I was wondering if i were to liquidate some of my coins by having buyers deposit cash into a bank account (as others do on here) would i have to report large transactions? This is what i found on the matter from the IRS website, but its not clear whether selling bitcoins falls under "exchange of cash for other cash" or if bitcoins includes "the coins and currency of the United States and a foreign country" or if i would be considered a business by selling large volumes of coin. Also would i have to report this as income? These coins are largely for services rendered, so i have no paper for them to audit.
Workbook on Reporting Cash Payments of Over $10,000
IntroductionThe law requires that trades and businesses report cash payments of more than $10,000 to the federal government by filing IRS/FinCEN Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business (See Exhibit 1, Form 8300).
Transactions that require Form 8300 include, but are not limited to:
Escrow arrangement contributions
Pre-existing debt payments
Negotiable instrument purchases
Reimbursement of expenses
Making or repaying a loan
Sale of goods/services
Sale of real property
Sale of intangible property
Rental of real or personal property
Exchange of cash for other cash
Custodial trust contributions
The information contained in the form assists law enforcement in its anti-money laundering efforts. When businesses comply with the reporting laws they provide authorities with an audit trail to stop tax evasion, drug dealing, terrorist financing and other criminal activities.
Type of Payments to ReportTrades and businesses must report cash payments received, if all of the following criteria are met:
The amount of cash is more than $10,000.
The business receives the cash as:
One lump sum of more than $10,000 or
Installment payments that cause the total cash received within one year of the initial payment to total more than $10,000 or
Previously unreported payments that cause the total cash received within a 12-month period to total more than $10,000.
The establishment receives the cash in the ordinary course of a trade or business.
The same agent or buyer provides the cash.
The business receives the cash in a single transaction or in related transactions.
Cash IncludesCash includes the coins and currency of the United States and a foreign country.
Cash may also include cashier’s checks, bank drafts, traveler’s checks, and money orders with a face value of $10,000 or less, if the business receives the instrument in:
A designated reporting transaction, as defined below, or
Any transaction in which the business knows the customer is trying to avoid reporting of the transaction on Form 8300.
A designated reporting transaction is the retail sale of any of the following:
A consumer durable, such as an automobile, boat, or property other than land or buildings that:
Is suitable for personal use.
Can reasonably be expected to last at least one year under ordinary use
Has sales price of more than $10,000.
Can be seen or touched (tangible property).
A collectible (a work of art, rug, antique, metal, gem, stamp or coin).
Travel or entertainment, if the total sales price of all items sold for the same trip or entertainment event in one transaction or related transactions is more than $10,000. The total sales price of all items sold for a trip or entertainment event, includes the sales price of items such as airfare, hotel rooms and admission tickets.
Cash does not include personal checks drawn on the account of the writer.Cash does not include a cashier’s check, bank draft, traveler’s check or money order with a face value of more than $10,000. When a customer uses currency of more than $10,000 to purchase a monetary instrument, the financial institution issuing the cashier’s check, bank draft, traveler’s check or money order is required to report the transaction by filing FinCEN Form 104, Currency Transaction Report.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Workbook-on-Reporting-Cash-Payments-of-Over-$10,000#penalties
