Topic: IRS says we are are criminals now - page 2. (Read 2893 times)

Don't see how it can be enforced effectively around the globe.

if you like it then it will make a loss of miners

You only need to report transactions over $600, this was part of obamacare. I do believe that this $600 requirement was later repealed.

As long as your report any gains to the IRS at tax time then you are safe from prosecution.

As I wrote previously, $600 or more in a "taxable year" to the same recipient. That can include any number of payments throughout the taxable year.

If you make many small payments to many different recipients, you may fall under reporting requirements as a money transmitter, etc..

In any case, whether you must report or not the payments, you still owe the taxes due.

And there won't be any changes to this. As this is not a new interpretation. This is merely the way the current tax law applies. I even predicted this exact ruling. Go search my archives here.

I am sure it will be in court before the end of 2015, but likely even before the end of 2014.  People by nature hate paying taxes, and governments by nature hate people who don't pay taxes.

Well even though I have an accounting  degree and  worked for the IRS for a while.  My knowledge  of oil tax law is very small. But the idea that an Oil well is a depleting asset is allowed for oil.

  
Here is a fact  bitcoins are depleting as I type boom!! a block just depleted the 21 mill coin well by 25 more coins..  I know a big coin farm in the USA will want treatment just like oil companies get for a depleting asset.  This will happen needs to happen and this will boost BTC mining in the USA.

 But what the F just an opinion  by a 50 plus year old guy In NJ. .

 

PS
I would like to see how long before this takes to go into a courtroom.

Funny I agree with part of what you say.  600 usd payment needs to be reported.  no matter whom you paid it to.

  But a single 600 or greater not  30 x  21 = 630  total.


http://www.irs.gov/pub/irs-drop/n-14-21.pdf   see question 12 below

Q-12: Is a payment made using virtual currency subject to information reporting?
A-12: A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property. For example, a person who in the course of a trade or business makes a payment of fixed and determinable income using virtual currency with a value of $600 or more to a U.S. non-exempt recipient in a taxable year is required to report the payment to the IRS and to the payee. Examples of payments of fixed and determinable income include rent, salaries, wages, premiums, annuities, and compensation.

Some may say mining is not a business it is a hobby but I made money at it last year so I will call it a business .

Correct me if I am wrong...many sectors of oil exploration have income that is 100% tax deductible?    I had a few clients that their sole income was from oil exploration, but we had trouble getting financing for them because typically banks or investors only calculate income off of "taxable income"  When their income was not taxed at all, it posed underwriting problems...

The ruling is pretty logical.  I have a tax background. Not sure what they would change it to.  But they may make it like oil well drilling.  This is better for miners.  More tax exemptions.

My return will be fun as I have  a  profit for 2013.  And bfl sent me  500 bucks from 2013 a few days ago.  yeah they are doing some refunds.

But I have btc in every manor.

Buy and hold

Mining.

cloud contracts.  I scored well on DzCoops group buys 5,6,9,10,11,12.

Selling gear on ebay.  

So it will be a fun return.

Actually this is a good thing for BTC   making it as legit as possible  is the best that can happen.

Incorrect. It applies to anyone, and the $600 is the aggregate for the annual reporting period.

Before you give tax advice, make sure you don't want to be sued for giving incorrect advice.

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Disclaimer: I am not giving tax advice, please consult your own professional adviser.

I believe the IRS came out and said that everyone just needs to make their best effort.   I hate taxes just as much as the next person, but they basically said as long as you are making an honest effort to document your gains and are paying the taxes that you think you owe on them, you will be fine (until there are clearer guidelines).

If you made 20k on BTC and are claiming a short or long term loss, that is a completely different issue.

AGreed ...no one likes it but everybody needs to pay tax's anything else and you are a criminal 

Paying taxes on assets or gains has nothing to do with being a criminal, it is simply the way the US collects money to pay the interest on our national debt as well as fund projects, army etc. It actually further legitimatizes the use of bitcoin within the US. And it being taxed as a property can actually be beneficial as you may be able to pay lower tax rates that if it were considered to be an income, and thus have to pay income tax.

on a side note...by the IRS saying all this is property..my cpa said i was a farmer..heh..in other words..if they are gonna tax me on mining bitcoin at 25% as gross income.....and the only way i can "mine" to get this gross income to pay the IRS is via equipment it is all wrote off ....got 50% off equip as a 'new home run business' etc etc...my CPA had a lot of fun so out of the 16k i made and 4k i should have paid in taxes i paid 550....with the Titan order next year included in this 2013 tax setup...i would have paid 2550 w/o it and paid 550 with it...so anyway was like getting the knc titan for 8k vs 10k....

anyway next fall i can sell bitcoin for regular 20% capital gains tax (over 1yr and 1 day) and any equipment i get this year same deal...prob 25% off reported taxes and depreciation at 20% for 5 years as computer equipment

so its a hobby i figured i'd be legal and eat the 4k out of 16k ..boy was i surprised....so I'll play this game till the rules are tweaked which is imho after this year in 2015 it will be no penalty for mining (ie you assume risk with equip purchase for more coin then you could buy risk) and just coin will be coin 20% on capital gains if you hold it and this silly keep track of every bitcoin will go away

but anyway can spread out the equip depreciation and other perks till then ...so...for the hassle of p/o the IRS for 16k and being legal it is working out so far

only catch is i took off bfl losses if they pay me back then i will show 'found income" of 8k on taxes (ie 2k goes to IRS) UNLESS i buy more equipment then the 2k i'd normally pay to IRS can roll back in to that (see above)

anyway my CPA seemed to have  a good time..I now know how farming works...buy a bunch of equip and pray the next years crop works out

also ..if my coins go down this  year from the 1200 buck high etc etc i minted them at and paid taxes on..then i can take a 'capital loss' whatever that means

never knew republicans had this much fun

anyway imho it will get fixed legislatively this fall 2014 and go back to being a currency...and if BFL comes thru (again staying legal) it will be like getting 25% off equip (what i would have paid on the 8K found income) and/or the Titan taken off last year already saved me 2k i shoulda paid ...so instead of 10k it is 8k

anyway if stuff ROI's only I should be pretty good ..if I make more then depending on the tax guidelines this fall ..I'll do the whole thing over again

but again this is me its a hobby for 16k I'll play whatever legit game my cpa says i should do and pay taxes....until such time these stupid IRS rules are fixed..but the IRS can't call it 'property' with all the tax law that entails in me holding it for 1yr and a day to escape 46% captial gains taxes if less then 1yr and 1 day....equipment home office and the other fun 'toys' my cpa drag'd out is a consequence of the IRS guidelines (so far anyway)

anywho with the elections this fall we may have this same screwed up stuff this year as well (likely) the rule in the USA is keep the IRS happy..that and the fact around nov/dec i can treat my 'mined' coins as more then legit should i go hog wild and only pay the 20% gain (or cry if at a loss) and am as clean as  a baby's butt as far as IRS is concerned

(as to what i would do with anon account ...no bitstamp/gox/many wire xfers over 10k with bank where you signed you are not doing this to avoid taxes ) and other stuff ....er maybe i'd have taken a different tact

but with that much paper work at the exchanges/my bank wire xfers (incl the ones the bank flubbed) etc etc...

anyway my back does not have the itchy feeling of an IRS sniper scope now don't ya know

(now if the equipment i got does not do more then just ROI i'm screwed but i'd be in that boat anyway)

anyway what i've done to cope so far at this modest 'hobby' mode of income....only applies to my piece of mind

Searing

Thanks dude for clearing it all up nice and neat

Legally, control implies ownership and sharing a private key is no more complicated than sharing ownership of something.

That is not true.  The 1099 requirement is only for a business and only for payments in excess of $600 for goods or services to an independent contract.   The same requirement applies if a business makes a payment to an independent contractor in dollars, euros, gold coins, or beanie babies as well.

So simple cheat sheet.

1) Are you a business?
If yes, then continue to #2.  If no, then your done, no 1099 is required.
2) Did you make a payment using virtual currency in excess of $600 in value
If yes, then continue to #2.  If no, then your done, no 1099 is required.
3) Was the payment to an independent contractor?
If yes, then filing a 1099 is required.  If no, then no 1099 is required.

IRS job is to collect taxes on income, regardless if it is right or wrong, they just collect taxes on any profit you make.
Your government is the one that set the tax law, the people who you vote for and give them all these big salaries and free health insurance for life are the one who decide the tax percentage.

Now believe it or not, people are making tons of money from BitCoin, probably I am the only one who doesn't.
So "regardless it is right or not" you have to report your BitCoin profit to IRS.

However, remember this, if not for the IRS asking people to report profit from BitCoin, then BitCoin wouldn't worth a shit, as the government can simply ban BitCoin and then your BitCoins become just numbers on your screen.
Example: online poker, how many of you remember how the FBI shut down pokerstars.com and fulltilt.com and many other online poker websites? I still remember the day when opened the poker website and saw the "FBI warning sign"!!!!

So, again, whether it is right or wrong, the law requires you to report it.
I honestly don't understand many of you, you want the whole world to realize BitCoin as currency, yet you know very well that the government tax your current currency "the dollar", what makes BitCoin different?

Technically no one really "owns" any bitcoin. They only own the private key to claim and use a certain amount of bitcoin. The private key can be shared by a lot of different people or even made public (No sane person would actually do this)

No isentions below certain level of income?
No need to report low transactions?

Think they failed to understand BTC and this will be changed or have little or no real effect for most users