Topic: Taxes on Bitcoin - page 3. (Read 10930 times)
I have a question... so if i cashout 11k BTC in GBP i dont have to pay capital gains right since you get 11k personal allowance per year. Does it matter what you earn as an income or does income not change captial gains tax?
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people from all over the world are buying bitcoins and no one is paying taxes at all ,maybe the big whales are paying taxes and even they are waiting for the price hike and and when they buy it and split it in such a way that they do not have to pay taxes a lot .
Exchange will probably charge taxes indirectly and sometimes I found an exchanger which clearly stated that they will charge few percents for the taxes. It means not only whales which were charged but also an individual who have the intention to buy bitcoin. Exchangers which have official company in some states also required paying taxes thus they will burden this to the customers
people from all over the world are buying bitcoins and no one is paying taxes at all ,maybe the big whales are paying taxes and even they are waiting for the price hike and and when they buy it and split it in such a way that they do not have to pay taxes a lot .
Good to know the rules for reporting tax in US, especially after mined bitcoin we should report, lol. Since I don't mine any more (it's too tough to do now), it doesn't really matter, but thanks to DebitMe and marseille to clarify the details.
I live in a European country. Here there is no specific legislation about bitcoin and tax authorities apply a community directive of the European Union where bitcoin is a form of payment. Furthermore, the higher european court decided that all transactions, i.e purchases and sales with bitcoin should be exempt from Value Added Tax (VAT) due to VAT is applied only in good and services with end consumer and bitcoin is considered as an eternally transferable value like as fiat money https://yro.slashdot.org/story/15/07/19/1235203/bitcoin-exempt-from-vat-says-european-court-of-justice
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
This is interesting. The question is how the IRS will know that I mined bitcoin, if no pool reports it to the IRS. Many pools are not even in US, I doubt they will take the trouble to report to IRS, moreover the pool has no idea which country I live.
The IRS will probably not know if you mine bitcoins or not, especially on the level of home mining. But the question was how you should report your income. What your suggesting is tax evasion which is illegal in the United States and probably most countries in the world. Just because the IRS doesn't know about something doesn't mean it is OK not to do it.
I know some friends report the bitcoin income only when they sell them. They report it like capital gains and deduct their mining efforts/cost etc. But they don't seem to report it after mining, as it seems too much cumbersome.
As a CPA I would advise against this. They really should be reporting that income in the year it was earned. If they get audited they would certainly be assessed penalties and interest on the unpaid taxes associated with the mining.
OK Got it. Thanks for the info. But if I buy bitcoin from exchanges, I don't need to report until I sell it right? It should be just like the stock trading. For mining it could be different due to the cost base. Otherwise I don't see much diff.
Yes I agree, if you buy it from an exchange, then your basis is whatever you paid, and when you sell it you will either recognize a gain or a loss. (hopefully a gain, lol). Although I am unfamiliar of reporting requirements. For example, if you have a foreign bank account, you need to report that to the IRS with amounts and what not. I don't believe that is required with bitcoin, but I am not totally sure.
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
This is interesting. The question is how the IRS will know that I mined bitcoin, if no pool reports it to the IRS. Many pools are not even in US, I doubt they will take the trouble to report to IRS, moreover the pool has no idea which country I live.
The IRS will probably not know if you mine bitcoins or not, especially on the level of home mining. But the question was how you should report your income. What your suggesting is tax evasion which is illegal in the United States and probably most countries in the world. Just because the IRS doesn't know about something doesn't mean it is OK not to do it.
I know some friends report the bitcoin income only when they sell them. They report it like capital gains and deduct their mining efforts/cost etc. But they don't seem to report it after mining, as it seems too much cumbersome.
As a CPA I would advise against this. They really should be reporting that income in the year it was earned. If they get audited they would certainly be assessed penalties and interest on the unpaid taxes associated with the mining.
OK Got it. Thanks for the info. But if I buy bitcoin from exchanges, I don't need to report until I sell it right? It should be just like the stock trading. For mining it could be different due to the cost base. Otherwise I don't see much diff.
