When does Bitcoin become your property? - page 2.

devt

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Quote from: Beliathon on March 29, 2014, 08:27:10 PM

Quote from: pungopete468 on March 29, 2014, 07:33:49 PM

"If you don't own the private keys to the wallet containing Bitcoins, you don't own Bitcoins."

Put your BTC in brain wallet. Tell IRS "I don't have the private keys to that address".

Impossible for them to legally prove you are the owner of those BTC.

You pay no taxes.

You pay no taxes as long as you don't use it to buy something, which is the same as not having any BTC.

which2say

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Quote from: hjdt4fd1 on March 30, 2014, 12:53:23 AM

Quote from: bountygiver on March 29, 2014, 08:18:11 PM

You can also avoid converting bitcoin to USD through exchanges that needs your passport (more risk) to avoid all the taxes as they'll have no way to associate that bitcoin address with you.

You're right, there is no way the IRS will bitcoin address with your link.

In this regard the IRS taxes may encounter many problems, they can be resolved?

waldox

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when the irs can prove that you hold the private keys to a block of bitcoins

hjdt4fd1

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Quote from: bountygiver on March 29, 2014, 08:18:11 PM

You can also avoid converting bitcoin to USD through exchanges that needs your passport (more risk) to avoid all the taxes as they'll have no way to associate that bitcoin address with you.

You're right, there is no way the IRS will bitcoin address with your link.

nitehawk

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Worldcore - Banking for the Future

they still have to prove how much you actually mined..

pungopete468

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http://www.irs.gov/pub/irs-drop/n-14-21.pdf

So I was basing my entire point on capital gains... I was incorrect.

Mining is taxed as income. It makes no difference.

Beliathon

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https://youtu.be/PZm8TTLR2NU

Quote from: pungopete468 on March 29, 2014, 07:33:49 PM

"If you don't own the private keys to the wallet containing Bitcoins, you don't own Bitcoins."

Put your BTC in brain wallet. Tell IRS "I don't have the private keys to that address".

Impossible for them to legally prove you are the owner of those BTC.

You pay no taxes.

bountygiver

member

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Merit: 10

You can also avoid converting bitcoin to USD through exchanges that needs your passport (more risk) to avoid all the taxes as they'll have no way to associate that bitcoin address with you.

greenlion

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The IRS won't take too kindly to playing games with words like this.

pungopete468

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I've been contemplating the capital gains tax on Bitcoin.

The Bitcoin protocol is a trustless system; so Bitcoins exist in the blockchain as a stake of irrefutable ownership. It's been said, "If you don't own the private keys to the wallet containing Bitcoins, you don't own Bitcoins."

For capital gains tax, ownership is everything. When a coin is created it is certainly owned; but not necessarily by you...

The coins can be transferred from a pool to an exchange, sold for USD, then repurchased. The USD could be considered regular income as the Bitcoins weren't owned by you, as if you were a worker mining gold for a gold mining business getting paid in USD. The coins you purchase with USD won't be considered a capital gain until you sell them.

EDIT:

Bitcoin mining is not taxed on capital gains. The above approach is meaningless as Bitcoin mining is taxed as ordinary income immediately. The tax implications are more favorable for those who mine and hold.

Topic: When does Bitcoin become your property? - page 2. (Read 1637 times)