Topic: MSN article on BTC and taxes. - page 2. (Read 491 times)
Everyone should stop paying taxes, let the us government sell its bitcoins to get its money ,then they will be forced to raise the price and that is good
My wife just emailed me this article. The IRS is really trying to scare you into reporting your transactions.
https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
I really don't understand why the mainstream media is so against Bitcoins at all and when it comes to the taxes, they should ask the retailers that accepts Bitcoins because the total price people pay includes the taxes as well. And no one has the right to question where you get your bitcoins because it is virtual. https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
This is the reason why we should really promote a decentralized bank of our own, where we can save our money without any questions from any of that banks.
A cryptocurrency bank? This idea isn't worth our time, really. A crypto bank won't serve any purpose in the world of decentralized coins and if they are to become centralized, what's the point of having a cryptocurrency in the first place? Just to have a fake feeling of being in control? No thank you.
I'm curious to see how these regulations play out because everything is still pretty foggy to me.
They will most likely destroy the experience for every cryptocurrency user and turn the whole thing into a maze of do's and don'ts that only government officials will be able to navigate. If I buy a cell phone from you and give you .002 btc for it. Where is the cash conversion? There was no conversion. It’s a property to property trade.
What was the value of the phone? What price did you pay for the bitcoin? Lets say the phone is worth $30. Lets say you bought the BTC when it was $1000 per coin. This means you paid $2 for the BTC some time in past and now received $30 in value for it. Thus you have $28 in taxable gain.
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Also since it’s property. If I sell you a 100 bucks worth of btc for 100 cash. Then it’s a property purchase like I sold you that cell phone for a 100 bucks.
What did you pay for the BTC? If less than $100, then you have taxable gain. If more than $100 then you have a loss that can offset other gains.
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People sell stuff all the time on eBay and Facebook with no income taxes paid.
If they gained value, then they should be paying income tax. If they are getting rid of their old unwanted stuff, at less than they paid, then they don't have a gain and thus don't have tax due.
How can they determine the value of a used cell phone? Since crypto is property per the IRS. Every piece of property bartered in the US that was purchased with USD is subject to tax also. If I buy a pencil at Walmart with USD and trade you for a calculator then I owe capital gains tax. We dont know how much for sure because there is no way to value a used calculator. All we know is its worth more than a pencil is. So that pencil was converted to cash and used to make a purchase. Even though no cash was exchanged
This makes it almost impossible to use crypto on a daily basis for living. If starbucks accepted crypto for coffee. You would have to keep track of every cup you bought all year since your crypto property was magically converted to cash and used to buy coffee. Imagine trying to live off crypto only. Not that it is really possible right now but could be someday. You would have to document every single purchase all year.
I'm curious to see how these regulations play out because everything is still pretty foggy to me.
If I buy a cell phone from you and give you .002 btc for it. Where is the cash conversion? There was no conversion. It’s a property to property trade.
What was the value of the phone? What price did you pay for the bitcoin? Lets say the phone is worth $30. Lets say you bought the BTC when it was $1000 per coin. This means you paid $2 for the BTC some time in past and now received $30 in value for it. Thus you have $28 in taxable gain.
This. It's pretty simple. The IRS expects you to treat every virtual currency transaction as taxable. They keep repeating it, but people keep saying "but there's no fiat involved!"
Every "position" you hold in cryptocurrency has a "basis": What price did you buy it? That's the basis. What price did you sell it at (whether for cash or in exchange for goods/services)? That's the adjusted basis.
This is from the IRS guidance on virtual currency published in 2014:
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For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt.
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If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency.
My wife just emailed me this article. The IRS is really trying to scare you into reporting your transactions.
https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
If you make a purchase with BTC, and you bought your bitcoins at a low rate, then it is obvious you will have capital gains. This would qualify as a barter transaction and would be equivalent to a sale of bitcoins. If there was no tax on such transactions, people would only indulge in barter transactions and never sell assets to realize capital gains.
My wife just emailed me this article. The IRS is really trying to scare you into reporting your transactions.
https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
This is the reason why we should really promote a decentralized bank of our own, where we can save our money without any questions from any of that banks.
If I buy a cell phone from you and give you .002 btc for it. Where is the cash conversion? There was no conversion. It’s a property to property trade.