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
This is interesting. The question is how the IRS will know that I mined bitcoin, if no pool reports it to the IRS. Many pools are not even in US, I doubt they will take the trouble to report to IRS, moreover the pool has no idea which country I live.
The IRS will probably not know if you mine bitcoins or not, especially on the level of home mining. But the question was how you should report your income. What your suggesting is tax evasion which is illegal in the United States and probably most countries in the world. Just because the IRS doesn't know about something doesn't mean it is OK not to do it.
I know some friends report the bitcoin income only when they sell them. They report it like capital gains and deduct their mining efforts/cost etc. But they don't seem to report it after mining, as it seems too much cumbersome.
As a CPA I would advise against this. They really should be reporting that income in the year it was earned. If they get audited they would certainly be assessed penalties and interest on the unpaid taxes associated with the mining.
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
This is interesting. The question is how the IRS will know that I mined bitcoin, if no pool reports it to the IRS. Many pools are not even in US, I doubt they will take the trouble to report to IRS, moreover the pool has no idea which country I live.
The IRS will probably not know if you mine bitcoins or not, especially on the level of home mining. But the question was how you should report your income. What your suggesting is tax evasion which is illegal in the United States and probably most countries in the world. Just because the IRS doesn't know about something doesn't mean it is OK not to do it.
I know some friends report the bitcoin income only when they sell them. They report it like capital gains and deduct their mining efforts/cost etc. But they don't seem to report it after mining, as it seems too much cumbersome.
It is good topic.
First of all it will depend on the country and the nature of the transaction.
If you are just doing private transactions there is anything to tax, but governments are getting more creative every day. If the crypto transaction is part of a business deal I would assume that the same tax rules apply as would for a transaction with fiat money.
But for now I think some rules concerning cryto transactions are not described completely in laws.
I mean mechanism and system of laws and taxes has not been completely created.
First of all it will depend on the country and the nature of the transaction.
If you are just doing private transactions there is anything to tax, but governments are getting more creative every day. If the crypto transaction is part of a business deal I would assume that the same tax rules apply as would for a transaction with fiat money.
But for now I think some rules concerning cryto transactions are not described completely in laws.
I mean mechanism and system of laws and taxes has not been completely created.
Please do not give what you "think" because it is not true and frankly doesn't matter. You need to specify what country your giving your "opinion" about also, because everything you just said above is FUD for the United States, which has actually pretty clearly laid out how bitcoins should be taxed.
It is good topic.
First of all it will depend on the country and the nature of the transaction.
If you are just doing private transactions there is anything to tax, but governments are getting more creative every day. If the crypto transaction is part of a business deal I would assume that the same tax rules apply as would for a transaction with fiat money.
But for now I think some rules concerning cryto transactions are not described completely in laws.
I mean mechanism and system of laws and taxes has not been completely created.
First of all it will depend on the country and the nature of the transaction.
If you are just doing private transactions there is anything to tax, but governments are getting more creative every day. If the crypto transaction is part of a business deal I would assume that the same tax rules apply as would for a transaction with fiat money.
But for now I think some rules concerning cryto transactions are not described completely in laws.
I mean mechanism and system of laws and taxes has not been completely created.
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
This is interesting. The question is how the IRS will know that I mined bitcoin, if no pool reports it to the IRS. Many pools are not even in US, I doubt they will take the trouble to report to IRS, moreover the pool has no idea which country I live.
The IRS will probably not know if you mine bitcoins or not, especially on the level of home mining. But the question was how you should report your income. What your suggesting is tax evasion which is illegal in the United States and probably most countries in the world. Just because the IRS doesn't know about something doesn't mean it is OK not to do it.
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
This is interesting. The question is how the IRS will know that I mined bitcoin, if no pool reports it to the IRS. Many pools are not even in US, I doubt they will take the trouble to report to IRS, moreover the pool has no idea which country I live.
greetings all,,here I would like to inquire about bitcoin,,, if someone had a number of bitcoin is more than 10 to 100 BTC in person and not the company,what concerned required to report ownership to the appropriate government agency?
