Paying TAX - page 3. | Bitcointalksearch.org

frowsiter

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Quote from: BurtW on April 30, 2017, 03:34:17 PM

In the US:

Mining income is taxed as ordinary income at the price on the day and at the time you mine the coins.

Profit/Loss while trading is taxed as a capital gain or loss.

I have paid the income tax on all the coins I have mined and the capital gains tax on all of my trading.

It is good to know that we have to pay taxes in US. In some part of the world of countries where bitcoin concept is not that popular are still tax free. I hope it gets equal everywhere one day so that transferring of bitcoins will be easy from one country to another.

Penjada

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Quote from: the rise on May 07, 2017, 09:38:23 AM

No taxes are imposed from mining in third world countries, all profits need not be reported to the government because there is no law governing them. But personally I do not mind the income tax from this because the profits are more than enough.

Can the government get any evidence of bitcoin minig profits?

Proton2233

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In order for the state to levy a tax on bitcoin for a start it is necessary to recognize as currency. This is no. But no currency, no tax. Regarded as your income can only inflow of foreign currency from the exchange of bitcoin to your account.

Qartersa

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Quote from: danielgold20 on April 30, 2017, 12:52:47 PM

Hey guys Tell me are there people here who declare regarding there mining profit?
I understand that you " need " to pay tax for the profit from mining
can anyone answer or someone who know something regarding this subject?

Thanks

Hello!

There are different laws in different parts of the world so we cannot really answer the question at hand. Nonetheless, it is best to check the tax laws and internal rules and regulations of your State or place of jurisdiction to verify your concern. As we all know, tax evasion is generally a crime.

And regarding your statement that there is a 'need' to pay tax for the profit from mining, it is on a case-to-case basis. We cannot apply one rule for everybody.

I hope it helps!

Amph

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Quote from: NUFCrichard on May 09, 2017, 04:49:49 AM

Quote from: Amph on May 09, 2017, 12:43:46 AM

Quote from: BurtW on May 07, 2017, 04:38:27 AM

Of course you can always lie to the IRS and pay less in taxes than you should according to their regulations.

If you do not get caught then all is well - you are a winner!

If you get caught then you lose and you face:

Paying the taxes anyway
Paying interest on all the taxes you did not pay
Paying huge fines
Going to jail for tax evasion

This is true whether you hide income and capital gains using gold, Bitcoin, good old fashioned US dollars or any other means.

the point is that they will never know, it's more easy to hide with bitcoin, especially if you hide your coins in other altcoin, simply impossible for them to trace all that shit

with gold it's far more easy to get caught, everythign about gold or fiat is traceable, cash the same, people think that cash are anonymous, but they are not, to get cash you need an ATM which is traced

everything that run on visa or mastercard is traced

I wouldn't bet that your Bitcoin transactions are quite as hard to trace as you think. As soon as you have done a KYC verification somewhere, your info is in the system. They can track the coins, I mean that is the point of the blockchain!

Once you get into alts they will get you by auditing exchanges.

We are lucky in Germany that if you buy and hold for 1 year, tax isn't an issue. I think tax could be what destroys bitcoin in the future, it is so complicated for businesses.

i just never expose my address in the public if i was serious about hiding my identity, i'm not now, i don't care i was just giving an example

if for example i want to purchase something i would use every time a new wallet(not a new address) that hold only a tiny fraction of my total bitcoin, those coins would come from mining not purchase on exchange

and if you mine all your income is very anonymous, esspecially with altcoin and their anon features

NUFCrichard

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Quote from: Amph on May 09, 2017, 12:43:46 AM

Quote from: BurtW on May 07, 2017, 04:38:27 AM

Of course you can always lie to the IRS and pay less in taxes than you should according to their regulations.

If you do not get caught then all is well - you are a winner!

