Topic: Have people been forced to pay tax over Bitcoin yet? - page 8. (Read 5519 times)

All I hear is that the "US Internal Revenue Service (IRS)",  The IRS says that bitcoin should be treated as an intangible asset or property and not a currency, since it is not issued by a country's central bank. The treatment of Bitcoin as an asset makes its tax implications clear.

The IRS requires bitcoin users to report bitcoin transactions of all kinds, no matter how small. Accordingly, each US taxpayer is required to keep a record of all purchases, sales, investments, or use of bitcoins.

*CMIIW*

In the United States, very few have voluntarily disclosed.  The Internal Revenue Service has strong armed Coinbase into disclosing invetors trading on their platform so for tax year 2017, the answer to your question will be most assuredly, yes. 

Here is a good column on the topic:

http://thecryptotaxcenter.com/2017/12/09/the-tax-man-cometh-to-an-exchange-near-you-soon/

In the near future, states will try to impose a profit tax on operations with crypto currency, and in some cases people using crypto currency will be forced to do so. The state can establish the rules by which anyone who sells the crypto currency will have to provide their identification data for paying the relevant taxes and then citizens will have to do it. Of course, you can try to bypass local banks, exchanges, exchangers and use overseas. While I can not say for sure whether it will be possible then to escape taxation in your country.

Maybe for some people, will be very forced if have to pay tax bitcoin. Because it will reduce their assets. But for me, to pay taxes, I will agree to that. But the tax is not too much-lots yes 

They can't really prove anything right now so I guess its not possible at the moment, but you never know in the future.

Well, I talked to my accountant last week.  He had just come from a huge gathering of tax professionals to get some insight into the new tax law.  Solid CPAs, accountants and tax attorneys regularly use the conventions and the seminars to stay abreast of the tax code.

I told him that I had purchased BTC in 2014 and have held on ever since.  He said the the tax implications of bitcoin were broadly two-fold:

As it stands right now, if you realize profit from BTC and convert your BTC into fiat (dollars) you are basically under the honor system.

I go 'Whaaaa?" 

He clarified by letting me know that banks in America are required to issue a 1099b, that is part of the banking regulations. The 4 exchanges based in the US and NOT required to file a 1099b to their customers. So, the official reporting requirement is the primary way the IRS tracks income in the country I that income has generated a 1099, which is usually the responsibility of the employer when it is freelance of contract work.  Without the 1099b, the IRS is not alerted through it's system that you made some money outside of a regular employer who would pay you a salary and have taxes taken out before you get your money.

The originating company (the exchange) would be where the 1099 would be generated. The bank they use to do their wire transfers is not responsible either, as well as your receiving bank. Now, part of the know your customer scheme at the bank you do your banking is behavioral, another critical element being used quite a bit is a type of pattern recognition (AI), so, I would get your story straight before wiring money into your account. One option would be to start a small business where you begin to file a schedule C which can be done as a sole proprietor (DBA, but you should have an idea of what the wire is for. 

The receiving bank will not report to the IRS the wires you received as income, for how the hell do they know what is it for.  If you are going to convert BTC to fiat, talk to an accountant who works with professional floor traders or stockbrokers about short term and long term Capital Gains taxes.  There are different tax rates. Short term is if you buy and sell within the same year. Long Term is over a year.  There are rules and regulations in the financial industry that it seems that the IRS will being applying to BTC transactions. Also, there is no carryover, so you get hit with the capital gains tax pretty quick in that world, but there are accepted practices where a broker gets 1000 stocks of IBM, sells half in the first year (short term CG) and hold the other half for a couple of years (long term CG) - but that would not work in the case of BTC - Why? bitcoin is not serialized like that.  So the idea of buying 1000 BTCs and doing a maneuver like I described half now and half later, is impractical,a least at thins point. 

Disclaimer: I am not an accountant or a CPA - this tax information was shared to me to help get a deeper understanding of what I am going to do with my BTC down the road.