And is there any standard rules governing the taxation of bitcoin?
And is there any standard rules governing the taxation of bitcoin?
I would say you can use any of the major exchanges, as long as you continue to use the same one. You would want to use the one with the highest price, as that would give you the most basis, but just be consistent. Would look really fishy to be jumping around all the time using different exchange prices without a valid reason.
So, to answer your second part, think about it like this. You are walking down the street and find an ounce of gold on the ground and say 1 ounce of gold is currently worth $1000. You now have income of $1000 that is due in the current year. So everything is hunky dory, you pay the tax on your fortunate find, but decide to sell the gold next year when the price is $1500 an ounce. You will now owe a $500 capital gain.
It is the same for bitcoin. When you mine, you "find bitcoins" that you would owe ordinary income on, and you would need to record a basis for. When you sell those bitcoins, you will owe capital gains tax based on the appreciated value of the coins you mined.
His response isn't different than mine, he just isn't referencing mining but is talking about buying and holding bitcoin for a period of time. You won't owe capital gains on the appreciation until you sell it.
Does that clear it up a bit?
My question comes to the fact that I'm used to treating my held coins as not taxable. Sure, you can report how your investment is doing each year, or month, but this means you are monitoring the price and frequently reporting gains and losses, like a trader, instead of just doing it when you finally decide to sell it.
I sell coins over localbitcoins. So I treat them as inventory instead of as an investment. So once a month I revalue my inventory and put the difference to a gain or loss account so my balance sheet stays up to date with actual values.
I would say you can use any of the major exchanges, as long as you continue to use the same one. You would want to use the one with the highest price, as that would give you the most basis, but just be consistent. Would look really fishy to be jumping around all the time using different exchange prices without a valid reason.
So, to answer your second part, think about it like this. You are walking down the street and find an ounce of gold on the ground and say 1 ounce of gold is currently worth $1000. You now have income of $1000 that is due in the current year. So everything is hunky dory, you pay the tax on your fortunate find, but decide to sell the gold next year when the price is $1500 an ounce. You will now owe a $500 capital gain.
It is the same for bitcoin. When you mine, you "find bitcoins" that you would owe ordinary income on, and you would need to record a basis for. When you sell those bitcoins, you will owe capital gains tax based on the appreciated value of the coins you mined.
His response isn't different than mine, he just isn't referencing mining but is talking about buying and holding bitcoin for a period of time. You won't owe capital gains on the appreciation until you sell it.
Does that clear it up a bit?
My question comes to the fact that I'm used to treating my held coins as not taxable. Sure, you can report how your investment is doing each year, or month, but this means you are monitoring the price and frequently reporting gains and losses, like a trader, instead of just doing it when you finally decide to sell it.
Hi Everybody,
When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?
Thanks for your help.
In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?
Thanks for your help.
I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.
You have to pay tax on the mining of bitcoin. You can deduct things like cost of machines (depreciation) and electricity, but tax is still owed. Consult an accountant (like me) for further insight.
Really? but how to calculate the value of the bitcoin? at the time of mined? Say I got each day some bitcoins because of mining, I have to record the price that day for my tax purpose? It will be a lot of work.
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
There are stances completely different to yours, for example:
To the best of my understanding. When I keep BTC in BTC any income I make in BTC is not taxable as to Federal Income Tax. When I cash out BTC, and have made a profit, that is taxable as income. State taxation laws will vary. Can you be more specific about the situation you are seeking clarification on please?
Best:
George D. Greenberg, Esq.
www.attorneybitcoin.com
Best:
George D. Greenberg, Esq.
www.attorneybitcoin.com
I would say you can use any of the major exchanges, as long as you continue to use the same one. You would want to use the one with the highest price, as that would give you the most basis, but just be consistent. Would look really fishy to be jumping around all the time using different exchange prices without a valid reason.
So, to answer your second part, think about it like this. You are walking down the street and find an ounce of gold on the ground and say 1 ounce of gold is currently worth $1000. You now have income of $1000 that is due in the current year. So everything is hunky dory, you pay the tax on your fortunate find, but decide to sell the gold next year when the price is $1500 an ounce. You will now owe a $500 capital gain.
