Topic: Has anyone sold BTC won here in sig campaigns? how does tax work? - page 3. (Read 688 times)

I don't know where you are from, but this is not true. If you are a freelancer, you must sign up in the government and specify what you are doing (for example, if you are making Youtube videos, I think you must sign up as "production of audiovisual content" or something like that) and you must present the receipts that Google pays you through Adsense, and you must also pay some taxes on all of this. I didn't had any idea of all any of this and im learning now. But forget about the concept of "im innocent until proven guilty", you are guilty by default and you must prove that the money you put in your bank account is legit. You may go under the radar for smaller amounts, but any relevant amounts and they will catch you sooner or later and if you don't have everything signed up and ready they will screw you up.

Till now I haven't heard any news of bank account freeze due to bitcoin withdrawal amount in my country.
Tax policy on bitcoin income is not cleared at all. Even I was also talking about this problem with my accountant yesterday and he suggested that until any tax law does not form on crypto-currency, we should pay taxes as per the current tax slab of my country's revenue law. Also, the bitcoin price surge will be considered as the capital gain when it is converted to the fiat.

In theory, you can have multiple personas via multiple wallets. One is your "legit" wallet and one has coins that can't necessarily be accounted for. As long as bitcoins are fungible, the latter wallet still has value. You just need to be careful about a) linking it to your "legit" wallet in any way and b) use the funds as cash under circumstances that don't require KYC.


Why is that so? Once you remove all connections to your old UTXOs, can't you fabricate a new "origin?" Here in the US, I'm fairly certain that cash transactions in the low thousands get very little scrutiny. Hypothetically, one could use some "cash" (wink wink) to buy those mixed coins, and hold them as an investment to be sold later. As a buyer, how could you have known you were buying "mixed" coins? And why would it matter?


If it can't be traced, doesn't that mean you can just hypothetically make up the transaction details? No one can prove otherwise, right?

Capital gains tax and Income tax are different

Capital gains tax: you invested money and you got a profit

Income tax: the system is based on "Trust". You report xxxxx$ per year, the institution trust you, they won't ask you to prove. But if by any chance they find out you cheated (whatever the method used), they won't forget you, and it is at this moment they will ask you some proofs (taxes control or fiscal control)

When you're working in a manufactory you don't give proofs of your income, right?. It's the same as a freelancer. You can't give them your Skype conversations, emails, etc showing you make an agreement with someone that you don't even know the name. It's the same, it's based on Trust

Also, you can always give your history from an exchange if they ask for proofs, that's why you can download a CSV file on exchanges.

As for the guy on Reddit, any decent bank will freeze or terminate your account when you receive such a big amount

I just saw this on reddit, a recent case of an example of how the banks will froze your account if you sell relevant amounts. This guy sold $100k to buy a house, this is what happened:


https://www.reddit.com/r/Bitcoin/comments/7pwj08/sold_off_100k_of_btc_for_a_house_thanks_to/

We all definitely need to get our shit together and know what's going to happen when we sell. If you made 1 BTC from signature campaigns, most likely you will have $100,000 BTC in 5 years or even more, so you will want to buy some real estate and then you better know exactly what to expect when authorities demand the info.

Im looking at this and it's giving me an headache. Will need to get everything compiled and tracked down to every single satoshi I want to sell to prove im not a damn criminal (I hate how im a criminal by default in the eyes of the State).

Also it seems clear that if you ever mixed any amount of coins, these mixed coins can never be cashed out because you cannot prove the origin. So maybe even trading with Monero will make it impossible for you to buy a house with the gains because you cannot prove the trace of your money through a blockchain that is masked.

As far as you are withdrawing small amounts, there would not be any problems. But the moment you made any huge amount transactions, bank and other authorities may ask you the source of that money; so its better to prepare with all the answers.

i think there is nothing to worry about this because bitcoin is legal anyway. And just recently my friend had been receiving money from bitcoin.

