Topic: BTC and taxes - page 3. (Read 2319 times)

i heard about long term capital gains is taxed less, but are you sure it's 15% for the first 400K ?

trust's have not been discussed and i have no knowledge how they work, can you provide an example?

This is correct. If the IRS thinks you are in the wrong, it is on you to prove your position. It is also on you to keep records and so if you can't show the source of your income, they will treat it as the maximum possible tax rate.


If this is treated as a barter then you will have received income of the value of the property, which will be taxed as income and might be more than using long-term capital gains.

If you originally mined your coins, then it's going to be income, but if you said you received them when the price was low then that's good news as your income will be low. However, between now and then the price has risen so there will be capital gains taxes to pay.

If you bought them at a low price, again, if you cash out you will owe capital gains taxes. The rate is banded depending on how much and how long you've owned them. But since it sounds like it's been more than a year, depending on your other income, you'll be able to get up to approx. the first $400k at 15% tax, and anything over will be 20%.

If you have only owned the coins for a year or less (or traded them during the year), then it is going to be taxed as income, up to 39.6%.

If you can't prove your cost basis in an audit, they will take the worst case, i.e. income.

There is no simple tax avoidance scheme if you just want the cash now but your accountant may be able to come up with ways to defer taxes depending on where you put it. Transferring into trusts, for example.

just to be clear, i'm not trying to evade paying tax. i want to pay and be in the clear. i just want to pay the least amount that's legally possible.

Do you have to cash out, all at once? If you released smaller amounts every year, it would be a more manageable tax bracket.

And I agree with you, once it's converted to fiat, it's taxable. {Capital gains etc}

You should go speak to them, and negotiate a reasonable payback rate, and factor in the tax, you would have to pay, and subtract it from your coins.

Trying to evade tax, would just end up wrong for you.

I would buy stuff for friends at discount, and cash in on the favor later. 

Yeah you could say that you bought it real cheap in the market when it was $2 but I don't know if they will ask for some proofs regarding that or not.

maybe i mined it? maybe i spent $1000 on BTC when the price was at $2?

Well that's true it will leave out the sell btc tax and I think that's the best option, everything else would be a bit illegal. But it can still be tricky you might also have to detail them on where you got the money to acquire that much BTC.

I hear its about to get alot easier!
http://www.coindesk.com/smart-property-colored-coins-mastercoin/


http://www.businessinsider.com/this-home-can-be-purchased-with-bitcoins-2013-12?op=1
 

Difficult? more like impossible, the person selling you the property will have to declare the sale to the government and how much money he sold it for and to who and it can't be hidden. So even if you purchase it off the bitcoin you'd still have to pay the taxes for, buying bitcoin, selling bitcoin and most prolly for purchasing the property too.

Either that or (Very off topic) perhaps taxation should be simplified and be made fair across the bord. Like a flat value added tax on everything.... The rich, corporations, the poor, anyone pays the same % on every transaction.

Back on topic, you can buy any asset that is taxed very little sell it at a slight loss (smaller than the other tax) to an interested buyer (pre-arranged). The item would be any such thing you can buy for BTC although at this early stage that would be quite difficult an asset such as a certain amount of gold or silver could be used.

You use BTC to get the gold, you give it to whomever who buys it for fiat.

BTC to Gold to Fiat....

Buy the rental property in bitcoin directly!

No cashing out required!


The real cashing out is actually not having too.. 

I thought most wont even consider an audit since we just laid off a lot of IRS agents lol.

See in Australia lottery winnings are not taxed, nor are other prizes. So, if you could extend that to "I won a block" then is it winnings, investment, capital or other?

yes but is it mined or purchased btc? if you mine it, I can't se how they can consider it anything other than the money invested in hardware and when you finallt convert it to fiat.
If you purchase Bitcoin then fair enough, you've invested in a commodity.

let's stay on topic guys.

You sayin' he should start pimpin'? 

In my country money earned from sex is not taxable. Just saying  

That's great. Sadly not everybody is that careful!

Best wishes!

is it all mined? if so then you have generated new cash right? how can that be an investment if you have not paid for it? the mining hardware is a capital investment sure.
If on the other hand you bought into it and made profit then it would be no different to any other commodity such as gold, silver or other.

Take small bits into buying a existing internet business, and use that as a solid source to use as for taxes.

Or sell its portions for cash and get into stocks that can be justify as a income source for your house etc.

Bottom line, your trying to clean out your money. Prevention is better then a cure.