If you get caught then you lose and you face:

Paying the taxes anyway
Paying interest on all the taxes you did not pay
Paying huge fines
Going to jail for tax evasion

This is true whether you hide income and capital gains using gold, Bitcoin, good old fashioned US dollars or any other means.

the point is that they will never know, it's more easy to hide with bitcoin, especially if you hide your coins in other altcoin, simply impossible for them to trace all that shit

with gold it's far more easy to get caught, everythign about gold or fiat is traceable, cash the same, people think that cash are anonymous, but they are not, to get cash you need an ATM which is traced

everything that run on visa or mastercard is traced

I wouldn't bet that your Bitcoin transactions are quite as hard to trace as you think. As soon as you have done a KYC verification somewhere, your info is in the system. They can track the coins, I mean that is the point of the blockchain!

Once you get into alts they will get you by auditing exchanges.

We are lucky in Germany that if you buy and hold for 1 year, tax isn't an issue. I think tax could be what destroys bitcoin in the future, it is so complicated for businesses.

Amph

legendary

Activity: 3248

Merit: 1070

Quote from: BurtW on May 07, 2017, 04:38:27 AM

Of course you can always lie to the IRS and pay less in taxes than you should according to their regulations.

If you do not get caught then all is well - you are a winner!

If you get caught then you lose and you face:

Paying the taxes anyway
Paying interest on all the taxes you did not pay
Paying huge fines
Going to jail for tax evasion

This is true whether you hide income and capital gains using gold, Bitcoin, good old fashioned US dollars or any other means.

the point is that they will never know, it's more easy to hide with bitcoin, especially if you hide your coins in other altcoin, simply impossible for them to trace all that shit

with gold it's far more easy to get caught, everythign about gold or fiat is traceable, cash the same, people think that cash are anonymous, but they are not, to get cash you need an ATM which is traced

everything that run on visa or mastercard is traced

dinofelis

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Quote from: BurtW on May 03, 2017, 04:27:14 AM

The answer to the above question about mining income is yes, if your mining was profitable then you are required to pay tax on the profit even if you keep every single Bitcoin you make from mining and do not spend a single satoshi.

What happens if you don't hold the private keys to the mining address ?
Grin

BurtW

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All paid signature campaigns should be banned.

Quote from: the rise on May 07, 2017, 09:38:23 AM

No taxes are imposed from mining in third world countries, all profits need not be reported to the government because there is no law governing them. But personally I do not mind the income tax from this because the profits are more than enough.

This is a new class of signature spammer. The posts mostly make sense but they only visit a thread once, dump a post close to a turd but not close enough to be reported and then move on to another thread. Looking at the post history they spread their "opinions" over the entire system and never revisit any threads. Very annoying. This could be cured by eliminating all paid signature campaigns.

the rise

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DGbet.fun - Crypto Sportsbook

No taxes are imposed from mining in third world countries, all profits need not be reported to the government because there is no law governing them. But personally I do not mind the income tax from this because the profits are more than enough.

BurtW

legendary

Activity: 2646

Merit: 1137

All paid signature campaigns should be banned.

Of course you can always lie to the IRS and pay less in taxes than you should according to their regulations.

If you do not get caught then all is well - you are a winner!

If you get caught then you lose and you face:

Paying the taxes anyway
Paying interest on all the taxes you did not pay
Paying huge fines
Going to jail for tax evasion

This is true whether you hide income and capital gains using gold, Bitcoin, good old fashioned US dollars or any other means.

Amph

legendary

Activity: 3248

Merit: 1070

Quote from: botany on May 03, 2017, 02:00:06 AM

Quote from: Amph on May 03, 2017, 01:43:25 AM

Quote from: BurtW on April 30, 2017, 03:34:17 PM

In the US:

Mining income is taxed as ordinary income at the price on the day and at the time you mine the coins.

Profit/Loss while trading is taxed as a capital gain or loss.

I have paid the income tax on all the coins I have mined and the capital gains tax on all of my trading.

by your words it seems that you need to pay whatever you are going toe xchange your coins or not?
this seems absurd, i was under the impression that as long you don't exchange you don't need to claim your capital, at best you need to declare the consumption, which in fact was payed with fiat
but if i pay in bitcoin my bills i should be fine with no tax, as long as i keep everything in bitcoin, with altcoin would even be more worse...