What you can do is exchange your bitcoin into fiat once you are about to purchase the real estate or property. Whenever I earn from signature campaigns and want to spend it, I first convert it into fiat. It would also depend on the stand of your country of bitcoin. If they do not totally accept it yet, then it may be possible that your banks do not acknowledge bitcoin. If this were the case I advise you to convert your btc into fiat first before making any transactions as not to raise any suspicions for the authorities.

Yes obviously I meant real estate.


Chase, Bank of America, CIBC... has frozen a lot of transactions.

Of course you can get irrelevant amounts, but try to get $800,000 in your account to buy a house and then see what happens.

Im not here to talk about what I have, I could be a multimillionaire or have 100 bucks, that's irrelevant. The point here is, when you try to put bitcoin into your account, and this bitcoin is not as easy to prove when and where it was bought (for example, buying it in Coinbase is easy, but money earned in exchange of a service like a sig campaign, a business where you accept BTC and never declared anything, a mining operation...) you will need to explain very clear every satoshi. This is what the thread is about. Now name 3 people that sold more than $500,000 worth of bitcoin, the bitcoin being obtained by offering a service and never having declared anything, or undeclared mining gains, etc, and explain how it went from them. Anyone that thinks it's as easy as selling it and just paying capital gains and that's all is a delusional idiot.

PS: The people that participated in early sig campaigns have made more than 100 BTC posting, that's more than 1 million bucks right now so stop treating it as a joke, so for these that started at the begining in around 2012 or so, they have a fortune doing that, so they better know how how report every single satoshi and the consequences of not having declared it in time when they attempt to buy real estate with it. The banks are not cooperating with bitcoiners, they will try to get as much money from them as possible if the origin of the money is not clear or there are mistakes (which is very easy that that will happen since you are supposed to present every single transaction and trade ever which is insane). This is what the thread is about.

Well it can be taxed 2 times first if you are earning it via signature campaign you will be taxed by income tax. Now if you are holding it in your wallet and its price grew you will now be taxed with your capital gains. Tax is really complicated much more if your money is growing with it. As if you are earning a considerable amount of money in a signature campaign you must always find out the dollar value equivalent of your earning and immediately cashing it out in Fiat currency in order for you to limit your taxes to only income tax but the problem here will be you won't be participating the growth of your Bitcoin.

As of now, the regulations towards Bitcoin is still not properly established here in my country which is why when having Bitcoins exchanged for cash, it is not taxed yet. I have not heard a situation where someone who sells their Bitcoin for cash has been taxed. I guess the bank only gets curious when the amount exchanged is more than hundred thousands, but with withdrawing from time to time in ample ampunt, it seems that there are no problems encountered.

That's interesting. I didn't know that people in Australia are having these problems.  I'm located in the EU and have been using a number of international banks since I got into cryptocurrencies and haven't experienced any difficulties. Much appreciated, I'll know which banks to avoid if I ever have to move out of here.

On the side, National Australia Bank is working closely with Goldman Sachs. GS was well known for their anti bitcoin stance but has recently switched sides and started a crypto trading desk. It's possible that they'll influence their partners.

But you can show the origin. It's right there on the blockchain. Even if Mintpal is gone, why can't you claim the coins are from Mintpal? Why can't you claim trading records based on that? Tax authorities are interested in taxable income. You're paying that, yes? By paying taxes on cryptocurrency trading income from a defunct non-KYC exchange, you are going far beyond what most people are doing.

You may not be able to prove that the addresses belong to Mintpal, but if they truly did, I wouldn't worry about it. It can be easily determined by blockchain analysis companies (or possibly even Walletexplorer) that they did. You can sign a message from the address that you sent 1 BTC from. You can sign an address that held 5 BTC withdrawn from them.


That's why you should probably report income that is easily trackable. This makes it very important to avoid linking wallet addresses together. You should consider how you spend UTXOs and how that links your BTC holdings together on the public ledger.

