Topic: Will people be selling after the 1st of the year for tax benefits? (Read 4352 times)

Oh I understand that the order book is a living dynamic organism all in its own! Especially with the advent of computerized trading.  I'm not saying it would "crash" with a large order, I just think there would be enough "bots" jumping in on the buy side to have decent support.

much of that order book is dynamic...  have you forgotten how crashes work with bots?

Most of the exchanges have enough support and buys to now handle a couple thousand coin sell.  If someone with a super large, 10k batch or more wants to dump at one time, that will drive down the price.  But even with that sort of sell, you can see the current order book, it would only be temporary.

Looks like someone dumped a few thousand coins on Gox. The beauty of the market is such that someone dumping coins like that still can't bring it down significantly. The market takes a more broad case of selling to bring it down very far.

Says who?!  Who knows how the IRS will eventually classify coins, but lets assume its a commodity like oil, gold, wheat, corn, etc.  You put money on an oil exchange, Forex or something.  You buy some oil futures.  You sell some oil contracts in 2013.  You keep the money on the exchange.  Guess what?  You still owe taxes on that sell assuming you made some money.  Cashing out has NOTHING to do with a taxable event.

This post is kind of irrelevant, because it's all about when someone CASHES out.

Sell Sell Sell

Well in about 60 minutes it will be midnight on the East Coast of the US. We'll see how things go then.

thank you

Generally taxable events are created from selling something, whether real estate, stocks, gold, etc.  Because you "found" bitcoins, basically a cost basis of zero, and/or bought bitcoins, it should not be considered a taxable event.

There is a thread about this in https://bitcointalksearch.org/topic/how-will-the-irs-tax-bitcoin-379425

quick question

if i bought and mined bitcoins but NEVER sold any,

do i need to declare anything during my taxes in 2014? do i need to let irs know that i hold bitcoins ? or can i be hush about it since i never made a recognized gain?

See this link for some info:

http://www.bitcointax.info/


perfect - thank you!

and a happy and prosperous 2014 to all!

Well after midnight ("Asia time") and the price is higher, not by much, but slight upward trend.

I think eventually there will be accountants who become very familiar with the tax codes for trading and selling bitcoin.  And by familiar, I mean there will become some sort of precedent that most will follow.  It happened with online poker.  Most CPA's didn't know how to calculate the gains or losses.  Then someone (a Mr Fox or someone) created a poker specific tax site and he became the go to guy for many professional poker players.

Thanks for the link. I was going to post something similar in a little while to get another angle on the situation.

Well, it's midnight in Beijing right now. I don't know if the Chinese have the same tax write-offs that we do that would cause them to potentially sell in the New Year. It will be interesting to see.

See this link for some info:

http://www.bitcointax.info/

I'm right behind you brother. If I get any sort of pushback by the IRS I will move out as well. I have friends in Thailand who say I can get a flat in a tower on the ocean for $1000/month. I'll just move into my friend's building and hang out with Thai supermodels.

What you say about talking to an accountant of course makes sense and I would suggest anyone who is going to spend any of their bitcoin loot to do the same. I plan to use mine for a down payment on a house. I want to diversify my investments from just bitcoin to bitcoin and real estate in case my bitcoin holdings drop because of some unforeseen news.

Yes, I will have to declare some of my gains in taxes but I hope to offset those with mortgage interest payments.

Most of us have already thought about this. In fact, back in 2011 when I first bought into bitcoin when the prices were going up I had that very thought. But getting a foreign bank account is difficult and I believe many countries have agreements with the US to report any balances if a person is suspected of illegal activity.

This happened in Switzerland recently. The Swiss have always had the utmost security when it came to banking matters until the US strong-armed the Swiss into releasing bank records on US citizens. Many Swiss banks now refuse to accept accounts from Americans.

Perhaps one could set up an account in the Cayman Islands. In fact, I do believe I will look into doing just that. Thanks for the inspiration.

What's stopping someone from opening up a bank acct in another country, transferring BTC to that country's local exchange and withdrawing to the bank? Or using an ATM anywhere around the world, then storing the fiat in a bank. Would coinbase report to the IRS how many bitcoins you bought and when? Please respond

My accountant has advised me that I should report these as "Other Income" for my Mining/Arbitrage/Trading LLC I set up in 2012, which basically means Bitcoins are taxed at the highest rate possible (akin to an increased salary). I might even have to pay more in Social Security tax, we still don't know.

Until we get clarity from the gov't on this, I'm going with my accountant and taking as legal of a route as possible. If cryptocurrencies do get taxed at lower rates, then I can always go back and file a claim for what they owe me. I do agree that these should be taxed at capital gains rates, but capital gains have very specific designations in the tax code (or so I'm told) and because the IRS is slacking off, we presently think that Bitcoins fall under Other Income at the present time. I don't think more familiar CPAs are going to be universal in their assessment of this, so take what I have to say here as you may. I'm just going the extra precautionary route though I'm definitely complaining every step of the way. Also, this $50k I made was a sale of only a small portion of my holdings, so this is kind of a "let's figure out what happens" sort of thing.

Also, because of the sharp contrast in my previous to my present bank account standings, I'm sure to get audited, so I imagine I'll have a lot to say to the IRS about this as well. This is partially the reason for why I was thinking of doing a blog, so I can complain about everything that happens and how unfairly I'm sure to get targeted. Maybe they'll surprise me and it'll be a cheery process or there won't be an audit at all. I find both unlikely.

TLDR; I'm going to be a shining beacon of the opposite that I want to be regarding taxes on cryptocurrencies. If the feds screw around with me, I'm leaving this god-forsaken bananapetrodollar republic and making sure they don't make another dime off of me and no one will be able to say I didn't try to work with them on this.