IRS can only issue rules as some sort of a guideline for future documents
it is nothing but a statement on how IRS will be treating cryptocurrencies once they are legalised
they are not regulated or legalised in the US ,besides each and every state can and,probably,would
have its own laws and regulations in regards to bitcoins
Topic: IRS Rules for Virtual Currency / Bitcoin (Read 1589 times)
You must declare the value of the token at the time you receive it from your pool or you receive it in your wallet. However if you are running your mining operation as a business you only need to declare the net value at the time the token was received. Value of token at the time of receipt minus the cost to produce it. Just like a real physical gold miner does. Then later if you sell the token and it has increased or decreased in value from the time of receipt you need to report the capital gain or loss.
what about instamining and solo mining, where i mine coin that have no value long before i'll sell them? what i declare at first, they don't have any value...gold miner also don't have instamining with altcoin...
also how can someone keep track of all his shitcoin, i think it's too much hassle, if you keep your money in the alt, youa re free from taxation, and you need only to declare the amount spent on electricity
You must declare the value of the token at the time you receive it from your pool or you receive it in your wallet. However if you are running your mining operation as a business you only need to declare the net value at the time the token was received. Value of token at the time of receipt minus the cost to produce it. Just like a real physical gold miner does. Then later if you sell the token and it has increased or decreased in value from the time of receipt you need to report the capital gain or loss.
so virtual currency in the USA are directly taxable? even if you don't exchange for usd they are taxable it seems, and there fore if i receive good from another country and i pay in virtual currency i need to declare in the USA?
about mining does someone need to declare if he receive altcoin from his mining activity but he don't dump for fiat, he just keep the altcoin? he need to declare the amount of altcoin he have?
about mining does someone need to declare if he receive altcoin from his mining activity but he don't dump for fiat, he just keep the altcoin? he need to declare the amount of altcoin he have?
The IRS has set out specific rules in regard to Virtual/Cryptocurrency that you will want to understand as you build your Cryptocurrency Portfolio.
Some of the important points in the document include:
Much more is explored in this document which comes directly from the IRS itself.
Full IRS document: https://bitcoininvestment.news/irs-rules-for-cryptocurrency/
Some of the important points in the document include:
- The IRS considers “Virtual Currency” to be “Personal Property”. This means it is not subject to rules that apply to Securities such as Stocks and Bonds.
- Trading “Virtual Currency”: “Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.”
- If you receive payment in “Virtual Currency” for goods or services you must declare it as income for the “fair market value” of the currency at the time of the transaction.
“Virtual Currency Mining ” profits are taxable at the rate of the virtual currency’s “fair market value” at the time the “mining profits” are received.
Much more is explored in this document which comes directly from the IRS itself.
Full IRS document: https://bitcoininvestment.news/irs-rules-for-cryptocurrency/
I don't see any thing unique in what is being said here because from the way it is they are seeing bitcoin as a commodity and not a currency and for that reason cannot be used as a medium of exchange yet but I see this as a short term progress which will still change in due time. However, the controls to actually be put in place to ensure compliance is where there might be issues which might even affect the anonymity that bitcoin promises to users.
Yes, with multiple alternative currencies and shapeshift this can all get quite complex
taxes as property or capital gains which is based on your tax bracket so the question i have is....if i bot a virtual currency at basically 1 dollar sold it at 10 and then converted it to bitcoin then converted it to usd and then to a bank account in the usa...what is the cost basis? I assume it would be the virtual currency price but this is also not clear.
The IRS has set out specific rules in regard to Virtual/Cryptocurrency that you will want to understand as you build your Cryptocurrency Portfolio.
Some of the important points in the document include:
Much more is explored in this document which comes directly from the IRS itself.
Full IRS document: https://bitcoininvestment.news/irs-rules-for-cryptocurrency/
Some of the important points in the document include:
- The IRS considers “Virtual Currency” to be “Personal Property”. This means it is not subject to rules that apply to Securities such as Stocks and Bonds.
