Will people be selling after the 1st of the year for tax benefits? - page 2.

wachtwoord

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Quote from: notme on December 28, 2013, 11:10:10 PM

Quote from: ChanceCoats123 on December 28, 2013, 03:51:20 AM

Quote from: notme on December 28, 2013, 02:11:39 AM

If anything, I'll cash out a bit before the first since at the end of the year I can calculate how much I can cash out and still keep my income low enough to have 0% on long term capital gains. Ah, the joys of being back in school and living on a graduate teaching assistant's mesely pay. I finish my masters in May though, so I don't know what taxes will be like for 2014.

If you're going to go early and anticipate the sell off, don't you think other people might anticipate your anticipation and sell earlier than that? And what about the people who anticipate the anticipation of the anticipation and sell off even before that sell off??? We might as well all sell off now to avoid those issues. Roll Eyes

Where the fuck did I say anything about trying to front run some stupid theory about people cashing out simply because it is a new year? I want the profits in 2013 taxes because I can be certain of their impact.

Not everyone's reading skills are sufficiently up to par Wink

notme

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Quote from: ChanceCoats123 on December 28, 2013, 03:51:20 AM

Quote from: notme on December 28, 2013, 02:11:39 AM

If anything, I'll cash out a bit before the first since at the end of the year I can calculate how much I can cash out and still keep my income low enough to have 0% on long term capital gains. Ah, the joys of being back in school and living on a graduate teaching assistant's mesely pay. I finish my masters in May though, so I don't know what taxes will be like for 2014.

If you're going to go early and anticipate the sell off, don't you think other people might anticipate your anticipation and sell earlier than that? And what about the people who anticipate the anticipation of the anticipation and sell off even before that sell off??? We might as well all sell off now to avoid those issues. Roll Eyes

Where the fuck did I say anything about trying to front run some stupid theory about people cashing out simply because it is a new year? I want the profits in 2013 taxes because I can be certain of their impact.

HELP.org

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Quote from: virtualfaqs on December 27, 2013, 04:39:13 PM

Quote from: Soopaman on December 27, 2013, 04:37:02 PM

Quote from: Joe200 on December 27, 2013, 04:34:30 PM

Quote from: btcprice on December 27, 2013, 02:16:52 PM

I'm guessing a lot of people are waiting until after the 1st of the year to sell their coins in order to cash out and realize a profit. Cashing out after the 1st of the year allows them one whole year to find tax havens such as mortgage interest and Roth IRAs.

My understanding of tax law in the US is that, for forex (and bitcoin), you pay taxes on a marked to market basis. You calculate dollars out (or dollar value of bitcoins) minus dollars in, and pay taxes on that. It does not matter whether you "cash out" or not -- the tax is the same.

If you've been hodling since the beginning of the year and haven't done any day trading, you don't have any taxes since you haven't realized profits. I think the idea here is that some of these long term hodlers may be waiting for the beginning of the year to realize their profits so the income isn't factored into their 2013 taxes when they file them in April.

That's what I was thinking. Also another strategy is if you sold during the year and rebought. If the price drops significantly, you can resell and rebuy to offset capital losses, but with slippage that might not work at all.

No, when you rebuy there is no capital gain/loss until you sell again. If you sold up high and rebought you still need to come up with the cash to pay your taxes on the gain you realized when you sold.

wachtwoord

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Quote from: eldentyrell on December 28, 2013, 04:42:47 PM

Quote from: freethink2013 on December 27, 2013, 07:35:29 PM

I presume we can deduct silk road loses?

There is a line-item for income (or loss) from illegal activities. I shit you not.

And I continue to be amazed.

eldentyrell

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Quote from: Joe200 on December 27, 2013, 04:34:30 PM

Quote from: btcprice on December 27, 2013, 02:16:52 PM

I'm guessing a lot of people are waiting until after the 1st of the year to sell their coins in order to cash out and realize a profit. Cashing out after the 1st of the year allows them one whole year to find tax havens such as mortgage interest and Roth IRAs.

My understanding of tax law in the US is that, for forex (and bitcoin), you pay taxes on a marked to market basis. You calculate dollars out (or dollar value of bitcoins) minus dollars in, and pay taxes on that. It does not matter whether you "cash out" or not -- the tax is the same.

Well, sorta.

The rules for gold and collectibles are mostly about the rate. They don't want you using the 15-20% rate.

You recognize (report) the gain in value every year, but you don't owe the tax on that gain until you realize the gain (i.e. sell).

Quote from: TERA on December 27, 2013, 07:32:23 PM

In fact I lost money from BitFloor - can I deduct that?

Very likely. You should probably have a tax professional do it.

Quote from: freethink2013 on December 27, 2013, 07:35:29 PM

I presume we can deduct silk road loses?

There is a line-item for income (or loss) from illegal activities. I shit you not.

Quote from: bitcon on December 28, 2013, 12:05:31 AM

if you have to pay taxes on capital gains shouldnt the IRS have to pay me for capital losses if i lose my investment?

They do, but they don't pay you in dollars; they pay you in tax credits you can carry forward into the future.

proudhon

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Will somebody PM when it's time to sell a bunch of bitcoins next year. I don't want to miss out.

skivrmt

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Quote from: Dalmar on December 28, 2013, 08:32:41 AM

Quote from: wachtwoord on December 28, 2013, 08:27:00 AM

There were plenty of people who had millions of Dollars in Bitcoin even at those prices. I can understand this is hard to gather if you just came around though

There was some ''smart money'' in it, but nowhere near the amount of corporate/semi-corporate money that is currently in BTC. So, you can't really say what is going to happen.

I think this is exactly correct. We cant compare last year to this year. There was barely any press about it, no trusts being set up, not much if any mainstream acceptance yet, and of course no corporate money with big time backers. I dont think we'll see any changes from 2013 to 2014 simply because of taxes.

wachtwoord

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Quote from: Dalmar on December 28, 2013, 08:35:52 AM

Quote from: wachtwoord on December 28, 2013, 08:33:57 AM

I was around on the forums. There was also plenty of 'dumb' money in Cheesy

I was talking about those who dumped +50k USD on bitcoin back then, not your average lucky nerd/stoner.

I'm talking about those that did it the other way around Wink

Dalmar

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Quote from: wachtwoord on December 28, 2013, 08:33:57 AM

I was around on the forums. There was also plenty of 'dumb' money in Cheesy

I was talking about those who dumped +50k USD on bitcoin back then, not your average lucky nerd/stoner.

wachtwoord

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Quote from: Dalmar on December 28, 2013, 08:32:41 AM

Quote from: wachtwoord on December 28, 2013, 08:27:00 AM

There were plenty of people who had millions of Dollars in Bitcoin even at those prices. I can understand this is hard to gather if you just came around though

There was some ''smart money'' in it, but nowhere near the amount of corporate/semi-corporate money that is currently in BTC. So, you can't really say what is going to happen.

I was around on the forums. There was also plenty of 'dumb' money in Cheesy

Dalmar

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Life is short, practice empathy in your life

Quote from: wachtwoord on December 28, 2013, 08:27:00 AM

There were plenty of people who had millions of Dollars in Bitcoin even at those prices. I can understand this is hard to gather if you just came around though

There was some ''smart money'' in it, but nowhere near the amount of corporate/semi-corporate money that is currently in BTC. So, you can't really say what is going to happen.

wachtwoord

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Quote from: Dalmar on December 28, 2013, 07:20:33 AM

Quote from: ?? on ??

In the previous years the price went up sharply in January. So why didn't this happen (at a large scale) in the previous years and will happen now? I don't see the reason.

Bitcoin was a silly stoner/hacker's coin back then.

There were plenty of people who had millions of Dollars in Bitcoin even at those prices. I can understand this is hard to gather if you just came around though

skivrmt

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Quote from: Romyen on December 28, 2013, 02:40:18 AM

Several posts in this thread assume that trading bitcoins on an exchange is a taxable event for U.S. persons. I believe that is true only if at some point they are coverted to fiat or used to purchase a physical commodity or service. Suppose you bought bitcoins on an exchange using a fiat currency. Your basis is whatever you paid for the bitcoins. If you trade those bitcoins for another virtual commodity such as litecoins without ever converting to a fiat currency or anything physical, then I believe it is not yet taxable, and your basis remains at whatever you paid for the bitcoins. That is my interpretation of the U.S. GAO report on virtual currencies: http://www.gao.gov/products/GAO-13-516 . I am not a tax accountant. If I am wrong about any of this, please correct me.