What was the value of the phone? What price did you pay for the bitcoin? Lets say the phone is worth $30. Lets say you bought the BTC when it was $1000 per coin. This means you paid $2 for the BTC some time in past and now received $30 in value for it. Thus you have $28 in taxable gain.
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Also since it’s property. If I sell you a 100 bucks worth of btc for 100 cash. Then it’s a property purchase like I sold you that cell phone for a 100 bucks.
What did you pay for the BTC? If less than $100, then you have taxable gain. If more than $100 then you have a loss that can offset other gains.
Quote
People sell stuff all the time on eBay and Facebook with no income taxes paid.
If they gained value, then they should be paying income tax. If they are getting rid of their old unwanted stuff, at less than they paid, then they don't have a gain and thus don't have tax due.
So the people that ordered 100k worth of miners from Bitmain. Will they need to report that if they paid in BCH and Bitmain is in China?
Well, OP did say purchasing with BTC and not purchasing BTC. In our country, whenever you make a purchase, you are also paying for a value-added tax, so there's that. It would be near-impossible for the IRS to keep track of your daily spendings, especially if you've mixed them first before sending them to purchase something you like. Taxing bitcoin is very vague when it comes to the tiniest of details; the government can't just tax you if you have bitcoins in your pocket, there needs to be some for of gain on your end that they know for them to get a tax cut, so how does that work in the long run if services like mixers exist?
Even if you are using mixed coins, you have to account for the merchant or payment processor you are interfacing with. Do they know your physical address? Email address, IP address? These details can be used to identify you. They can also be "leaked" because of insecure third party trackers/cookies. Between precise timestamping, the immutable blockchain and leaked transaction data/personally identifiable information, clustering attacks and blockchain analysis of a mixer's wallets can (up to a certain probability) be used to identify your originating wallet. And if you use a lightweight client like Electrum, you're also leaking wallet information to Electrum servers that can help to corroborate that connection (and also link your wallet to an identifiable IP address range).
I don't think the IRS necessarily cares to do this over low-value cryptocurrency transactions. But I think it's important to be aware that the government (in tandem with blockchain analysis companies) knows much more than people tend to think about your transactions. We shouldn't assume they don't have any means to deanonymize us. And we should be weary of exposing our real personal information, IP address, etc. when interacting with merchants and third party payment processors:
There are actually treasure troves of deanonymization tools available to governments which have been developed by Chainalysis and their competitors for years. They've got databases full of metadata like bloom filters, leaked tracker information and PII data, IP address data. For all we know, companies like Bitpay or other merchants are honeypots to identify our wallets via address clustering.
They're watching us and the problem is only going to get worse. If you think Bitcoin is "private" by default, then read this: arxiv.org/pdf/1708.04748.pdf
They're watching us and the problem is only going to get worse. If you think Bitcoin is "private" by default, then read this: arxiv.org/pdf/1708.04748.pdf
What if you earn btc by mining? You are earning an income but if it just sits in your wallet how do you pay taxes on your earned income? What is the taxable value of btc? Are you suppose to keep track of the btc daily dollar value as you earn it to pay your income tax at the end of the year? If that’s the case I’m going to write off my equipment and my electric bill. Then again if you sell your mining equipment that’s income and you have to pay taxes on that too. I’m merely trying to make sense of all this. Not avoid taxes.
I’ve never declared any of my bitcoin to fiat earnings. I am a HODLER though & haven’t sold a lot of bitcoin’s but at some pojnt in the future, maybe years away it’s going to be something I’ll have to employ an accountant for.
The tracking is the same as if you were to win big a casino or sell your car. It's limited how well the IRS can track the transactions, but the responsibility to pay taxes owed is on the tax payer.
If you just buy, hold and occasionally take profit, it's simple. It's a lot more complicated for anyone who uses Bitcoin as a medium of exchange rather than just an investment. Same goes for altcoin traders, since all market liquidity is in BTC markets, not fiat markets. Tracking the USD cost basis and capital gain/loss of every transaction can be a nightmare. I'm hoping that bills like this one can at least give casual users a bit of breathing room:
The fact of it is, if you earn an income through bitcoin then you are legally bound to pay taxes on that income, just because you earn your money in a different way to someone else does not mean that you should not pay taxes the same as they do.
I'm willing to pay taxes on my capital gains. But I'll tell you, my accountant hates me, and rightly so. It's annoying that the tax code was just overhauled and yet there is still no sensible regime for dealing with day-to-day transactions. If you use bitcoins just like a foreign currency, why shouldn't they be treated as such?