It is the same for bitcoin. When you mine, you "find bitcoins" that you would owe ordinary income on, and you would need to record a basis for. When you sell those bitcoins, you will owe capital gains tax based on the appreciated value of the coins you mined.
His response isn't different than mine, he just isn't referencing mining but is talking about buying and holding bitcoin for a period of time. You won't owe capital gains on the appreciation until you sell it.
Does that clear it up a bit?
Hi Everybody,
When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?
Thanks for your help.
In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?
Thanks for your help.
I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.
You have to pay tax on the mining of bitcoin. You can deduct things like cost of machines (depreciation) and electricity, but tax is still owed. Consult an accountant (like me) for further insight.
Really? but how to calculate the value of the bitcoin? at the time of mined? Say I got each day some bitcoins because of mining, I have to record the price that day for my tax purpose? It will be a lot of work.
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
There are stances completely different to yours, for example:
To the best of my understanding. When I keep BTC in BTC any income I make in BTC is not taxable as to Federal Income Tax. When I cash out BTC, and have made a profit, that is taxable as income. State taxation laws will vary. Can you be more specific about the situation you are seeking clarification on please?
Best:
George D. Greenberg, Esq.
www.attorneybitcoin.com
Best:
George D. Greenberg, Esq.
www.attorneybitcoin.com
I would keep in mind that, despite what Mr. Trump thinks, you are not a smart guy when you avoid paying your taxes. You are a deadbeat who thinks someone else should pay your bills.
I have an issue with New Egg which I believe has negative tax consequences. I have already complained to no avail.
I am looking to purchase more Sapphire RX470 8gb cards after evaluating one. Currently this card from NE is listed at $214 with a free $60 game.
The problem is the way they invoice. For the one card I purchased, they supplied two invoices.
The first invoice takes the card price of $214 and then an obscurely written 2nd line on the invoice subtracts "a credit" for $60. So the first invoice shows that the net card cost is $154.
The second invoice is for the $60 video game and the total line has $60. Adding the two together and voila, we get the $214 catalog price total.
My complaint to them was that they are potentially hurting any business customer because their way of invoicing shows cost basis of the card as $154 not $214. While the chance of an audit is tiny, your invoice has reduced the cost basis of this card by $60 and you have given me a game invoice for $60. Especially for an order of say five, what is the audit defense against expensing 5 identical $60 computer games.?
I am looking to purchase more Sapphire RX470 8gb cards after evaluating one. Currently this card from NE is listed at $214 with a free $60 game.
The problem is the way they invoice. For the one card I purchased, they supplied two invoices.
The first invoice takes the card price of $214 and then an obscurely written 2nd line on the invoice subtracts "a credit" for $60. So the first invoice shows that the net card cost is $154.
The second invoice is for the $60 video game and the total line has $60. Adding the two together and voila, we get the $214 catalog price total.
My complaint to them was that they are potentially hurting any business customer because their way of invoicing shows cost basis of the card as $154 not $214. While the chance of an audit is tiny, your invoice has reduced the cost basis of this card by $60 and you have given me a game invoice for $60. Especially for an order of say five, what is the audit defense against expensing 5 identical $60 computer games.?
Just want to make sure I understand, but you are actually paying $214, but then you get a game worth $60? So when you make the purchase, $214 is coming out of your bank account?
Correct. $214 on a cc. You are given 2 separate invoices with completely different invoice numbers. The one for $154, is the RX470. The other one for is $60, a "Hitman" PC game. The price on their website for this card is $214. No mention of this weird allocation of cost. The game is some sort of incentive in lieu of a discount. I asked about getting a further discount and no game. No can do.
I wouldn't worry about it. Just keep a list of your "fixed assets" or if you are choosing to just expense it keep some record of the payment and make sure everything is documented well. As long as the full $214 hit your credit card, I wouldn't be worried about the IRS not believing you actually paid that amount for the card.
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