The most logical and what most companies already do in relation to Bitcoin. You have to consider the price of bitcoin on the day of the sale, and if you want to go further, make a notarized sale paper (but in general they don't ask it since the report is based on trust and not on proofs provided)
You just need to be able to provide the sale document, and if asked later, a proof of the transaction between coinbase and your bank
Topic: Using an Exchange Like Coinbase for Pass-Through BTC to Fiat Transactions? (Read 164 times)
October 10, 2018, 05:13:55 PM
October 10, 2018, 05:09:45 PM
However, as you have mentioned that you don't have to pay sales tax if you sell your used vehicle. Why are you even worrying?
Thank you for your reply. I'm not worried at all. I believe that I had it correct then in that the only costs to me whether through taxes or fees would be the small amount of capital gains if there was a rise in BTC while the money was clearing into my bank and the small fee from Coinbase. Very concise answer.
Is there a better way to convert BTC to fiat besides an exchange? I used the theoretical example of a used automobile but am curious about the best way to transfer wealth from BTC wallet to my bank account if I do transactions in goods and services and am paid in BTC.
October 10, 2018, 04:59:12 PM
The process of converting the bitcoin you received as a sale proceed depends on your settlement provider. Each settlement providers have different commission structures for coversion. Coinbase is not particularly a crypto settlement service provider, it has more usage apart from settling your funds!
However, the overall conversion process is very similar to the one you mentioned. You get bitcoin in your wallet and convert it into fiat using the exchange service provider that deposits directly to your bank account.
Every settlement provider will have a timestamp facility available to determine the fiat amount from the conversion minus their fees. If thw price goes up in between the payment receipt and conversion time, a little more tax burden will come to you based on the final amount received in your bank account.
However, as you have mentioned that you don't have to pay sales tax if you sell your used vehicle. Why are you even worrying?
However, the overall conversion process is very similar to the one you mentioned. You get bitcoin in your wallet and convert it into fiat using the exchange service provider that deposits directly to your bank account.
Every settlement provider will have a timestamp facility available to determine the fiat amount from the conversion minus their fees. If thw price goes up in between the payment receipt and conversion time, a little more tax burden will come to you based on the final amount received in your bank account.
However, as you have mentioned that you don't have to pay sales tax if you sell your used vehicle. Why are you even worrying?
October 10, 2018, 01:37:57 PM
If I sell my used car for fiat currency in my state there are no sales taxes.
I assume that if I sell my used car and the buyer pays with BTC which I convert to fiat via Coinbase for further deposit into my bank account, my only tax liability would be the slight difference in cost basis from when I deposited the BTC and when I withdrew it (providing that BTC went up of course).
Is this how you would convert BTC into fiat for sales of goods?
Thanks.
I assume that if I sell my used car and the buyer pays with BTC which I convert to fiat via Coinbase for further deposit into my bank account, my only tax liability would be the slight difference in cost basis from when I deposited the BTC and when I withdrew it (providing that BTC went up of course).
Is this how you would convert BTC into fiat for sales of goods?
Thanks.
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