If a guy sells his house for bitcoins how is he going to be taxed?

deathcode

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Quote from: frga13 on March 25, 2013, 02:59:00 PM

Quote from: sunblaster on March 25, 2013, 01:03:30 PM

Who knows, Canada has no laws for digital currency.

It doesn't matter.
He can say that he sold a house for 1 $, so what then? Will he pay tax on 1$? Ofcourse not...
House price would be estimated by tax experts and he will pay tax according to that price.

Technically, for all the government care, he can gift the house to a long time friend. whatever happens between him and his friend using BTC will never be found, although the Canadian IRS might be all over that transaction since he made it public already.
But you catch my drift...

frga13

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Quote from: sunblaster on March 25, 2013, 01:03:30 PM

Who knows, Canada has no laws for digital currency.

It doesn't matter.
He can say that he sold a house for 1 $, so what then? Will he pay tax on 1$? Ofcourse not...
House price would be estimated by tax experts and he will pay tax according to that price.

sunblaster

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Who knows, Canada has no laws for digital currency.

JordanL

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Quote from: paraipan on March 25, 2013, 11:45:09 AM

Quote from: JordanL on March 25, 2013, 11:41:00 AM

The same way he would be taxed if he sold if for Canadian Dollars. Or Euros. Or Gold. Bitcoin is not a magically nontaxable currency.

But is "magically" not enforceable, rendering taxes voluntary, sic.

Same as cash or basically anything else. You can try to evade taxes regardless of what currency/payment method you use.

DataPlumber

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Quote from: paraipan on March 25, 2013, 11:45:09 AM

Quote from: JordanL on March 25, 2013, 11:41:00 AM

The same way he would be taxed if he sold if for Canadian Dollars. Or Euros. Or Gold. Bitcoin is not a magically nontaxable currency.

But is "magically" not enforceable, rendering taxes voluntary, sic.

"Voluntary" is an interesting word in this sentence. If you get a tax bill for the sale of the house (at the market value in CAD), and you decide not to pay it, the powers-that-be have means to change your definition of "voluntary".

"I will volunteer to pay this bill because I don't like the clothing fashion of prison uniforms."

DeathAndTaxes

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Gerald Davis

Quote from: yvv on March 25, 2013, 11:48:12 AM

But bitcoin's value in dollars changes the order of magnitude throughout the year, how will Canada Revenue determine how much does he owe? Will they check how much did BTC cost at the moment of sale?

Yes. It is no different than anything else. The exchange rate between EUR:CAD varies throughout the year. How could Canadian Revenue Office determine how much a sale in EUR is worth? Oh yeah look at the exchange rate at the time of the sale.

More likely the seller will report in the contract the exchange rate at the time of the sale. The tax office will simply verify that it is a plausible number.

DeathAndTaxes

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Gerald Davis

Quote from: paraipan on March 25, 2013, 11:45:09 AM

But is "magically" not enforceable, rendering taxes voluntary, sic.

Hardly. In a real property transaction the change in ownership needs to be recorded with the state. Taxes will be paid by all parties. Bitcoin isn't some magical tax free currency. Anything of sizeable value causes ripples in the real world. Say NewEgg accepted Bitcoins and this year did $50M in sales. Where did the $50M in inventory come from? think it is going to leave a paper trail. NewEgg would wisely pay corporate income tax on all that revenue. If they didn't come audit time it is going to be trivially easy to bust them.

Sure you might be able to sell a thousand dollars in gold coins and avoid taxes if you use Bitcoin but .... you could do the same thing with cash. Anything involving real world inventory or property is going to leave paper trail and tax agencies aren't just going to "miss" billions of dollars in commerce just because it didn't involve legal tender.

yvv

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But bitcoin's value in dollars changes the order of magnitude throughout the year, how will Canada Revenue determine how much does he owe? Will they check how much did BTC cost at the moment of sale?

paraipan

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Quote from: JordanL on March 25, 2013, 11:41:00 AM

The same way he would be taxed if he sold if for Canadian Dollars. Or Euros. Or Gold. Bitcoin is not a magically nontaxable currency.

But is "magically" not enforceable, rendering taxes voluntary, sic.

JordanL

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The same way he would be taxed if he sold if for Canadian Dollars. Or Euros. Or Gold. Bitcoin is not a magically nontaxable currency.

yvv

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http://www.forsalebyowner.ca/listing/house-for-sale-crowsnest-pass-AB/124988

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