Topic: Do we need to pay tax from Bitcoins earnings? - page 2. (Read 1752 times)
I guess it depends on Country Jurisdiction .. For India what i learned that we need to pay Tax for Fiat currency as Capital gains .. although its still not regulated by Govt. in India .. But soon i guess Govt. will adapt it .
As long as we keep Bicoins as btc in our account and don't exchange them to either EUR or USD will we be liable for tax at this point?
I was just wondering if somone know about it since my CPA say no.
I was just wondering if somone know about it since my CPA say no.
Taxation of every country is different. Also is different the legislation on bitcoins usage. But suppose I exchange dollars to euros. Then these euros to GBP and at last these GBP back to dollars. Do I pay taxes? No. So why do I pay for these bitcoins I bought from exchange market? Taxes are levied to income and not to currency
Thats depend on what is your doing for earning. I think if you have big business like exchange, i think they will charge you for that. But if you are earning small amount only. I guess they wont charge you with tax. Besides, bitcoin is anonimous. They dont know you or even trace because of its anonimity. So you are safe with the taxes. Dont worry about it.
I would think you only have to declare how much you have made using bitcoin is if it's worth is more than $2000. Then they will care about collecting taxes on that. If it is an amount below $250 that they have to collect then I do not think they will bother. Cause it will cost them more than that $250 to pay someone to call you or come to your house to harass you to pay the taxes in the first place.
Depends on your jurisdiction, I know in Canada you do need to pay tax on bitcoin earnings or as income.
Currently no, but there is so many government already try to make bitcoin regulation and they will tax bitcoin soon, as you can see for the us the irs already want to audit and supervise the bitcoin transaction, but for the other country it hasn't been regulated but it just the matter of time
If you are in the US then the IRS has ruled that Bitcoins are to be treated like stock. So if you buy Bitcoins/stock at $500 per Bitcoin/share there is no taxable event. Holding your Bitcoin/stock is not a taxable event. If you sell your Bitcoin/stock at a profit, let's say $1000 per Bitcoin/share then you have a capital gain of $500 per Bitcoin/share and you owe capital gains tax on the gain. If you sell your Bitcoin/stock at a loss, let's say $400 per Bitcoin/share then you have a $100 capital loss per Bitcoin/share which can be used to offset gains elsewhere on your US tax return. The tricky part is when you use your Bitcoins to buy something, let's say Girl Scout cookies. You owe a capital gains tax on the Bitcoins you use to buy the cookies if you have a gain on those Bitcoins at the time you buy the cookies. If you have a loss on the Bitcoins at the time you buy the cookies then you have a capital loss you can write off on your tax return. So you have to track the date when you spend your Bitcoins also. I use the average price that day as the price at the time I spend them. I use Quicken to track my purchases, sales and use of all my Bitcoins. Pain in the ass, yes but the regulations are pretty clear.
Wow...it is must really be a pain in the ass. I am wondering...can the IRS really track all of these transactions or you guys just do it voluntarily inorder not to get entangled with the IRS web? I feel still lucky enough because I live in a country where tax laws are not yet that strict or implemented fully.
If you are in the US then the IRS has ruled that Bitcoins are to be treated like stock. So if you buy Bitcoins/stock at $500 per Bitcoin/share there is no taxable event.
Holding your Bitcoin/stock is not a taxable event.
If you sell your Bitcoin/stock at a profit, let's say $1000 per Bitcoin/share then you have a capital gain of $500 per Bitcoin/share and you owe capital gains tax on the gain.
If you sell your Bitcoin/stock at a loss, let's say $400 per Bitcoin/share then you have a $100 capital loss per Bitcoin/share which can be used to offset gains elsewhere on your US tax return.
The tricky part is when you use your Bitcoins to buy something, let's say Girl Scout cookies. You owe a capital gains tax on the Bitcoins you use to buy the cookies if you have a gain on those Bitcoins at the time you buy the cookies. If you have a loss on the Bitcoins at the time you buy the cookies then you have a capital loss you can write off on your tax return.
So you have to track the date when you spend your Bitcoins also. I use the average price that day as the price at the time I spend them. I use Quicken to track my purchases, sales and use of all my Bitcoins.
Pain in the ass, yes but the regulations are pretty clear.
Holding your Bitcoin/stock is not a taxable event.
If you sell your Bitcoin/stock at a profit, let's say $1000 per Bitcoin/share then you have a capital gain of $500 per Bitcoin/share and you owe capital gains tax on the gain.
If you sell your Bitcoin/stock at a loss, let's say $400 per Bitcoin/share then you have a $100 capital loss per Bitcoin/share which can be used to offset gains elsewhere on your US tax return.
The tricky part is when you use your Bitcoins to buy something, let's say Girl Scout cookies. You owe a capital gains tax on the Bitcoins you use to buy the cookies if you have a gain on those Bitcoins at the time you buy the cookies. If you have a loss on the Bitcoins at the time you buy the cookies then you have a capital loss you can write off on your tax return.
So you have to track the date when you spend your Bitcoins also. I use the average price that day as the price at the time I spend them. I use Quicken to track my purchases, sales and use of all my Bitcoins.
Pain in the ass, yes but the regulations are pretty clear.
As long as we keep Bicoins as btc in our account and don't exchange them to either EUR or USD will we be liable for tax at this point?
I was just wondering if somone know about it since my CPA say no.
I was just wondering if somone know about it since my CPA say no.
Could depend on your jurisdiction and/or the type of activity, but in most cases (in my unqualified opinion) the answer is Yes. Doesn't really matter if it's bitcoins, foreign currency, or even other goods/services (received as a payment), you're still expected to pay tax on it (providing it's a taxable income), at the exchange rate/value at the time of receiving payment.
Let us know what kind of earnings are you talking about and what country do you live in and maybe someone will offer you a sound advice.
As long as we keep Bicoins as btc in our account and don't exchange them to either EUR or USD will we be liable for tax at this point?
I was just wondering if somone know about it since my CPA say no.
I was just wondering if somone know about it since my CPA say no.
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