Who is buying Bitcoin? Why do they buy it?

acamus

newbie

Activity: 28

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Quote from: Gameover on May 26, 2011, 11:02:26 AM

Quote from: freecoin on May 26, 2011, 10:41:46 AM

The reasons to buy/use Bitcoins are many, but the opportunity to trade OUTSIDE the Federal Reserve system, and perhaps your country's central bank too (quite possibly hastening its demise), and its associated tax is probably one of the greatest reasons. What I'm saying is, once you dig into it, you will discover the US Federal Income Tax is an excise on banking within the Federal Reserve System. From a legal standpoint, bitcoins are not "income" under the Revenue Acts of the United States. Unless of course you consent to consider them income; in this day of heavy conditioning (brainwashing), that's always an option. I asked a tax attorney about bitcoin and he said they were "includible" in gross income. I then said "oh, I can include them if I choose to." And he just laughed at that. My interpretation is... gotcha.

http://savingtosuitorsclub.net/showthread.php?145-Exactly-what-does-the-IRS-agent-think
http://losthorizons.com/CtCforFree.pdf

Of course, have 100 bitcoins in your account is meaningless, but the moment you sell those 100 bitcoins for $800 you have to report that. Having bitcoins is like having 100 jpgs or 100 bookmarks, you don't report jpgs on your taxes even though they may have value, but if you sell them then you report that, same thing.

The great thing is you only need to report it once the dollars become "real". No need to report mtGox dollars or Dwolla dollars. Only once it hits your bank account. I would just seriously hope dwolla doesn't get shut down.

darthjee

newbie

Activity: 3

Merit: 0

Quote from: Gameover on May 26, 2011, 11:02:26 AM

Quote from: freecoin on May 26, 2011, 10:41:46 AM

The reasons to buy/use Bitcoins are many, but the opportunity to trade OUTSIDE the Federal Reserve system, and perhaps your country's central bank too (quite possibly hastening its demise), and its associated tax is probably one of the greatest reasons. What I'm saying is, once you dig into it, you will discover the US Federal Income Tax is an excise on banking within the Federal Reserve System. From a legal standpoint, bitcoins are not "income" under the Revenue Acts of the United States. Unless of course you consent to consider them income; in this day of heavy conditioning (brainwashing), that's always an option. I asked a tax attorney about bitcoin and he said they were "includible" in gross income. I then said "oh, I can include them if I choose to." And he just laughed at that. My interpretation is... gotcha.

http://savingtosuitorsclub.net/showthread.php?145-Exactly-what-does-the-IRS-agent-think
http://losthorizons.com/CtCforFree.pdf

Of course, have 100 bitcoins in your account is meaningless, but the moment you sell those 100 bitcoins for $800 you have to report that. Having bitcoins is like having 100 jpgs or 100 bookmarks, you don't report jpgs on your taxes even though they may have value, but if you sell them then you report that, same thing.

well, you can buy bit coins, to startup the system, bring the coins to your location ... once you have that, and enough local business and people are accepting them, you can start circulating it and avoiding taxes

Gameover

member

Activity: 92

Merit: 10

NEURAL.CLUB - FIRST SOCIAL ARTIFICIAL INTELLIGENCE

Quote from: freecoin on May 26, 2011, 11:10:08 AM

Quote from: Gameover on May 26, 2011, 11:02:26 AM

.. but the moment you sell those 100 bitcoins for $800 you have to report that. Having bitcoins is like having 100 jpgs or 100 bookmarks, you don't report jpgs on your taxes even though they may have value, but if you sell them then you report that, same thing.

I respectfully disagree. There is no requirement. We have been greatly deceived. Unfortunately I don't have much in the way of proof. I've personally operated outside the FR system and not paid income tax in years. I conclude that the IRS agrees with me since I have no legal issues.

I have heard that as well but would rather pay 30% than having a chance of going to federal prison. Either you don't make very much (little risk of being audited) or are delusional in thinking that any argument you make will hold up in court and not land you with heavy fines much beyond what you owe or prison time. Besides our tax rate is much lower than almost every other industrialized nation, even though most of it is squandered Sad

Alex Beckenham

full member

Activity: 154

Merit: 100

Quote from: w128 on May 26, 2011, 10:40:08 AM

There simply aren't enough bitcoin using businesses

That you know of.

eleuthria

legendary

Activity: 1750

Merit: 1007

Quote from: freecoin on May 26, 2011, 11:10:08 AM

Quote from: Gameover on May 26, 2011, 11:02:26 AM

.. but the moment you sell those 100 bitcoins for $800 you have to report that. Having bitcoins is like having 100 jpgs or 100 bookmarks, you don't report jpgs on your taxes even though they may have value, but if you sell them then you report that, same thing.

I respectfully disagree. There is no requirement. We have been greatly deceived. Unfortunately I don't have much in the way of proof. I've personally operated outside the FR system and not paid income tax in years. I conclude that the IRS agrees with me since I have no legal issues.

Good luck with that if they ever catch on. Just because you haven't been audited yet means nothing. When you do get audited, enjoy the interest and penalties. There are thousands of people out they operating under the: "I haven't been taken to tax court yet, so I must not be doing anything wrong" theory. Ignorance won't get you off the hook. Make sure you hire a CPA experienced in audits, they'll save you a lot of money when the time comes.

freecoin

newbie

Activity: 30

Merit: 0

Quote from: Gameover on May 26, 2011, 11:02:26 AM

.. but the moment you sell those 100 bitcoins for $800 you have to report that. Having bitcoins is like having 100 jpgs or 100 bookmarks, you don't report jpgs on your taxes even though they may have value, but if you sell them then you report that, same thing.

I respectfully disagree. There is no requirement. We have been greatly deceived. Unfortunately I don't have much in the way of proof. I've personally operated outside the FR system and not paid income tax in years. I conclude that the IRS agrees with me since I have no legal issues.

Jaime Frontero

full member

Activity: 126

Merit: 100

i note that - for the purpose of paying taxes (always a good idea) - precisely which Bitcoin one declares may have some bearing on the matter: especially as concerns miners.

do you declare that the 10 BTC you just exchanged for USD are the 10 you mined when you were CPUmining and getting five blocks a day? or do you declare the 10 you mined when you were getting one BTC a day at an electricity cost of $6.50 a day?

yet another good reason to continue mining past the theoretical point of unprofitability. think of it as protecting your investment...

Gameover

member

Activity: 92

Merit: 10

NEURAL.CLUB - FIRST SOCIAL ARTIFICIAL INTELLIGENCE

Quote from: freecoin on May 26, 2011, 10:41:46 AM

The reasons to buy/use Bitcoins are many, but the opportunity to trade OUTSIDE the Federal Reserve system, and perhaps your country's central bank too (quite possibly hastening its demise), and its associated tax is probably one of the greatest reasons. What I'm saying is, once you dig into it, you will discover the US Federal Income Tax is an excise on banking within the Federal Reserve System. From a legal standpoint, bitcoins are not "income" under the Revenue Acts of the United States. Unless of course you consent to consider them income; in this day of heavy conditioning (brainwashing), that's always an option. I asked a tax attorney about bitcoin and he said they were "includible" in gross income. I then said "oh, I can include them if I choose to." And he just laughed at that. My interpretation is... gotcha.

http://savingtosuitorsclub.net/showthread.php?145-Exactly-what-does-the-IRS-agent-think
http://losthorizons.com/CtCforFree.pdf

Of course, have 100 bitcoins in your account is meaningless, but the moment you sell those 100 bitcoins for $800 you have to report that. Having bitcoins is like having 100 jpgs or 100 bookmarks, you don't report jpgs on your taxes even though they may have value, but if you sell them then you report that, same thing.

Gameover

member

Activity: 92

Merit: 10

NEURAL.CLUB - FIRST SOCIAL ARTIFICIAL INTELLIGENCE

Quote from: w128 on May 26, 2011, 10:40:08 AM

Speculation.

The overwhelming majority of BTC bought for speculative purposes. There simply aren't enough bitcoin using businesses or exchanges for any significant percentage of that volume to come from anything else.

I agree, all of the other reasons given are ideological bullcrap.

Quote from: Grinder on May 26, 2011, 08:18:00 AM

They buy it for the same reason people bought tulip bulbs - they expect others to value them even higher in the future.

LOL great analogy, at least when people were stuck with 100,000 tulips they could enjoy their beauty Cheesy

When people are stuck holding 1,000 bitcoins there won't be much to enjoy Sad

freecoin

newbie

Activity: 30

Merit: 0

The reasons to buy/use Bitcoins are many, but the opportunity to trade OUTSIDE the Federal Reserve system, and perhaps your country's central bank too (quite possibly hastening its demise), and its associated tax is probably one of the greatest reasons. What I'm saying is, once you dig into it, you will discover the US Federal Income Tax is an excise on banking within the Federal Reserve System. From a legal standpoint, bitcoins are not "income" under the Revenue Acts of the United States. Unless of course you consent to consider them income; in this day of heavy conditioning (brainwashing), that's always an option. I asked a tax attorney about bitcoin and he said they were "includible" in gross income. I then said "oh, I can include them if I choose to." And he just laughed at that. My interpretation is... gotcha.

http://savingtosuitorsclub.net/showthread.php?145-Exactly-what-does-the-IRS-agent-think
http://losthorizons.com/CtCforFree.pdf

w128

newbie

Activity: 14

Merit: 0

Speculation.

The overwhelming majority of BTC bought for speculative purposes. There simply aren't enough bitcoin using businesses or exchanges for any significant percentage of that volume to come from anything else.

Dobrodav

sr. member

Activity: 350

Merit: 250

To transfer money, freely and anonymous, from person to person, country to country.

And rising price is secondary reason. (but it guarantee, that users will prefer BTC to move their money.)

allinvain

legendary

Activity: 3080

Merit: 1080

Pff...taxes shmaxes...if bitcoin achieves its destiny one day you won't have to pay taxes. I kid I kid, don't interpret that to mean don't pay you taxes cause you don't want to F with the IRS or any other tax man.

Chucksta

full member

Activity: 168

Merit: 100

Quote from: Doktyr on May 26, 2011, 09:45:14 AM

Quote from: acamus on May 26, 2011, 09:21:29 AM

I just wonder what happens when all these coins go up in value and the IRS sees someone made 50% ROI without showing it on taxes Cheesy

Why wouldn't you report it on the "Other Income" section of the tax forms? Making money from selling bitcoin and not reporting it to the IRS are two different things.

A lot of people tend forget about declaring income to the tax people. One good thing is that you can list your costs which is then deducted from your taxable income. In our case that could be the mining rigs and electricity usage.

Meni Rosenfeld

donator

Activity: 2058

Merit: 1054

Quote from: PRCman on May 26, 2011, 08:15:22 AM

I don't know why they are buying Bitcoin, What for? 99.99% services need Bitcoin to pay have other services for replacement which need USD to pay.

1. Some people need the 0.01% services.
2. Some people buy as an investment because they expect the value to rise (due to becoming more ubiquitous and practical).
3. Some people want to be part of this movement out of ideology.

Quote from: PRCman on May 26, 2011, 08:15:22 AM

And why services provider accepting Bitcoin instead of USD?

1. They don't have to pay fees for receiving payment.
2. They don't risk being chargebacked.
3. They get extra sales to people who prefer to pay with Bitcoin.
4. They want to be part of this movement out of ideology.

eleuthria

legendary

Activity: 1750

Merit: 1007

Quote from: acamus on May 26, 2011, 09:21:29 AM

I just wonder what happens when all these coins go up in value and the IRS sees someone made 50% ROI without showing it on taxes Cheesy

Well, if the IRS audited you, you're in trouble for not reporting the income. They don't care what Bitcoins are, they care about the deposits that hit your bank account for actual $.

For Mining (Schedule C): You can expense your electricity usage (not all, only the amount you can prove was used for BTC), depreciate your machines (% based if its also a personal use machine), and then report the full amount you sold the BTC for.

For trading (Schedule D): Records of the amounts paid and when for BTC, and records of the amounts you sold them for and when. Short/long-term gains. Use FIFO or LIFO consistently for allocating your sales against the different purchases, since the IRS will not have somebody with the knowledge to understand how the coins could be potentially traced back to their actual purchase.

Doktyr

newbie

Activity: 15

Merit: 0

Quote from: acamus on May 26, 2011, 09:21:29 AM

I just wonder what happens when all these coins go up in value and the IRS sees someone made 50% ROI without showing it on taxes Cheesy

Why wouldn't you report it on the "Other Income" section of the tax forms? Making money from selling bitcoin and not reporting it to the IRS are two different things.

darthjee

newbie

Activity: 3

Merit: 0

Quote from: PRCman on May 26, 2011, 09:30:48 AM

Quote from: darthjee on May 26, 2011, 09:18:59 AM

Well, i see some reasons:

1) people expect it to achieve greater value in the future
2) you might want to make it circulate so that it makes bitCoin an important coin, making it last forever
3) you might be from some other country and might want to by something from accross the sea ... instead of buyin dollars, you can buy bit coins (that's what i am gonna do)
~~~~~~~~~~~~~~~~~~In that case when I sell them Bitcoin, I got their money, I will have to transfer to USD my self?

4) this might be your business, to buy bitcoins to sell them to other people who need/want them (for any reason)

Well, not exactly ... if i find someone in my country who deal with foreign bitcoin seller, he will buy, so he will transfer the USD, then i will buy from him using my countrie's money, then i can buy from any store across the sea without ever buying dollars.

If bit coin really catches on on every country, that store can buy something accross seas again from my country, therefore, there will be, again, bitcoins here so that i can purchase (or trade for goods and services)

SomeoneWeird

hero member

Activity: 700

Merit: 500

Quote from: Chucksta on May 26, 2011, 09:23:59 AM

Buying and selling Bitcoin is definitely the best way to make money here, although still a gamble. I wish I had put my mining investment into that from the very start. I've got one more week to go before the hardware is paid for (price per BTC being $7), and that counts the 70% difficulty increase forecast for tonight.

Re taxes: if you sell the BTC and withdraw the money made, you have to declare that as income. Well, you do in the UK.

BTC = $8 now on MTGox

PRCman

newbie

Activity: 42

Merit: 0

Quote from: Chucksta on May 26, 2011, 09:23:59 AM

Buying and selling Bitcoin is definitely the best way to make money here, although still a gamble. I wish I had put my mining investment into that from the very start. I've got one more week to go before the hardware is paid for (price per BTC being $7), and that counts the 70% difficulty increase forecast for tonight.

Re taxes: if you sell the BTC and withdraw the money made, you have to declare that as income. Well, you do in the UK.

Such as I know, HK company doesn't have to pay tax to oversea business, you can regist a HK company

Topic: Who is buying Bitcoin? Why do they buy it? (Read 7164 times)