How can Bitcoin be used as a money laundering method? As a result, they will be asking for the source of these dollars when we convert our BTCs and transfer my bank account in dollars.
They will ask us how we won these BTCs. Then how we will give they an answer.
You are right but you are not converting millions and millions of dollars at a time, if you convert little amount of money we can definitely answer how we can earn the answer is through trading. Definitely they will deduct taxes from it, once we are doing transaction in online definitely they will trakc each of your transaction.
you cannot be taxed on commodity trading
You obviously seem to be confusing something. I've been trading gold and oil at commodity&futures markets, and at the end of the year your gains will be taxed and reported by your broker (provided you earned something, of course). Moreover, your losses from previous years (if you had some) will be accounted for, so you get a sort of tax exemption (for the last three years, at least, where I live). If you are in the US, look
here for more info. The system is basically the same in other countries...
Just in case, Bitcoin is considered as a commodity in the US for taxation purposes
maybe you can hide up on fake informations. For some bitcoin wallets dont require you to verify your informations. You can hide your persnoal informations if you are good enough on hiding things here on the web. And i would ask what did blockchain taking act about the illegal transactions down in deep web.
you are right and i am at the same time, lol. the trick is that the irs, at this time, has pretty much said to hold off on declaring profits directly from crypto, unless you have very well documented records.
this is because the irs has yet to settle on a finite source for the moment to moment price of bitcoin as a commodity. new york and the sec currently has a set of protocols for pulling the price of say, "cotton 50 lbs" for any given moment, dating years back. the price of btc for every this very moment differs too much across the board. i brought it up this year with the irs and they have stated that by the end of 2018 they are hoping to have a system in place.
however, if you have always used the same exchange, and have a good set of records, then you can report the capital gains. the benefit of this will be if the irs decides that once they have a good pricing system in place, to retroactively use the info. if the 2019 tax season brings an easy capital gains report for btc, using that may cause a future audit if a tax payer is not careful. but, as of the moment, the irs "says" that crypto exchange gain reporting is fully optional