If people had to pay taxes only when you exchange your goods (or bitcoins) for fiat, then most people will find ways to avoid taxes. Just stick to barter transactions, and you have to pay absolutely no taxes!
I hope that clarifies why you have to pay taxes if mining is profitable, whether you sell the bitcoins or not.

how can they know how many coins you are holding? the beauty of bitcoin is that someone can hold millions of $ worth in bitcoin without anyone else knowing about their existence

there is no way for the IRS to know how many you generate via mining it's simply impossible, you can go ahead and claim the false or declare only 10%

botany

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Quote from: BurtW on May 03, 2017, 04:27:14 AM

Quote from: botany on May 03, 2017, 02:00:06 AM

Quote from: Amph on May 03, 2017, 01:43:25 AM

Quote from: BurtW on April 30, 2017, 03:34:17 PM

In the US:

Mining income is taxed as ordinary income at the price on the day and at the time you mine the coins.

Profit/Loss while trading is taxed as a capital gain or loss.

I have paid the income tax on all the coins I have mined and the capital gains tax on all of my trading.

by your words it seems that you need to pay whatever you are going toe xchange your coins or not?
this seems absurd, i was under the impression that as long you don't exchange you don't need to claim your capital, at best you need to declare the consumption, which in fact was payed with fiat
but if i pay in bitcoin my bills i should be fine with no tax, as long as i keep everything in bitcoin, with altcoin would even be more worse...

If people had to pay taxes only when you exchange your goods (or bitcoins) for fiat, then most people will find ways to avoid taxes. Just stick to barter transactions, and you have to pay absolutely no taxes!
I hope that clarifies why you have to pay taxes if mining is profitable, whether you sell the bitcoins or not.

In the US even barter transactions are taxable. However I expect most people do not fill out the form used to report taxes on barter transactions. Also it is very difficult to calculate the tax. If I give you one of my apples for one of your oranges then how much tax to we each owe?

The answer to the above question about mining income is yes, if your mining was profitable then you are required to pay tax on the profit even if you keep every single Bitcoin you make from mining and do not spend a single satoshi.

I was actually agreeing with you and stating that barter cannot be used to avoid taxes.
Most countries have the concept of 'deemed' transactions - 'deemed sale', 'deemed dividends', etc. to make sure that you cannot avoid taxes.

olushakes

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Quote from: danielgold20 on April 30, 2017, 01:34:00 PM

Quote from: pixie85 on April 30, 2017, 01:06:58 PM

Law is not the same in every part of the world. This is a country specific question.
It also depends on the amount of Bitcoins you're mining. If it's a hobby that brings you $100 a month nobody should care.

You want to tell me that there is country that I will not need to pay tax?and no I am looking to invest We purchase already 100 Mainer and we are looking the tax subject right now

When it comes to tax issues the law is dicey in most countries as there is no specific law yet to take care of income such as this. In my country for example, if I have a mining farm not too big to attract attention, I can avoid paying tax simply because of the way our financial system is as at the moment but this is not universal.

When you are now looking at the tax implications, this is something that should have been done even before the acquisition of equipment that should be part of your feasibility study, what if the law in your locality frowns at things like this and the tax could eventually kill the business, that means that all the investment have gone down the drain.

BurtW

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All paid signature campaigns should be banned.

Quote from: botany on May 03, 2017, 02:00:06 AM

Quote from: Amph on May 03, 2017, 01:43:25 AM

Quote from: BurtW on April 30, 2017, 03:34:17 PM

In the US:

Mining income is taxed as ordinary income at the price on the day and at the time you mine the coins.

Profit/Loss while trading is taxed as a capital gain or loss.

I have paid the income tax on all the coins I have mined and the capital gains tax on all of my trading.

by your words it seems that you need to pay whatever you are going toe xchange your coins or not?
this seems absurd, i was under the impression that as long you don't exchange you don't need to claim your capital, at best you need to declare the consumption, which in fact was payed with fiat
but if i pay in bitcoin my bills i should be fine with no tax, as long as i keep everything in bitcoin, with altcoin would even be more worse...

If people had to pay taxes only when you exchange your goods (or bitcoins) for fiat, then most people will find ways to avoid taxes. Just stick to barter transactions, and you have to pay absolutely no taxes!
I hope that clarifies why you have to pay taxes if mining is profitable, whether you sell the bitcoins or not.

