Topic: Taxes on bitcoin? (Read 515 times)

Thank you for this information. Even though I'm not a novice user, I'm really useful. Sometimes it is really worth remembering some of the things that may later turn out to be important.

You don't have to reject someone else point, just spill out your mind, there is really no tax charges in some countries and there is in some too.

Thanks for this info, I live in the U.S, so this is good to know.

This is terrible advice. If you transact with exchanges, you often need to provide ID and proof of residence. Even if you don't, various information is collected about you: personal information, cookies, IP address, BTC deposit/withdrawal history, etc. Companies like Chainalysis then track blockchain activity, flagging any and all activity that could be used to identity you later.

The IRS (US tax agency) is already using Chainalysis software to identify people that are using BTC to evade taxes. Bitcoin privacy is pretty bad, especially when users don't selectively use UTXOs or Tor browser, etc. I'm not sure about the rest of the world, but Bitcoin is taxable in one or more ways in the US. The IRS published a FAQ about digital currencies earlier this year to help investors figure out how to report their taxes.

Do yourself a favor and move to Denmark. There is currently no tax on gains from holding cryptocurrencies like BTC etc. However, those rules might change at any point in time which will most likely be when the government discovers just how much money they are missing out on in taxing these currencies. In Denmark there is tax on basically everything. Butter, power, gasoline, nuts and chocolate, sparkling water and list is basically endless.

Don't put out false information. Here in the US you most certainly will have to pay taxes on your profits. The only question is how these profits are calculated.

The answer is no, because as bitcoin is decentralized and  no one control it.

If you just store your bitcoin on a wallet you won't be taxed now or anytime soon. However when using your bitcoin to say convert some or all to fiat money you could be taxed or be required by law to file the profits made from doing this. This varies per country. For example in New York you require a license to buy or store bitcoin. Such a license does not come cheap.

I think in the future yes, they will have control because banks are also working together with crypto's...and more and more people will use it. So they will tax us.

Yes, I agree, bitcoin will not be taxed. because, until this time, many countries are yet to acknowledge bitcoin.

I think it will not be possible. because if bitcoin is taxed, then what I'm wondering is on what basis?

Bitcoin is not yet recognised as a legal currency in most countries, so you don't have to pay taxes if you receive bitcoins. However, whenever there is fiat involved, say you sold your btc to usd, bitcoin being an asset, then you need to pay taxes on the profits made.
Also, it varies country by country so you may need to consult your countries laws for 100% surety.

Some pertinent information regarding the US Tax Code
https://www.irs.gov/pub/irs-drop/n-14-21.pdf


Q-7: What type of gain or loss does a taxpayer realize on the sale or exchange of
virtual currency?
A-7: The character of the gain or loss generally depends on whether the virtual
currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes
capital gain or loss on the sale or exchange of virtual currency that is a capital asset in
the hands of the taxpayer. For example, stocks, bonds, and other investment property
are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the
sale or exchange of virtual currency that is not a capital asset in the hands of the
taxpayer. Inventory and other property held mainly for sale to customers in a trade or
business are examples of property that is not a capital asset. See Publication 544 for
more information about capital assets and the character of gain or loss.

Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer
resources to validate Bitcoin transactions and maintain the public Bitcoin
transaction ledger) realize gross income upon receipt of the virtual currency
resulting from those activities?
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value
of the virtual currency as of the date of receipt is includible in gross income. See
Publication 525, Taxable and Nontaxable Income, for more information on taxable
income.

The taxes you have to pay for your Bitcoin or other cryptocurrency differs from Country to country.
The norm in EU is that there are no Taxes on Bitcoin yet, but countries like "Norway" re-visited the Bitcoin tax statement and made their own bitcoin tax.
So in Norway you will have to tax your gains on Bitcoin like any other currency. (20-30% of your gains)
Every year you will have to deliver a yearly report of how much you value you own to the state and how much you have traded.
If they ask for it you will also have to deliver a transaction history that matches this value.


In other countries like Netherlands you have no Tax on bitcoin, yet. I believe we will all pay taxes on Crypto in the future. The point of crypto is not to dodge tax, but to get faster, cheaper, private and a economy free of government influence.


How a country is going to tax cryptocurrency when you no longer will have to turn it into fiat is still uncertain, but my grandfather told me that there are 2 certanties in life. Death and Tax. (Hope this helps)

we all dont know about this, because as of now there are no taxes related in bitcoin in my country,its only a transaction fee that they took, but for sure sooner or later governments will implement taxes in our precious bitcoin transactions, mostly for those country that has own bitcoin wallet exchanges.

bitcoins might be treated as securities in future so you can pay capital gains tax on securities. May be in future..

You'd need to pay capital gains tax when withdrawing the bitcoin into fiat, depending upon your country's rules and regulations.

I don't think it will be easy for government to trace bitcoins transactions to its owners to force them to pay taxes.

Yes. As time goes on, I see governments finding ways to gather information on how to impose tax on bitcoin. But the easier way is when you convert your bitcoin to fiat currency, there is no way your spending or income will not be noticed hence taxed.

This I think completely depends in the country you're in. If the country you're in pretty much doesn't give a crap about bitcoin and cryptocurrencies in general then good for you. There are some countries though that I think requires their people to report capital gains with their cryptocurrencies (correct me if I'm wrong); especially when you're using services like Coinbase whereas your purchases and sells are easily trackable.