apply to coins held over a year. It is one of the cheapest taxes available. It is half that of income, which is 30-35%.
If the price goes down you can actually CLAIM A LOSS on your taxes.
There is legislation pending in the U.S. that will eliminate the tax on bitcoin purchases under $600.
For trading you will want to use some of the tax calculating software. Trading any currency is hard. In fact this is easy compared to trading fiat currencies. Welcome to global markets!
You can use FIFO, but you could also go with LIFO. However, whatever you start with you must continue to use.
http://www.diffen.com/difference/FIFO_vs_LIFO
I can't understand how the IRS determines that your bitcoins are in the US? They can track only those dollars which are credited to your account. As far as I know the United States still do not recognize bitcoin currency. This means that your savings in bitcoin can not be considered income.
The US is one of few countries where dual citizens must pay dual taxes regardless of their primary residence location. That is to say that US citizens must pay the same US taxes on their income regardless of where it came from and/or where it resides. If there is an exception to that, it would likely be one where taxes where higher when money/income were not in the US. They also have plenty of other ways to track your income, for instance, any US-based exchange and likely any exchange in any in any of the fourteen eyes countries. Even trading outside of that jurisdiction doesn't guarantee they won't know, for instance, see the btc-e.com takeover landing page, where the IRS logo is present amongst other US LEA logos. Jump to: