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Topic: White House Petition to AMEND IRS NOTICE 2014-2 Taxing virtual currency/Bitcoin (Read 4409 times)
April 02, 2014, 03:17:42 PM
It's only 685 at the moment.
Sign up guys/gals! I did, despite of not being American.
There are 303,094 of us on this forum. We need just 1/3 of it to cross the threshold.
Sign up guys/gals! I did, despite of not being American.
There are 303,094 of us on this forum. We need just 1/3 of it to cross the threshold.
April 02, 2014, 03:08:23 PM
We have some rights, the fifth amendment is one of them.
The legal burden of proving ownership would be on the I.R.S. I would not be legally obligated to say anything.
The fact: they will not be able to enforce these tax rules.
https://www.youtube.com/watch?v=b3_lVSrPB6wThe legal burden of proving ownership would be on the I.R.S. I would not be legally obligated to say anything.
The fact: they will not be able to enforce these tax rules.
Smart person detected.
Unless you are foolish enough to give your name(and SSN), The IRS will not know of any bitcoin gains.
Do you know where the fifth amendment comes from?
Inalienable human rights, The right to silence is among those rights regardless of context.
Declare your bitcoins, You infringe upon your own right to silence.
Make no mention of your name/(social security number) and you protect your right to own bitcoins anonymously.
Bitcoin is all about anonymity, proof of ownership will be a key factor for the I.R.S to engage in any audit related to bitcoin.
How are they gonna say that "For federal tax purposes, virtual currency is treated as property."
then say that their taxable.
Not once in my life have I traded a item(property) for a item(property) and paid tax on it, the idea is just silly.
Lastly, You're ignored, Your sarcasm is misplaced.
I do hope you pay taxes for your bitcoins, I won't be.
April 01, 2014, 10:26:02 PM
You will fall into " receiving funds from outside of U.S." and its not pretty when I.R.S ask you.
We have some rights, the fifth amendment is one of them.
The legal burden of proving ownership would be on the I.R.S. I would not be legally obligated to say anything.
The fact: they will not be able to enforce these tax rules.
Smart person detected.
April 01, 2014, 06:01:00 PM
So far the petition to the White House about the IRS ruling against Bitcoin hasn't gotten much traction. If you believe in the value of digital currencies like Bitcoin, you need to sign this petition on the White House website. If we achieve 100,000 signatures, the President will have to respond.
To vote, go to https://petitions.whitehouse.gov/petition/amend-irs-notice-2014-2taxing-virtual-currencybitcoin-property-stifles-new-technologycreates/z7WtKZGY
To vote, go to https://petitions.whitehouse.gov/petition/amend-irs-notice-2014-2taxing-virtual-currencybitcoin-property-stifles-new-technologycreates/z7WtKZGY
March 30, 2014, 08:08:03 PM
A major issue about signing this petition is that a whitehouse.gov account is required to do so.
How many bitcoin users are willing to create on to sign it? I'd venture to guess not many due to the fact that it would be an easy way for the U.S. government to tract people involved with bitcoin.
When I worked in the financial field in my mid 20's the manager at the wirehouse setup "4pm yoga" on Wednesdays. I was too busy and usually had the problematic brokers assigned to my desk. The well-pedigreed sales assistants worked for the fat cats, never had a lot of work to do and got paid a lot better for doing less work. I always thought the yoga thing would have been a great way to figure out who didn't have enough work on their desk, but in the end they really were just doing yoga despite my suspicion of the whole thing being a clever trap...
March 30, 2014, 08:03:52 PM
A major issue about signing this petition is that a whitehouse.gov account is required to do so.
How many bitcoin users are willing to create on to sign it? I'd venture to guess not many due to the fact that it would be an easy way for the U.S. government to tract people involved with bitcoin.
Exactly.
March 30, 2014, 05:37:17 PM
So if I owned 100,000 gold coins in a video game, must I pay capital gains when the game company raises the price?
It would be taxed at higher regular income rates, if there were a market for your 100,000 gold coins -- that is, if you can sell them.*or spend them.
Still not quite the same thing. Imagine that your prepaid phone minutes increased in price for your favorite burner phone. Sure, you might make a profit by selling unredeemed phone cards because the price was raised by the phone company, and technically you would be liable to pay tax on that profit.
Quote
The thing that is a burden for me is I buy mining equipment with BTC that I mine. So even though I'm recycling BTC revenues back into my business I am expected to record the pool payout as income and then the equipment purchase as a realized gain or loss event, but I'm never actually exchanging it for cash. I guess if an ASIC chip had other purposes I'd feel a little better about the system, but it does have the feeling like they are trying to discourage the holding and spending of the mined coins by adding complexity/busy-work to it. From a bookkeeping perspective it's a pain in the ass, and there will probably be significant added costs passing along the spreadsheets to a CPA for eval and filing.
With the capital gains ruling, essentially, you are conducting two activities, mining and speculating. You are a disadvantage if you take losses from speculating -- and the error was assuming that your speculation losses could be written off as business expenses. Hopefully the market will stabilize and bitcoin will start behaving with slow and steady growth so this won't be so much of an issue. You may also be able to use your speculation losses to offset your future gains, ask your CPA about that.
March 30, 2014, 05:03:55 PM
A major issue about signing this petition is that a whitehouse.gov account is required to do so.
How many bitcoin users are willing to create on to sign it? I'd venture to guess not many due to the fact that it would be an easy way for the U.S. government to tract people involved with bitcoin.
March 30, 2014, 04:52:07 PM
So if I owned 100,000 gold coins in a video game, must I pay capital gains when the game company raises the price?
It would be taxed at higher regular income rates, if there were a market for your 100,000 gold coins -- that is, if you can sell them.
*or spend them. The thing that is a burden for me is I buy mining equipment with BTC that I mine. So even though I'm recycling BTC revenues back into my business I am expected to record the pool payout as income and then the equipment purchase as a realized gain or loss event, but I'm never actually exchanging it for cash. I guess if an ASIC chip had other purposes I'd feel a little better about the system, but it does have the feeling like they are trying to discourage the holding and spending of the mined coins by adding complexity/busy-work to it. From a bookkeeping perspective it's a pain in the ass, and there will probably be significant added costs passing along the spreadsheets to a CPA for eval and filing.
March 30, 2014, 04:43:42 PM
So if I owned 100,000 gold coins in a video game, must I pay capital gains when the game company raises the price?
It would be taxed at higher regular income rates, if there were a market for your 100,000 gold coins -- that is, if you can sell them.
March 30, 2014, 04:40:33 PM
So if I owned 100,000 gold coins in a video game, must I pay capital gains when the game company raises the price?
March 30, 2014, 01:36:02 AM
Excellent find.
Thanks for the info.
It really is a moving target right now as to what it the right or wrong way to go.
Once added benefit would be huge farms may shut down or move for a while spreading the wealth to the smaller miners who do not get much as they cannot compete with the large farms.
Thanks for the info.
It really is a moving target right now as to what it the right or wrong way to go.
Once added benefit would be huge farms may shut down or move for a while spreading the wealth to the smaller miners who do not get much as they cannot compete with the large farms.
Interesting article here: http://www.coindesk.com/irs-bitcoin-tax-guidelines-mean/
Excerpts:
"Dave Carlson, a US entrepreneur who runs a mining operation that earned almost $8m a month in revenue when bitcoin was at its peak, says that this could spell trouble for miners. 'The implications of the new IRS tax guidance will be a major factor for those US miners who didn’t anticipate it and are already on the edge of profit. A capital gains tax on all coins mined could drive mining revenue below cost of power for many, forcing them to shut down,' he says. ”Pool operators will have to issue 1099s to all their US contributors, which will drive pool fees higher."
Above is somewhat a different angle on what my concern is. I'm mostly concerned with the projected losses for 2014, having no clue if BTC is headed higher or lower my profit or loss is entirely related to the market price of BTC, and showing a big loss has risks that I'd rather avoid.
"At least one miner has a strategy to get around the taxing of bitcoin when mined, though. Yana Kesler, a certified public accountant from Philadelphia, purchased a $7,200 mining rig last year, and had it hosted in Europe. 'When you mine yourself you are the producer. When you ask someone else to mine for you, that’s your investment,' Kesler says. She calculates the basis value of her coins as zero, but says that she does declare capital gains when she sells the coins."
This is similar to what my CPA had mentioned, I think... But as I said before we aren't done figuring it all out, but I did mention the pool I mine through is in Europe, which might have something to do with this approach. The rules establish a playing field, but there might be creative ways to handle some finer points related to expenses and revenue recognition without going out of bounds. The IRS guidance makes a lot of sense for solo-mining operations, but for a guy mining out of his apartment with a pool it seems a bit like a broken set of rules.
