Is letting official government agencies know you have BTC a good idea? (USA)

hilariousandco

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Quote from: Malexo on February 01, 2014, 07:33:53 PM

sure, i would like to declare my btc when i cash out, but realistically... would it not be better to keep everything as discrete as possible in regards to btc ownership? what if between now and when i decide to cashout btc becomes illegal? now they have my on record stating that i own btc.

how do you guys manage your btc?

I wouldn't tell any government agency about coins unless it's required to do so, which currently you're not. Each country has different laws on taxation but Bitcoins would probably fall under capital gains tax (at least they do in the UK). If you wanted to avoid paying any taxes just sell them for cash face to face, but be aware of the consequences if you get caught selling over the threshold.

keithers

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Quote from: Malexo on February 01, 2014, 09:29:32 PM

Quote from: keithers on February 01, 2014, 08:29:59 PM

Letting the govt know anything additional than what is required is a mistake. If you are earning significant income from selling your btc and not declaring anything, that could be an even bigger mistake. You are exposing yourself to the chance for an audit in which you will more than likely end up paying more than you would have if you just properly claimed your capital gains.

do we havea ny risk analysis professionals in the house? Grin

you mean the likelihood of an audit? Don't think anyone will be able to give you a percentage chance on that. What you could do is make sure your withdraws don't exceed the amount of your deposits. Like for instance if you deposited 800 back in September, withdraw only $800 or less. Since you don't yet receive at 1099 from wallet services it is pretty much the honor system.

TheButterZone

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Malexo

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Quote from: keithers on February 01, 2014, 08:29:59 PM

Letting the govt know anything additional than what is required is a mistake. If you are earning significant income from selling your btc and not declaring anything, that could be an even bigger mistake. You are exposing yourself to the chance for an audit in which you will more than likely end up paying more than you would have if you just properly claimed your capital gains.

do we havea ny risk analysis professionals in the house? Grin

keithers

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This is the land of wolves now & you're not a wolf

Letting the govt know anything additional than what is required is a mistake. If you are earning significant income from selling your btc and not declaring anything, that could be an even bigger mistake. You are exposing yourself to the chance for an audit in which you will more than likely end up paying more than you would have if you just properly claimed your capital gains.

BCB

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BCJ

I'm not going to advise you to break the law on a public forum. That is a choice we all have to make for ourselves. I may not always drive the speed limit, but I'm ready to "pay" the consequences when I do. Same things with btc. The government has declared that decentralized virtual currency is "value that substitutes for real currency" so whether or not you receive a pay check in cash, or check or funds in BTC there are always tax implications. It is up to you to weight the risks and benefits of not reporting.

Unless you want to give us your US citizenship:
http://www.forbes.com/sites/danielmitchell/2012/05/11/facebook-billionaire-gives-up-citizenship-to-escape-bad-american-tax-policy/

Or become a "Stateless Citizen":
http://www.nostate.com/

Malexo

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thanks for theelaborate reply BCB.
seems like its a bit of dice rolling. if you dont plan on living lavishly with your btc, you can justify not declaring it, it would seem, but if you have a bunch of btc and plan on buying a house or a nice car with it, or you live in the limelight, it is probably a good idea to just declare it.

would that be accurate?

BCB

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BCJ

Dealing in cash is the best way to avoid paying taxes. Trillions in taxes are avoided by cash transactions (service industry, tips, cash payments etc).

There is no way for tax authorities to know about cash transactions. (Except when they find out you don't have a job but are now driving a yellow lambo.) People have reported on enemies for such things.

If you don't report and you get audited they may ask for an audit of your home, your assets etc? It depends on what you risk appetite of eventually getting caught. Even Madoff after 40 year finally got caught.

You can certainly write off your expenses used to mine, but you have to have some income to write it off against. So you would have to delare something. An those deductions should be larger then the standard tax deduction for your tax bracket to have any benefit.

But this is a more complex problem if you do not convert your BTC to fiat and the IRS has yet to rule on this despite the GAO and the National Taxpayer's advocate requesting the same.

Malexo

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Quote from: BCB on February 01, 2014, 07:35:32 PM

I declare all of my BTC profits and losses on my annual income taxes each year as capital gains.

that's great and all but if you could simply cash out via p2p transactions without ever declaring your btc, would you?
you cant now because it is declared and they know you own it, but if they never knew you own it what benefit is there to disclosing?

also, if you declare btc can you file for tax returns if you mine? (on hydro & gear?)

BCB

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BCJ

I declare all of my BTC profits and losses on my annual income taxes each year as capital gains.

Malexo

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sure, i would like to declare my btc when i cash out, but realistically... would it not be better to keep everything as discrete as possible in regards to btc ownership? what if between now and when i decide to cashout btc becomes illegal? now they have my on record stating that i own btc.

how do you guys manage your btc?

Topic: Is letting official government agencies know you have BTC a good idea? (USA) (Read 790 times)