The question was not directed to me, but I´ll give it a try. I admit that the following banks
are not active worldwide, but they are also not operating in a tiny 3rd world country and instead
are the 4 biggest banks in Australia:

-National Australia Bank
-ANZ
-the Commonwealth Bank of Australia
-Westpac Banking Corporation


https://www.zerohedge.com/news/2017-12-30/australian-banks-reportedly-freeze-accounts-bitcoin-users

I´m still waiting for a clarification of the mentioned banks in a new article, but this
is still a pretty shocking development for Australian Bitcoin users if the 4 biggest
banks in their country close accounts that deal with cryptocurrency.

I´m not based in Australia myself, but I also had problems with my bank that simply
refuses to process wires that originate from Bitcoin exchanges.

Real state, meaning that cryptocurrency is unreal to you, or were you trying to write real estate?


This is completely false and made up. Name me a at least 3 worldwide bank branches that target cryptocurrency users and block their accounts. And I'm not talking here about a single case because from time to time people get some transfers denied and it's not crypto related. I'm talking about specific, crypto related cases. Naming 3 should be easy if, like you've said, any account can be frozen.
I can claim that at any given time you can get an electric surge that will end up burning down your computer with all your precious sig campaign money and it will have as much substance as your claim about banks targeting bitcoiners.

When you cash out an amount of any relevancy, you must prove the origin. There is no real way to prove that the addresses where you deposited and withdrew from, are from Mintpal or from a drug dealer or anything else, because Mintpal doesn't exist, so there's no way to link them properly into the exchange, unless you can prove me otherwise, because all we got is some addresses on the blockchain now, without the context of the website. I don't know about the US, but in other countries you MUST prove the origin is not ilicit, and if they don't like the evidence, you risk losing your money because they would confiscate it or tax it to ridiculous levels.

So again, you send 1 BTC to Mintpal.

You make 4 BTC from trading it against some altcoin.

You send back your BTC to your wallet.

You end up with 5 BTC.

Now prove these addresses belong to Mintpal. And no, you can't prove ownership of the deposit address, because you don't control the private keys of a deposit address of an exchange, so you can't sign them.



Well, if you are going to sell years worth of signature campaign earnings, they will ask where it came from and they will see the address is linked to your account where you posted at with a simple google search, then they could browse your posting history and track all of your receiving addresses for the signature campaigns.




They are not limitless, they are very limited, if the goal is to buy some real state. You basically have to be 100% transparent, pay all taxes, and be able to proof 100% that the gains are licit.

yeah some posts on this forum are no different in terms of quality or value 
I have never heard about banks asking about the origin of your coins
unless you go over a certain threshold or they come from tainted or flagged sources
if you are totally afraid to use banks,sell for WU,Paypal or any other electronic currency
sell here or at localbitcoins
get yourself a bitcoin debit card and fund it with bitcoins and cash out at any ATM
your options are limitless

In this particular case a lot depends on a country because each of them has the totally diverse limitations that should be learned thoroughly and taken into consderation so to avoid any possible issues in the future.

If you deposited and withdrew BTC from Mintpal, those transactions are permanently recorded on the blockchain. It doesn't matter what transactions took place on Mintpal's internal database.

You sent BTC from Address A (which you can prove control of). You received a higher amount of BTC at Address B (which you can prove control of). The difference is your BTC profit, but what matters for taxes is the USD profit. Each trade on Mintpal is taxable, and the net of those gains determines your taxes due.

The fact that Mintpal no longer exists just makes it harder to disprove the records you provide for your Mintpal trades. That's why any good faith effort to pay taxes on the gains made between Address A and Address B is probably good enough. You made 4 BTC profit, which had a USD equivalent when you bought back BTC. That's your taxable gains.


How can they definitively link addresses together? Personally, I am extremely careful about linking wallet addresses together, even if it means paying higher fees to consolidate outputs.