Wondering about Taxes and legal stuff in USA

Tiews223

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Quote from: Emmami@758 on October 09, 2017, 04:16:11 AM

Quote from: HippiePyro on August 14, 2017, 04:08:10 PM

So lets suppose I invest and trade $250 in crypto and by this time next year I have $250,000. I sell it for fiat to my bank account. What sort of taxes would I have to pay and what other legal issues might I face to achieve this? This is based on the laws rights now. I'd like to hear from someone who has done this before.

yeah i agree with that.if we are buying any products on that product we have to pay tax.if we are buying clothing, furniture, and any stuff we want to buy we have to pay tax. so not only in USA most of the country's had this rule to paying tax. but in USA tax rules are very high. but they country implanting economically very well.

I think paying taxes in general on Bitcoins is okay and will be good for the revenue of the country or state. Then again, this will always depend on the type of tax to be imposed, percentage of tax, rules and regulations, limitations and other legalities.

J_W_L

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Just as a heads up I've launched a cryptocurrency tax engine that uses a tax algorithm to save upwards of 60% in taxes. Thought I'd post here in case anyone else is looking for tax assistance in the USA.

https://computis.io

Basically it uses something called Specific Identification to individually choose which BTC/Altcoin is used in an trade or sale. This method is better than FIFO or LIFO because you're stuck with using whatever you bought first or last, respectively, if you use those methods.

Lancusters

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Quote from: junoreactor on October 20, 2017, 04:47:34 AM

Quote from: RodeoX on October 18, 2017, 10:10:07 AM

Quote from: junoreactor on October 17, 2017, 06:21:28 AM

I do wonder how exactly can they implement taxes, I mean which %? How?

Let's take an example:

1/ I own a bank card issued in a country which is not USA, I used this bank card to buy 1 BTC for the price of $5500
2/ Tomorrow, the price of Bitcoin falls to $3500, I panick and sell my whole BTC
3/ the government has no idea that I lost money, and could imagine that I bought this bitcoin two years ago and made a nice profit
4/ so why should I pay a tax when I lost money? Will the government ask me for a proof of my BTC purchase?
This raises questions. In such as scenario, I can't see how this is different to investing in stocks.

In that case you would not pay. Capitol gains applies only to GAINS you made. Since you actually lost money you can file a LOSS. You have an offset to LOWER your taxes in that case.

Hi. Yes, in a perfect world, it all makes sense, but in the example I took, what proof do I provide to show that I lost money... I used a bank card issued outside of the US and the US banking system has no idea about the existence of this card (I take this example because I traveled a lot in my life, lived in 4 countries, and right now have bank cards issued in 3 different countries).
I do not know how exactly how the US government will be able to track my Bitcoin purchase that I made with this bank card issued outside of the US.
These things sound complicated.

Americans can track any transaction made in dollars. But it will be income received in another country and so the Americans have nothing to do with the money. Only your card may not work in America. When the card validity ends you, too, can cause problems with opening accounts for non-residents. Each case is individual but if it is possible not to pay tax, I support it.

HippiePyro

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A non technical guy in a technical world

My own reasearching says that they could track that card to you, through various financial laws and agreements with debit card issuer. If your a US citizen. However it's your duty to report income or losses on your taxes. Depending on the amount of money will determine if it's profitable for them to bother tracing your purchase in the first place. Its only illegal if you get caught.

Btc4Proxies

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I always thought you were supposed to take smaller quantities out so you don't pay tax on the bulk of it.
I also wonder how this works out for businesses too. anyone have an idea?

junoreactor

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Quote from: RodeoX on October 18, 2017, 10:10:07 AM

Quote from: junoreactor on October 17, 2017, 06:21:28 AM

I do wonder how exactly can they implement taxes, I mean which %? How?

Let's take an example:

1/ I own a bank card issued in a country which is not USA, I used this bank card to buy 1 BTC for the price of $5500
2/ Tomorrow, the price of Bitcoin falls to $3500, I panick and sell my whole BTC
3/ the government has no idea that I lost money, and could imagine that I bought this bitcoin two years ago and made a nice profit
4/ so why should I pay a tax when I lost money? Will the government ask me for a proof of my BTC purchase?
This raises questions. In such as scenario, I can't see how this is different to investing in stocks.

In that case you would not pay. Capitol gains applies only to GAINS you made. Since you actually lost money you can file a LOSS. You have an offset to LOWER your taxes in that case.

Hi. Yes, in a perfect world, it all makes sense, but in the example I took, what proof do I provide to show that I lost money... I used a bank card issued outside of the US and the US banking system has no idea about the existence of this card (I take this example because I traveled a lot in my life, lived in 4 countries, and right now have bank cards issued in 3 different countries).
I do not know how exactly how the US government will be able to track my Bitcoin purchase that I made with this bank card issued outside of the US.
These things sound complicated.

WhiteOutMashups

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Many traders seem to sell that for cash instead, instead of trying to immediately deposit hundreds of thousands to a bank account. That is what I have seen others discuss, but am not sure if it has actually happened anywhere.

Taki

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I don't know the law in your country. But I think after exchange you can't move all 250000$ on your bank's account at once. The exchanger sets the daily limit which you can withdraw. As I know this sum is usually not big and it will not awake any questions from the government when you withdraw such sum a day. I think if it would be 250000$ appeared on your account at once you will need to reply first where from such money and normally they will ask you to declarate it.