The fact of it is, if you earn an income through bitcoin then you are legally bound to pay taxes on that income, just because you earn your money in a different way to someone else does not mean that you should not pay taxes the same as they do. We can argue all day and night about if taxation should exist and what's the correct level but there should not be any debate as to if earnings from crypto are taxable or not, they are entirely the same as earnings from anything else and the very fact that people are avoiding tax on them is why we are seeing stricter regulation being put in to place by governments across the world.
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
First, you don't incur taxes if you purchase BTC. You incur a tax liability when you sell it back for Dollars.
The tracking is the same as if you were to win big a casino or sell your car. It's limited how well the IRS can track the transactions, but the responsibility to pay taxes owed is on the tax payer.
If you walk into your bank with $10,000 or more you have to file a form explaining exactly where you got the money. So, yes, your Banker will ask you about it.
The questions are precisely made to verify that you don't own the cash illegal, i.e,. through selling drugs or money laundering or any other illegal transaction.
Well, OP did say purchasing with BTC and not purchasing BTC. In our country, whenever you make a purchase, you are also paying for a value-added tax, so there's that. It would be near-impossible for the IRS to keep track of your daily spendings, especially if you've mixed them first before sending them to purchase something you like. Taxing bitcoin is very vague when it comes to the tiniest of details; the government can't just tax you if you have bitcoins in your pocket, there needs to be some for of gain on your end that they know for them to get a tax cut, so how does that work in the long run if services like mixers exist?
And no, I don't promote money laundering.
My wife just emailed me this article. The IRS is really trying to scare you into reporting your transactions.
https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
https://www.msn.com/en-us/money/markets/if-you-own-bitcoin-heres-how-much-you-owe-in-taxes/ar-AAv9Evn?li=BBnbfcL
If you make a purchase with BTC. Just how do they think they can charge taxes on that purchase? What a load of crap. Here is another thing that pisses me off. Have you ever walked into your bank with a large amount of cash and been questioned about how you got it by the banker? Its cash. Its not illegal to own it and you don't have to explain how you got it. You saved it. I can bet though if I sold a bunch of BTC person to person and walked into the bank with cash there would be questions.
If you make a purchase with BTC, and you bought your bitcoins at a low rate, then it is obvious you will have capital gains. This would qualify as a barter transaction and would be equivalent to a sale of bitcoins. If there was no tax on such transactions, people would only indulge in barter transactions and never sell assets to realize capital gains.
What doesn’t make sense to me in the article is that if you make a purchase with btc your selling it for cash and then purchasing with it since it is property. How are you selling it for cash? If I buy a cell phone from you and give you .002 btc for it. Where is the cash conversion? There was no conversion. It’s a property to property trade. Also since it’s property. If I sell you a 100 bucks worth of btc for 100 cash. Then it’s a property purchase like I sold you that cell phone for a 100 bucks. People sell stuff all the time on eBay and Facebook with no income taxes paid.
Maybe they are using the old gold excuse, in many countries you cannot use gold to buy for stuff so even if you had a bunch of gold you cannot buy anything with it, you need to convert it to dollars first and then you can use those dollars to buy whatever you want, I suppose they are trying to make it seem as if the reason the person from which you are buying a product is the value in dollars of bitcoin, so even if you do not convert your bitcoin to cash they can say there is some kind of virtual conversion going on and they create a taxable event.This could be a huge problem for guys that bought 50k worth of miners and paid with crypto.
What doesn’t make sense to me in the article is that if you make a purchase with btc your selling it for cash and then purchasing with it since it is property. How are you selling it for cash? If I buy a cell phone from you and give you .002 btc for it. Where is the cash conversion? There was no conversion. It’s a property to property trade. Also since it’s property. If I sell you a 100 bucks worth of btc for 100 cash. Then it’s a property purchase like I sold you that cell phone for a 100 bucks. People sell stuff all the time on eBay and Facebook with no income taxes paid.
Maybe they are using the old gold excuse, in many countries you cannot use gold to buy for stuff so even if you had a bunch of gold you cannot buy anything with it, you need to convert it to dollars first and then you can use those dollars to buy whatever you want, I suppose they are trying to make it seem as if the reason the person from which you are buying a product is the value in dollars of bitcoin, so even if you do not convert your bitcoin to cash they can say there is some kind of virtual conversion going on and they create a taxable event. Jump to: