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Topic: Taxes on Bitcoin - page 8. (Read 10930 times)

legendary
Activity: 1582
Merit: 1064
August 15, 2016, 05:54:59 PM
#14
Here's a question: US resident comes into some tokens, sends them to Poloniex, exchanges the tokens for btc and then transfers the btc out. Lets say the assets are worth US$500k. So that is US$500k of tokens in, and US$500k of btc out. Is Poloniex reporting these transactions just like a bank, i.e. any transaction over US$10k gets reported? Or any case of potential structuring gets reported? There is no apparent tax gain given nothing has been monetized, i.e. fiat-ized. No fiat has been involved. Yet Poloniex requires all this KYC docs in order to make large transactions like this. Curious ...

The point of reporting is not just to track tax evasion. It is also to check money laundering.
Plus if there is illegal money (say drug earnings) involved, the government may sniff it out from reports like these.
legendary
Activity: 2800
Merit: 1012
Get Paid Crypto To Walk or Drive
August 15, 2016, 10:22:36 AM
#13
Here's a question: US resident comes into some tokens, sends them to Poloniex, exchanges the tokens for btc and then transfers the btc out. Lets say the assets are worth US$500k. So that is US$500k of tokens in, and US$500k of btc out. Is Poloniex reporting these transactions just like a bank, i.e. any transaction over US$10k gets reported? Or any case of potential structuring gets reported? There is no apparent tax gain given nothing has been monetized, i.e. fiat-ized. No fiat has been involved. Yet Poloniex requires all this KYC docs in order to make large transactions like this. Curious ...

In this scenario you would not owe any taxes since you are exchanging an asset to an asset. The United states has classified bitcoin as property, so it would be like exchangin 50 dollars in silver for 50 dollars in bitcoin. Your basis is still 50 dollars in gold now.

Now you would owe tax if your basis is zero on the tokens, or anything less than 500k.  I don't believe you can defer this gain in this situation, although I really only do corporation taxes, so I may be mistaken. But to my knowledge you would have to pay taxes on the gain of the original tokens, then your basis in the btc would be 500k.

Gains on the tokens would be capital gains? I've got lots of short-term capital loss carry-forwards .... basically stock losses. I could offset the two?

It would either be short term or long term depending on how long you held the assets, but yes.  And yes, you could use the losses to offset the gains.
full member
Activity: 227
Merit: 100
August 15, 2016, 01:16:10 AM
#12
Here's a question: US resident comes into some tokens, sends them to Poloniex, exchanges the tokens for btc and then transfers the btc out. Lets say the assets are worth US$500k. So that is US$500k of tokens in, and US$500k of btc out. Is Poloniex reporting these transactions just like a bank, i.e. any transaction over US$10k gets reported? Or any case of potential structuring gets reported? There is no apparent tax gain given nothing has been monetized, i.e. fiat-ized. No fiat has been involved. Yet Poloniex requires all this KYC docs in order to make large transactions like this. Curious ...

In this scenario you would not owe any taxes since you are exchanging an asset to an asset. The United states has classified bitcoin as property, so it would be like exchangin 50 dollars in silver for 50 dollars in bitcoin. Your basis is still 50 dollars in gold now.

Now you would owe tax if your basis is zero on the tokens, or anything less than 500k.  I don't believe you can defer this gain in this situation, although I really only do corporation taxes, so I may be mistaken. But to my knowledge you would have to pay taxes on the gain of the original tokens, then your basis in the btc would be 500k.

Gains on the tokens would be capital gains? I've got lots of short-term capital loss carry-forwards .... basically stock losses. I could offset the two?
legendary
Activity: 2800
Merit: 1012
Get Paid Crypto To Walk or Drive
August 14, 2016, 07:44:40 PM
#11
Here's a question: US resident comes into some tokens, sends them to Poloniex, exchanges the tokens for btc and then transfers the btc out. Lets say the assets are worth US$500k. So that is US$500k of tokens in, and US$500k of btc out. Is Poloniex reporting these transactions just like a bank, i.e. any transaction over US$10k gets reported? Or any case of potential structuring gets reported? There is no apparent tax gain given nothing has been monetized, i.e. fiat-ized. No fiat has been involved. Yet Poloniex requires all this KYC docs in order to make large transactions like this. Curious ...

In this scenario you would not owe any taxes since you are exchanging an asset to an asset. The United states has classified bitcoin as property, so it would be like exchangin 50 dollars in silver for 50 dollars in bitcoin. Your basis is still 50 dollars in gold now.