~ Bobby Ocean

This is where greed and loss of cognitive skills and denial come into play. There is a tendency for people to waffle on their once good intention when faced with a stack of green. 

I do not think so. No one is actually forced to pay tax. Especially with income that are considered as business. These includes the business owners, real estate agents, practice of profession and investments/trading which includes Bitcoins. They are not forced basically because they will be the one to file their own income. And if they don't, penalties and more fees will apply. And I doubt that they can force tax on Bitcoin because they don't have any idea on who to force. Bitcoin transactions are anonymous and you can earn from it while your identity is covered.

The IRS does not view crypto currencies on legal tender, they even went as far as to say “you can’t pay your taxes in crypto’s so they aren't currencies”However, if you had a realizable gain then your income may be subject to ordinary income taxes or capital gains taxes, this largely depends on how you treat the crypto’s. If you need help feel free reaching out to my firm

As far as I know yes. Taxation is lifeblood of the government and it is mandatory.
The earning that you get from the investments are already net by Final withholding tax 10%; with this you cannot escape or avoid tax in all commercial transaction because tax is everywhere.

The short answer is no. But recent Court proceedings make me think it will be taxed soon: https://scholarship.law.duke.edu/dltr/vol16/iss1/1/

Bitcoin is not anonymous at all and some governments structures can make you to explain the income on your bank's bill. That's true that not every country made it's strategy about crypto currencies taxations, but they simply may count your cashing out as profit from which you will need to pay the necessary percent as the tax.

i don't know with people who come from other countries but me personally never
but pay tax means bitcoin will be regulated by government and as long as government
still not admit bitcoin then possibly to bitcoin users paying tax is pretty small but i personally
will following the rule if someday bitcoin regulated in my country and have to paying tax

To my knowledge, I think it's no need must to pay tax on bitcoin. But maybe for the country that has legalized bitcoin already has its own rules to pay taxes on the government, I myself not knowing it yet.. I must paying a taxes to the government considering the government in my country hasn't to regulating bitcoin.

I think they cannot imposed tax on bitcoin since it was a cryptocurrency no one can rule it out and manage.But if they will legalized it I think it can avoid by scam and hackers who do it we can secured our bitcoins to somebody.

i think in the future we can have tax and its not going to anyone to be force because for me we need tax here in bitcoin for more good and more safe,most of scam accusation here in online world is related to bitcoin so i think if we have government also here some person that use bitcoin to scam will get scared for what their doing because the government can monitor that

If your transactions take place only in bitcoins you do not have to pay taxes. This probably will never happen. Governments do not recognize bitcoin as currency. But most people periodically exchanging bitcoin for Fiat. In this case, the tax office will regard it as your profit and you will be required to pay tax.

In my opinion it is hard to determine who uses bitcoin but a transaction can be seen in public. Compulsory tax payment can not be made because of the fact that there is not enough law regarding this topic Such events are still not happening in our country. Happy to think that such an event will occur as many investors can lose enough to invest in bitcoin because maybe in tax pay.I just think it

People cant be force to pay bitcoin taxes not even in the communist countries like China. The word force cannot be use if bitcoin is legal in a certain country rather it should be an obligation for every citizen to pay bitcoin tax if their businesses and income are engaged in bitcoin. If they will not pay bitcoin taxes then they should not be force to do it but they shall face consequences according to the regulation still it is just like not paying our normal  income taxes in fiat.

yes, but not in the manner we are thinking. when folks get arrested for running unlicensed exchanges and for operating as unregistered money services businesses, they often have to pay taxes retroactively, as most criminal that generate value during the commission of the crime. this can be directly compensated to the government, usually in the form of a fine or penalty attached to a judgement, or this can also manifest as property forfeiture. value is value, and having ones shit stolen by the government looks pretty much the same on paper as paying them a bunch of money

a big red line item.

thanks man. great article.