That's an interesting link. I think it is describing more of using virtual currency to buy or trade for something "real", like a product or service which may or may taxable. Yeah, Uncle Sam is so helpful sometimes! I don't think it specifically addresses trading a virtual currency for a profit, or loss.

But again, just because sometimes doesn't get converted to fiat, doesn't mean its taxable. I'm not saying trading coins is or isn't, I'm not an accountant, but I'd be careful if one day you ever get audited!!

Dalmar

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Quote from: ?? on ??

In the previous years the price went up sharply in January. So why didn't this happen (at a large scale) in the previous years and will happen now? I don't see the reason.

Bitcoin was a silly stoner/hacker's coin back then.

ChanceCoats123

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Quote from: notme on December 28, 2013, 02:11:39 AM

If anything, I'll cash out a bit before the first since at the end of the year I can calculate how much I can cash out and still keep my income low enough to have 0% on long term capital gains. Ah, the joys of being back in school and living on a graduate teaching assistant's mesely pay. I finish my masters in May though, so I don't know what taxes will be like for 2014.

If you're going to go early and anticipate the sell off, don't you think other people might anticipate your anticipation and sell earlier than that? And what about the people who anticipate the anticipation of the anticipation and sell off even before that sell off??? We might as well all sell off now to avoid those issues. Roll Eyes

Romyen

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Several posts in this thread assume that trading bitcoins on an exchange is a taxable event for U.S. persons. I believe that is true only if at some point they are coverted to fiat or used to purchase a physical commodity or service. Suppose you bought bitcoins on an exchange using a fiat currency. Your basis is whatever you paid for the bitcoins. If you trade those bitcoins for another virtual commodity such as litecoins without ever converting to a fiat currency or anything physical, then I believe it is not yet taxable, and your basis remains at whatever you paid for the bitcoins. That is my interpretation of the U.S. GAO report on virtual currencies: http://www.gao.gov/products/GAO-13-516 . I am not a tax accountant. If I am wrong about any of this, please correct me.

notme

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If anything, I'll cash out a bit before the first since at the end of the year I can calculate how much I can cash out and still keep my income low enough to have 0% on long term capital gains. Ah, the joys of being back in school and living on a graduate teaching assistant's mesely pay. I finish my masters in May though, so I don't know what taxes will be like for 2014.

medialab101

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Quote from: nastybit on December 27, 2013, 06:59:36 PM

Quote from: btcprice on December 27, 2013, 02:16:52 PM

A lot of bitcoiners and altcoiners made a lot of money this year with the runup. If they cash out their profit before the end of the calendar year they (theoretically) have to pay taxes on their gains.

I'm guessing a lot of people are waiting until after the 1st of the year to sell their coins in order to cash out and realize a profit. Cashing out after the 1st of the year allows them one whole year to find tax havens such as mortgage interest and Roth IRAs.

Will people be selling a lot after the 1st of the year?

There will be no major cash out, US citizens only hold a small part of the BTC in circulation
And you forget that holders are greedy, we are all waiting for the next bubble aren't we

Although I agree, I still think there is going to be a ~10% cash-out. Why? Because I've considered doing the same thing myself. Depends on the price really.

kwoody

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Technology and Women. Amazing.

It's funny how the taxman is always there to collect when you win, but never around to help when you lose.

btcprice

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Quote from: bitcon on December 28, 2013, 12:05:31 AM

if you wait until 2014 youre just delaying the tax until next year.

if you have to pay taxes on capital gains shouldnt the IRS have to pay me for capital losses if i lose my investment?

If I wait until 2014 to sell I can deduct the cost of mortgage interest when I buy a house after the first. If I were to sell them today I wouldn't have that deduction and would have to pay on the entire profit.

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