In the US even barter transactions are taxable. However I expect most people do not fill out the form used to report taxes on barter transactions. Also it is very difficult to calculate the tax. If I give you one of my apples for one of your oranges then how much tax to we each owe?

The answer to the above question about mining income is yes, if your mining was profitable then you are required to pay tax on the profit even if you keep every single Bitcoin you make from mining and do not spend a single satoshi.

By IRS rules you would need to do the following:

Keep a ledger showing every transaction that delivers mined Bitcoins to you.
Note the date, the amount of Bitcoins you receive and the price of Bitcoins on that date (use can use the average price over 24 hours).
At the end of the year you add up all of the USD you would have received if you had immediately sold all of the mined Bitcoins as soon as you had received them (even though you did not spend a single one).
That is our income from mining for the year
You can now deduct your expenses
You can deduct the cost of the electricity used to produce the Bitcoins, of if you live in your mother's basement and did not pay for the electricity then you have no electricity cost to deduct
You did buy the Bitcoin mining equipment so you can deduct the allowed depreciation value of the equipment (using section 179 you can deduct the entire cost of the equipment the first year but then you have nothing to deduct for all the income you get in any subsequent years)

When you go to spend the Bitcoins you mined or exchange them for USD then the cost basis for your capital gains tax on the coins is the amount you claimed as income in the above process for each lot of coins mined.

botany

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Quote from: Amph on May 03, 2017, 01:43:25 AM

Quote from: BurtW on April 30, 2017, 03:34:17 PM

In the US:

Mining income is taxed as ordinary income at the price on the day and at the time you mine the coins.

Profit/Loss while trading is taxed as a capital gain or loss.

I have paid the income tax on all the coins I have mined and the capital gains tax on all of my trading.

by your words it seems that you need to pay whatever you are going toe xchange your coins or not?
this seems absurd, i was under the impression that as long you don't exchange you don't need to claim your capital, at best you need to declare the consumption, which in fact was payed with fiat
but if i pay in bitcoin my bills i should be fine with no tax, as long as i keep everything in bitcoin, with altcoin would even be more worse...

If people had to pay taxes only when you exchange your goods (or bitcoins) for fiat, then most people will find ways to avoid taxes. Just stick to barter transactions, and you have to pay absolutely no taxes!
I hope that clarifies why you have to pay taxes if mining is profitable, whether you sell the bitcoins or not.

Dudeperfect

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I never had any mining profit as I am not in the mining but I pay tax for the transactions of conversion of bitcoin to fiat currency. I use a service and they charge 15% tax on transaction fees (aka mining fees) and it is different from the service charge levied by the service provider.

I usually use localbitcoins for smaller amounts (there is no tax as payment is sent directly from individual) and unocoin for larger amounts (where tax is charged on the transaction fees).

Amph

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Quote from: BurtW on April 30, 2017, 03:34:17 PM

In the US:

Mining income is taxed as ordinary income at the price on the day and at the time you mine the coins.

Profit/Loss while trading is taxed as a capital gain or loss.

I have paid the income tax on all the coins I have mined and the capital gains tax on all of my trading.

by your words it seems that you need to pay whatever you are going to exchange your coins or not?

this seems absurd, i was under the impression that as long you don't exchange you don't need to claim your capital, at best you need to declare the consumption, which in fact was payed with fiat

but if i pay in bitcoin my bills i should be fine with no tax, as long as i keep everything in bitcoin, with altcoin would even be more worse...

zeze18

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I think every country has different regulation on taxes and other, if in my country until now there has been no government regulation mentioning tax payment about ownership or income obtained from bitcoin business either through trading mining or investment

BitHodler

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Thanks for confirming. I must admit, you'll probably fit in the category of far minorities that are honest about everything they make through mining and profit through trading.

I personally would not walk that exact same path as you do. Mainly because of the fact that I refrain from being used as a money tree by my local government.

I pay enough tax over everything that isn't Bitcoin related already, so why would I pay another load of taxes over my holdings and profits in Bitcoin? It doesn't make sense for me, and never will.

Topic: Paying TAX - page 3. (Read 5240 times)