Now you would owe tax if your basis is zero on the tokens, or anything less than 500k.  I don't believe you can defer this gain in this situation, although I really only do corporation taxes, so I may be mistaken. But to my knowledge you would have to pay taxes on the gain of the original tokens, then your basis in the btc would be 500k.
full member
Activity: 227
Merit: 100
August 14, 2016, 07:39:56 PM
#10
Here's a question: US resident comes into some tokens, sends them to Poloniex, exchanges the tokens for btc and then transfers the btc out. Lets say the assets are worth US$500k. So that is US$500k of tokens in, and US$500k of btc out. Is Poloniex reporting these transactions just like a bank, i.e. any transaction over US$10k gets reported? Or any case of potential structuring gets reported? There is no apparent tax gain given nothing has been monetized, i.e. fiat-ized. No fiat has been involved. Yet Poloniex requires all this KYC docs in order to make large transactions like this. Curious ...
legendary
Activity: 1582
Merit: 1064
August 13, 2016, 07:02:39 AM
#9
Thanks everyone for your input! It's greatly appreciated. I've often wondered what people do when they win Bitcoins from a foreign online casino, for example, and whether they owed taxes to the country where those Bitcoins originated, in this case the foreign-owned casino.

Online casinos can be set up anywhere.... and therefore it makes sense for the operators to choose a tax-friendly jurisdiction.
So you can invariably expect that there will be no taxes owed in the country where the casino has been set up.
member
Activity: 112
Merit: 10
August 12, 2016, 05:53:13 AM
#8
You have to pay tax in your country, and sometimes a fee from the vendor. Some countries do not charge very high fees or no Smiley Grin
legendary
Activity: 2590
Merit: 3015
Welt Am Draht
August 10, 2016, 05:53:02 PM
#7
Thanks everyone for your input! It's greatly appreciated. I've often wondered what people do when they win Bitcoins from a foreign online casino, for example, and whether they owed taxes to the country where those Bitcoins originated, in this case the foreign-owned casino.

That depends on where you live. In the UK there are no taxes on gambling winnings at all.

If you live somewhere where you are taxed, you'd pay taxes to the country you live in. It's your windfall therefore your nice problem to have.
sr. member
Activity: 434
Merit: 250
August 10, 2016, 05:04:09 PM
#6
Even if someone won a lot of bitcoin in one of these casinos, I doubt they would actually declare the winnings and pay taxes on it.
Most people that win money playing poker online for example never pay taxes.
Add the anonymous nature of Bitcoin and I would be surprised if there was one person admitting their winnings.
newbie
Activity: 2
Merit: 0
August 09, 2016, 10:47:19 PM
#5
Thanks everyone for your input! It's greatly appreciated. I've often wondered what people do when they win Bitcoins from a foreign online casino, for example, and whether they owed taxes to the country where those Bitcoins originated, in this case the foreign-owned casino.
legendary
Activity: 1582
Merit: 1064
August 09, 2016, 08:46:36 PM
#4
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.

You have to pay taxes to your country. Sometimes, the sender may have to deduct taxes (Tax deducted at source) before sending you the bitcoins. If you are lucky and your country has a double taxation avoidance agreement with the sender's country, you can claim credit for the taxes deducted by the sender.
legendary
Activity: 1806
Merit: 1024
August 09, 2016, 02:24:48 PM
#3
This will depend on the country of origin of the sender and the nature of the transaction. If you are just doing private transactions I doubt that there is anything to tax (however, governments are getting more creative every day). If the Bitcoin transaction is part of a business deal I would assume that the same tax rules apply as would for a transaction with fiat money.

Countries have different taxation laws. But in general I would assume that the location (IP) from where the Bitcoin are sent is not relevant. Relevant is the home location of your business partner. This means if a Japanese sends Bitcoin out of a wallet that is controlled by an European exchange, the deal would fall under the same tax rules as if the Bitcoin were send out of Japan.

ya.ya.yo!
sr. member
Activity: 434
Merit: 250
August 09, 2016, 11:12:59 AM
#2
This is actually an interesting question.
I doubt that 99.99% of people dealing with Bitcoin are paying any kind of tax.
Unless you are selling a lot of coins and earning a living from it, I wouldn't worry about any taxes.
(I mean serious trading where you are earning tens of thousands of dollars a year.)
newbie
Activity: 2
Merit: 0
August 08, 2016, 10:31:03 PM
#1
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.



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