Topic: Ok guys, lets say you have $200,000 in BTC... (Read 1668 times)

I would split that amount into several hundred wallets, then I would sell the bitcoin in small amount like 1-2 bitcoin. The IRS won't care if you convert 1-2 btc into USD.

First of all I wouldn't be advising anywhere if I had 200k worth of bitcoin as that would then make you a target for people to attack your system, snoop out your ip address and details and try attacking and accessing your system. 2nd  If had that sort of coin I would be spreading it across many exchanges buying up all types of crypto and getting a wide spread and volume of cryptos that could have a future and spreading coin and get a much wider gain in return. 3rd I would be trading with it and working from home and working around the globe. Would be a dream to have 200k in crypto so much could be done with such amounts. Even a fraction of that would be nice to handle.

I love the occasional post that pops up here saying they shouldn't have to pay tax because 'it's on the internet' or 'I took a risk on it.' I'm sure that'll reduce a court to silence as the superb level of reasoning sinks in and you're sent on your way with handshakes from all.

I'd just pay the tax and get on with my life. Not very sexy but having my life disrupted is not worth a few thousand dollars.

If it was considerably more then I'd move to Germany so I could cash tax free after a year or so.

 

i would just stick with the bitcoin currency, whenever i need to use cash, I'll little amounts at a time.

No, you don't. You don't need to tell them how you made the money or whether it was legal (which is why you can't get out of filing a tax return by claiming the Fifth Amendment), and the only proof you need is that you possess the money (which isn't hard if it's in your bank account). The IRS couldn't care less where your money came from as long you pay your taxes on it.

If the bitcoin were made legally, then legally you need to pay taxes on them then presto...No problem with the IRS. Not to mention it is pretty easy to show how you made bitcoins and where they came from.  Everything you do is documented in the blockchain and all trading sites let you download your trading history.  Should be extremely easy to show how your bitcoins grew.  Either way, simply pay tax and you have nothing to worry about.

omfg, you actually think I'm being serious   . Dude, I'm just bored and came up with a scenario. Legal or illegal, I wish I had that type of money, ha ha.

No, no, no. Not stolen BTC, I said legally made bitcoin and it is a hypothetical question

I would open a gambling website and get the coins changed to cash therefore giving a history of your Bitcoin usage.

You're asking us to explain to you have to cash out stolen Bitcoin and not get into trouble. No, I'm not going to tell you this.  If anyone does want to cash out a huge sum, then provide all addresses and transactions (if asked, or get into trouble - your choice). Remember to pay taxes depending where you live. Some countries do not have a tax on Bitcoin, but others do. It is best to consult a expert when dealing with a huge amount of money.

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Update:
I didn't expect you to admit it. Who would?

OK, lets say you have $200,000 in bitcoin. But you want to convert this bitcoin to cash in a US bank account for spending. You have all this money but you are faced with a major dilemma, the IRS. You can't make any significant purchases (new car, new condo, new house etc.) or they will raise an eyebrow and start asking questions as to where you got the money. You tell them that you have made it LEGALLY online through bitcoin, but you need proof. You explain every detail of how you made this huge amount of bitcoin, but they still don't believe you. Knowing the nature of bitcoin it is difficult to prove to them exactly where this income is coming from. They want records of EVERYTHING.

I have a question for you guys. How would you cash out all this bitcoin? Would you set up  an LLC with a few business bank accounts (Chase, Wells Fargo, PNC, BOA, etc.) and then sell your btc for cash deposits to these accounts on localbitcoins? Would you sell your btc for cash in mail? Would you send to Coin-base and sell your btc for USD bank deposit. Every transaction over $10,000 gets reported to IRS with form 8300. How would you personally cash out all that bitcoin, and be able to use the money freely (By freely I mean without any questions). Not trying to avoid taxes, ha ha.


PS: This is all hypothetical:)....I am just extremely curious, ha ha.