taxes question | Bitcointalksearch.org

Maesters1-

sr. member

Activity: 252

Merit: 250

Quote from: geoffreyqp on July 02, 2016, 09:24:16 AM

how is the profit calculated? this is probably a tough question to answer.

let me give an example. i buy 100k worth of bitcoins. i sell for 102k. but during that time the value of bitcoins drops or increases 1%. how are the taxes calculated for that?

i think you have to calculate the taxes with the price changes. either up or down. because you have to pay on the biocin you have. its withholding tax. if you are pay on buy then the price you but the bitocin you have to pay on that.

odolvlobo

legendary

Activity: 4298

Merit: 3209

Quote from: geoffreyqp on July 02, 2016, 09:24:16 AM

how is the profit calculated? this is probably a tough question to answer.
let me give an example. i buy 100k worth of bitcoins. i sell for 102k. but during that time the value of bitcoins drops or increases 1%. how are the taxes calculated for that?

Your cost is 100k. Your sale is 102k. Your profit is 2k. You are taxed on 2k. It doesn't matter what happens in between.

Quickseller

copper member

Activity: 2870

Merit: 2298

I am not any kind of tax professional and I am not representing you. To get proper advice you should hire someone who is acting as a fiduciary who can give you advice based on your individual situation as everyone's situation is unique.

I understand that, for tax purposes, the government/IRS cares about the price you paid for your bitcoin and the price you sold your bitcoin for. For example, if you purchased 1 bitcoin for $650 and subsequently sold that same bitcoin (the same tax lot) for $700 then you would have income in the amount of $50 that would generally be treated as a capital gain.

Another example would be if you purchased 1 bitcoin for $650 and subsequently sold 0.93 BTC (all of which is part of the same tax lot) for $651, then your cost basis for the 0.93 BTC would be $604.50, the sale price would be $650, leaving you with income of $45.50 in the form of capital gains and the 0.07 BTC that you have not sold would have a tax basis of $45.50 for when you decide to sell it.

geoffreyqp

hero member

Activity: 712

Merit: 500

how is the profit calculated? this is probably a tough question to answer.

let me give an example. i buy 100k worth of bitcoins. i sell for 102k. but during that time the value of bitcoins drops or increases 1%. how are the taxes calculated for that?

odolvlobo

legendary

Activity: 4298

Merit: 3209

Quote from: geoffreyqp on June 28, 2016, 02:29:46 PM

what tax implications am i looking at? is it even worth it? thoughts?

You make a profit, you pay taxes on the profit.

poptok1

hero member

Activity: 1638

Merit: 756

Bobby Fischer was right

https://en.bitcoin.it/wiki/Tax_compliance
https://bitcoin.tax/ calculator
https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance irs guide

http://www.accountingweb.com/tax/irs/how-to-pay-your-bitcoin-taxes good blog post

A lot depends of jurisdiction, so check closely.

geoffreyqp

hero member

Activity: 712

Merit: 500

thanks for reply.

it is hitting my american bank.

and i'm not necessarily trying to avoid paying taxes. just want to know how much i'd be paying for this? 100k to bank is very likely to get looked at

and if it's worth it for me to do this.

mrhelpful

legendary

Activity: 1456

Merit: 1002

how is the money being sent and received is all what matters.

But assuming this is based on cash deposits and hits a checkings account - anything that hits your bank account "needs to be reported" to your local tax man.

Unless you run a cash based operation where you setup a po box etc thats a different story.

I`m not a legal advisor or a cpa so I would get in touch with one the ones that work towards more for startups / traders.

geoffreyqp

hero member

Activity: 712

Merit: 500

so i have an option to buy like 100k worth of btc at around bitstamp price maybe 1% less.

and i can also sell it at 2-3% vig.

so that's at the very least 2% profit.

also the door might be open for me to rinse and repeat this a couple times over.

what tax implications am i looking at? is it even worth it? thoughts?

Topic: taxes question (Read 498 times)