- Trading “Virtual Currency”: “Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.”
- If you receive payment in “Virtual Currency” for goods or services you must declare it as income for the “fair market value” of the currency at the time of the transaction.
“Virtual Currency Mining ” profits are taxable at the rate of the virtual currency’s “fair market value” at the time the “mining profits” are received.
Much more is explored in this document which comes directly from the IRS itself.
Full IRS document: https://bitcoininvestment.news/irs-rules-for-cryptocurrency/
If those are the rules without some hidden agenda then I would agree with the poster above that it could not have gotten any better because that's a fair playing ground anyone can wish for but my concern is how do they intend to investigate the claim of someone making the returns to the authority? In the sense that I feel there will be some other measure and mostly its going to be the market value thereby discouraging any form of discount and rebate to be given to those interested in using bitcoin by taxing at market value. This will affect new entrants more than those already involved
Of course it is fair, however i think all who read this article totally surprised.
Well, that seems fair. The only problem that I found was the fact that 'payment in “Virtual Currency” for goods or services you must declare it as income for the “fair market value” of the currency at the time of the transaction'. How are governments going to tax this? Obtaining Bitcoin from external sources would probably fall under income tax, but how would governments be able to tax the specific amount for every household? Are we required to convert to fiat and then continue? If this is the case, can't we just bypass this by keeping Bitcoin in your bitcoin wallet?
So if I read that right, you would not be taxed on profits made from trades. Is that about right?
All in all, it sounds fair to me. And having lived in the U.S. all my life, that comes at a surprise.
All in all, it sounds fair to me. And having lived in the U.S. all my life, that comes at a surprise.
Reading at those salient points presented here, it seems to me that IRS made a very fair ruling on cryptocurrency which can provide some breathing space for Bitcoin and other digital currencies. Maybe they realized that Bitcoin can be helpful to the economy and if people would just be paying the correct taxes then there would be no big problem.
Now that this is already cleared, maybe it is time that start-up companies start to show up and exploit the cryptocurrency market while still being based in USA. Maybe there is no need to go abroad in order to do the business (except if they are coming to Philippines where I am based at hehe).
As far as the IRS is concerned, what they can more after is the correct taxes be levied on Bitcoin transactions especially if there would be income gained and that can be fair enough for all parties concerned. Now, what we should be waiting for are laws that can affect Bitcoin when it is connected with terror funding and other criminality because those are more critical in nature.
Now that this is already cleared, maybe it is time that start-up companies start to show up and exploit the cryptocurrency market while still being based in USA. Maybe there is no need to go abroad in order to do the business (except if they are coming to Philippines where I am based at hehe).
As far as the IRS is concerned, what they can more after is the correct taxes be levied on Bitcoin transactions especially if there would be income gained and that can be fair enough for all parties concerned. Now, what we should be waiting for are laws that can affect Bitcoin when it is connected with terror funding and other criminality because those are more critical in nature.
The IRS has set out specific rules in regard to Virtual/Cryptocurrency that you will want to understand as you build your Cryptocurrency Portfolio.
Some of the important points in the document include:
Much more is explored in this document which comes directly from the IRS itself.
Full IRS document: https://bitcoininvestment.news/irs-rules-for-cryptocurrency/
Some of the important points in the document include:
- The IRS considers “Virtual Currency” to be “Personal Property”. This means it is not subject to rules that apply to Securities such as Stocks and Bonds.
- Trading “Virtual Currency”: “Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.”
- If you receive payment in “Virtual Currency” for goods or services you must declare it as income for the “fair market value” of the currency at the time of the transaction.
“Virtual Currency Mining ” profits are taxable at the rate of the virtual currency’s “fair market value” at the time the “mining profits” are received.
Much more is explored in this document which comes directly from the IRS itself.
Full IRS document: https://bitcoininvestment.news/irs-rules-for-cryptocurrency/
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