Excerpts:
"Dave Carlson, a US entrepreneur who runs a mining operation that earned almost $8m a month in revenue when bitcoin was at its peak, says that this could spell trouble for miners. 'The implications of the new IRS tax guidance will be a major factor for those US miners who didn’t anticipate it and are already on the edge of profit. A capital gains tax on all coins mined could drive mining revenue below cost of power for many, forcing them to shut down,' he says. ”Pool operators will have to issue 1099s to all their US contributors, which will drive pool fees higher."
Above is somewhat a different angle on what my concern is. I'm mostly concerned with the projected losses for 2014, having no clue if BTC is headed higher or lower my profit or loss is entirely related to the market price of BTC, and showing a big loss has risks that I'd rather avoid.
"At least one miner has a strategy to get around the taxing of bitcoin when mined, though. Yana Kesler, a certified public accountant from Philadelphia, purchased a $7,200 mining rig last year, and had it hosted in Europe. 'When you mine yourself you are the producer. When you ask someone else to mine for you, that’s your investment,' Kesler says. She calculates the basis value of her coins as zero, but says that she does declare capital gains when she sells the coins."
This is similar to what my CPA had mentioned, I think... But as I said before we aren't done figuring it all out, but I did mention the pool I mine through is in Europe, which might have something to do with this approach. The rules establish a playing field, but there might be creative ways to handle some finer points related to expenses and revenue recognition without going out of bounds. The IRS guidance makes a lot of sense for solo-mining operations, but for a guy mining out of his apartment with a pool it seems a bit like a broken set of rules.
March 30, 2014, 12:36:42 AM
Interesting article here: http://www.coindesk.com/irs-bitcoin-tax-guidelines-mean/
Excerpts:
"Dave Carlson, a US entrepreneur who runs a mining operation that earned almost $8m a month in revenue when bitcoin was at its peak, says that this could spell trouble for miners. 'The implications of the new IRS tax guidance will be a major factor for those US miners who didn’t anticipate it and are already on the edge of profit. A capital gains tax on all coins mined could drive mining revenue below cost of power for many, forcing them to shut down,' he says. ”Pool operators will have to issue 1099s to all their US contributors, which will drive pool fees higher."
Above is somewhat a different angle on what my concern is. I'm mostly concerned with the projected losses for 2014, having no clue if BTC is headed higher or lower my profit or loss is entirely related to the market price of BTC, and showing a big loss has risks that I'd rather avoid.
"At least one miner has a strategy to get around the taxing of bitcoin when mined, though. Yana Kesler, a certified public accountant from Philadelphia, purchased a $7,200 mining rig last year, and had it hosted in Europe. 'When you mine yourself you are the producer. When you ask someone else to mine for you, that’s your investment,' Kesler says. She calculates the basis value of her coins as zero, but says that she does declare capital gains when she sells the coins."
This is similar to what my CPA had mentioned, I think... But as I said before we aren't done figuring it all out, but I did mention the pool I mine through is in Europe, which might have something to do with this approach. The rules establish a playing field, but there might be creative ways to handle some finer points related to expenses and revenue recognition without going out of bounds. The IRS guidance makes a lot of sense for solo-mining operations, but for a guy mining out of his apartment with a pool it seems a bit like a broken set of rules.
Excerpts:
"Dave Carlson, a US entrepreneur who runs a mining operation that earned almost $8m a month in revenue when bitcoin was at its peak, says that this could spell trouble for miners. 'The implications of the new IRS tax guidance will be a major factor for those US miners who didn’t anticipate it and are already on the edge of profit. A capital gains tax on all coins mined could drive mining revenue below cost of power for many, forcing them to shut down,' he says. ”Pool operators will have to issue 1099s to all their US contributors, which will drive pool fees higher."
Above is somewhat a different angle on what my concern is. I'm mostly concerned with the projected losses for 2014, having no clue if BTC is headed higher or lower my profit or loss is entirely related to the market price of BTC, and showing a big loss has risks that I'd rather avoid.
"At least one miner has a strategy to get around the taxing of bitcoin when mined, though. Yana Kesler, a certified public accountant from Philadelphia, purchased a $7,200 mining rig last year, and had it hosted in Europe. 'When you mine yourself you are the producer. When you ask someone else to mine for you, that’s your investment,' Kesler says. She calculates the basis value of her coins as zero, but says that she does declare capital gains when she sells the coins."
This is similar to what my CPA had mentioned, I think... But as I said before we aren't done figuring it all out, but I did mention the pool I mine through is in Europe, which might have something to do with this approach. The rules establish a playing field, but there might be creative ways to handle some finer points related to expenses and revenue recognition without going out of bounds. The IRS guidance makes a lot of sense for solo-mining operations, but for a guy mining out of his apartment with a pool it seems a bit like a broken set of rules.
March 29, 2014, 11:40:31 PM
It is a good way to bring attention to the issue though. Once it has then real progress can be made as the community as a whole can get behind it.
I guess this is worth trying.
Not sure what will come of it. Petitions are not the way to affect change.
Not sure what will come of it. Petitions are not the way to affect change.
March 29, 2014, 11:39:15 PM
You are correct on that point for sure. It will drag Bitcoin a bit more into the mainstream. I just hope it can be made a less nightmarish mess of paperwork than it is set to be now.
It is good for Bitcoin, but maybe will be more troublesome in operation.
Everyone should sign the petition and spread the links. The IRS's recent ruling on how it will tax Bitcoin and crypto currencies are going to directly effect us all but especially negative is the requirement for miners.
http://www.cryptocoinsnews.com/2014/03/29/white-house-petition-amend-irs-notice-2014-2-taxing-virtual-currencybitcoin/
http://www.cryptocoinsnews.com/2014/03/29/white-house-petition-amend-irs-notice-2014-2-taxing-virtual-currencybitcoin/
It is good for Bitcoin, but maybe will be more troublesome in operation.
March 29, 2014, 11:31:57 PM
I guess this is worth trying.
Not sure what will come of it. Petitions are not the way to affect change.
Not sure what will come of it. Petitions are not the way to affect change.
My prediction is more people will file it "wrong" or not at all than those that do it correctly, many will just be honest mistakes. I think the IRS rushed it big time and they are likely to revise. The system in place is very last minute and doesn't play well with the business/hobby rules. If the equipment needed to mine had a longer useful life it might be different, but one-time equipment expense will almost always lead to a loss if BTC moves sideways or goes down... Just don't think the guidance is sustainable. I believe my CPA said my record keeping and aggressive sales of inefficient equipment make it a good candidate for being run as a business, but we need to be careful about reporting losses too many years or the IRS may force me into categorizing as a hobby, which crushes the ability to report expenses against the activity's income.
March 29, 2014, 11:13:31 PM
I guess this is worth trying.
Not sure what will come of it. Petitions are not the way to affect change.
Not sure what will come of it. Petitions are not the way to affect change.
March 29, 2014, 10:42:56 PM
i laugh at the panicking people that have not fully understood the ruling or the method of tracking/auditing. nor spoke to a accountant about it, but they simply start a petition to change something they dont understand.
Well my problem is that my accountant actually said a lot of very reassuring things, except they appear to be directly contradicted by the IRS publication even though he's read it. I don't really feel like getting audited.I met with a CPA today and he seemed to advise we only record income on spent BTC. For example, I buy mining gear with BTC, so the act of exchanging BTC for dollars or a good that are "real" is when we will record as income. This means the non-exchanged BTC only has a cost basis at where it was mined. Some of his advice seemed to contradict the IRS Q&A publication, but when I pressed on those he made the point that if I'm holding and not exchanging that it doesn't need to be reported as there's no taxable event. What he was advising sounded a lot like what I was hoping for, or what I thought would make more sense, but I do know the official guidance seems to state things differently. We both agreed it seems silly to report income on a virtual thing that is highly speculative. I mean, if you get $90k in mining payouts but at the year end some big news makes BTC worthless or illegal then you would owe taxes on that income but never saw and dollars, services, or physical goods from purchases because it was never exchanged and ended up worthless. He did say their guidance seems unclear enough that we come up with a method and stick with it until/unless they clarify. Lastly, a bit of confusion how to report some of the expenses, but I need to send him my spreadsheets, more to come...
Your CPA is an idiot and so you are if you use him.
IRS ruling clearly indicates there are 2 possible ways of acquiring btc:
1) Mining: a taxable event that will be in your gross income based on fair market value of the mined coins. There will be another taxable event when you sell those coins, thus fall into capital gain.
2) Buying: there willl be a taxable event when you sell btc.
Eat shit buddy, why exactly do you think you can call people "idiots"? How much different you must sound face to face, serious keyboard bully syndrome you've got on this thread. I've been usefully adding to these topics for several days, and I promised I would share back what my CPA advises. He's got 20+ years and this was at a glance his first impression. Seriously, in all seriousness go fuck yourself.
Edit: I'm looking through your post history and it seems you have developed a habit of calling people idiots on here. I can't find one post of yours that doesn't have an insulting tone. Hope you understand what happens next...
Let me explain like you're a five years old.
It does not matter what your CPA's OPINION is, or what he and you think makes sense.
IRS ruling cant be any clearer. 20 yrs or 1 yr experience does not mean jack if your CPA doesnt understand the wording. In fact, if he has 20yrs experience and suggest something contradicts the ruling then my statement of him being an idiot is even more concrete.
As for calling u an idiot, it depends on your action. If you choose to follow an idiot's advise, you're not smarter than him are you?
I'm an hard ass on anyone who misleads ppl by posting opinions on public forums as facts.
You are irrelevant and sad, shame on you. I posted what my CPA said, that doesn't mean he's right or wrong, it's just me passing on the info. It's ironic we clash because you are pretending to do what I've been doing, except you are trashy about it. You have a whole history of posting like a jerk, small guy syndrome or what? What's your bitch? Seriously not feeding the troll anymore.
March 29, 2014, 10:07:05 PM
Everyone should sign the petition and spread the links. The IRS's recent ruling on how it will tax Bitcoin and crypto currencies are going to directly effect us all but especially negative is the requirement for miners.
http://www.cryptocoinsnews.com/2014/03/29/white-house-petition-amend-irs-notice-2014-2-taxing-virtual-currencybitcoin/
http://www.cryptocoinsnews.com/2014/03/29/white-house-petition-amend-irs-notice-2014-2-taxing-virtual-currencybitcoin/
It is good for Bitcoin, but maybe will be more troublesome in operation.
March 29, 2014, 10:05:05 PM
i laugh at the panicking people that have not fully understood the ruling or the method of tracking/auditing. nor spoke to a accountant about it, but they simply start a petition to change something they dont understand.
Well my problem is that my accountant actually said a lot of very reassuring things, except they appear to be directly contradicted by the IRS publication even though he's read it. I don't really feel like getting audited.I met with a CPA today and he seemed to advise we only record income on spent BTC. For example, I buy mining gear with BTC, so the act of exchanging BTC for dollars or a good that are "real" is when we will record as income. This means the non-exchanged BTC only has a cost basis at where it was mined. Some of his advice seemed to contradict the IRS Q&A publication, but when I pressed on those he made the point that if I'm holding and not exchanging that it doesn't need to be reported as there's no taxable event. What he was advising sounded a lot like what I was hoping for, or what I thought would make more sense, but I do know the official guidance seems to state things differently. We both agreed it seems silly to report income on a virtual thing that is highly speculative. I mean, if you get $90k in mining payouts but at the year end some big news makes BTC worthless or illegal then you would owe taxes on that income but never saw and dollars, services, or physical goods from purchases because it was never exchanged and ended up worthless. He did say their guidance seems unclear enough that we come up with a method and stick with it until/unless they clarify. Lastly, a bit of confusion how to report some of the expenses, but I need to send him my spreadsheets, more to come...
Your CPA is an idiot and so you are if you use him.
IRS ruling clearly indicates there are 2 possible ways of acquiring btc:
1) Mining: a taxable event that will be in your gross income based on fair market value of the mined coins. There will be another taxable event when you sell those coins, thus fall into capital gain.
2) Buying: there willl be a taxable event when you sell btc.
Eat shit buddy, why exactly do you think you can call people "idiots"? How much different you must sound face to face, serious keyboard bully syndrome you've got on this thread. I've been usefully adding to these topics for several days, and I promised I would share back what my CPA advises. He's got 20+ years and this was at a glance his first impression. Seriously, in all seriousness go fuck yourself.
Edit: I'm looking through your post history and it seems you have developed a habit of calling people idiots on here. I can't find one post of yours that doesn't have an insulting tone. Hope you understand what happens next...
Let me explain like you're a five years old.
It does not matter what your CPA's OPINION is, or what he and you think makes sense.
IRS ruling cant be any clearer. 20 yrs or 1 yr experience does not mean jack if your CPA doesnt understand the wording. In fact, if he has 20yrs experience and suggest something contradicts the ruling then my statement of him being an idiot is even more concrete.
As for calling u an idiot, it depends on your action. If you choose to follow an idiot's advise, you're not smarter than him are you?
I'm an hard ass on anyone who misleads ppl by posting opinions on public forums as facts.
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