RodeoX

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The revolution will be monetized!

Quote from: junoreactor on October 17, 2017, 06:21:28 AM

I do wonder how exactly can they implement taxes, I mean which %? How?

Let's take an example:

1/ I own a bank card issued in a country which is not USA, I used this bank card to buy 1 BTC for the price of $5500
2/ Tomorrow, the price of Bitcoin falls to $3500, I panick and sell my whole BTC
3/ the government has no idea that I lost money, and could imagine that I bought this bitcoin two years ago and made a nice profit
4/ so why should I pay a tax when I lost money? Will the government ask me for a proof of my BTC purchase?
This raises questions. In such as scenario, I can't see how this is different to investing in stocks.

In that case you would not pay. Capitol gains applies only to GAINS you made. Since you actually lost money you can file a LOSS. You have an offset to LOWER your taxes in that case.

olubams

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Quote from: HippiePyro on August 14, 2017, 04:08:10 PM

So lets suppose I invest and trade $250 in crypto and by this time next year I have $250,000. I sell it for fiat to my bank account. What sort of taxes would I have to pay and what other legal issues might I face to achieve this? This is based on the laws rights now. I'd like to hear from someone who has done this before.

I am equally waiting for a perfect answer from someone who is from the advance country like the United States because they serve as model for other countries to follow in the case of similar transactions. However, the treatment wont be different from the classes of items bitcoin will be categorised into. If in a country its is categorised as assets, then it will be treated as capital gains, if it is treated as investment, then withholding tax will suffice. Understanding the categorisation will go a long way in understanding what its exactly the treatment will look like.

jhanson

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Great question! I'm wondering the same thing for businesses. How are all of these ico's doing their taxes/bookeeping when they raise btc/eth and pay people in the same...anyoen have a clue??

junoreactor

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Activity: 196

Merit: 109

I do wonder how exactly can they implement taxes, I mean which %? How?

Let's take an example:

1/ I own a bank card issued in a country which is not USA, I used this bank card to buy 1 BTC for the price of $5500
2/ Tomorrow, the price of Bitcoin falls to $3500, I panick and sell my whole BTC
3/ the government has no idea that I lost money, and could imagine that I bought this bitcoin two years ago and made a nice profit
4/ so why should I pay a tax when I lost money? Will the government ask me for a proof of my BTC purchase?
This raises questions. In such as scenario, I can't see how this is different to investing in stocks.

SixOfFive

sr. member

Activity: 630

Merit: 257

Even Govt is worried about it. Grin

When you exchange crypto to the fiat currency. You have to pay tax on capital gain that you earned from the profit or income from the investment. Percentage of tax depend upon your country revenue law and tax slab decided by govt.

RodeoX

legendary

Activity: 3066

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The revolution will be monetized!

Quote from: Palmerson on October 10, 2017, 06:41:33 AM

Quote from: jonnywicked on October 10, 2017, 03:54:03 AM

Quote

You (the little man) are supposed to go to work and earn money for the rich while paying their taxes.

that's so true. they will make us and our families starve but pay every single penny to feed ones who don't work

Are you a Communist? There are rich people who got his fortune in inheritance and can afford to comfortably exist. But there are people who made themselves their condition themselves. At a time when you are in your weekend vacationing with his family for a barbecue they worked. Stop counting other people's money and spend that time trying to earn their money.

That would be a strong argument if America practiced capitalism. It does not. We have an anti-capitalist system that seeks to keep people out of markets and in the salt mine. For example, you might fancy yourself as an "investor". But in America you are only able to really invest if you have "qualified investor" status. How does one become qualified? Easy, you must be rich. You must have at least a million dollars and be able to show that you are likely to get another million next year. That's it.

So if you have a PhD. in economics that means nothing. If you have down syndrome and a million bucks then you are qualified. The theory is that the little man cannot be trusted with his money because he is too stupid. After all, if he was not stupid he would have a million dollars.

I have no problem with people making or inheriting money. But I will continue to use my BTC to bring down cronyism pretending to be capitalism.

Palmerson

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Live cams shows pimped with cryptocurrency

Quote from: jonnywicked on October 10, 2017, 03:54:03 AM

Quote

You (the little man) are supposed to go to work and earn money for the rich while paying their taxes.

that's so true. they will make us and our families starve but pay every single penny to feed ones who don't work

Are you a Communist? There are rich people who got his fortune in inheritance and can afford to comfortably exist. But there are people who made themselves their condition themselves. At a time when you are in your weekend vacationing with his family for a barbecue they worked. Stop counting other people's money and spend that time trying to earn their money.

jonnywicked

newbie

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Merit: 0

Quote

You (the little man) are supposed to go to work and earn money for the rich while paying their taxes.

that's so true. they will make us and our families starve but pay every single penny to feed ones who don't work

RodeoX

legendary

Activity: 3066

Merit: 1145

The revolution will be monetized!

Quote from: Blocken on August 15, 2017, 06:39:41 PM

IF you can keep track of it all, you could pay capitol gain tax. That's hardly possible. Plus I don't think capitol gain tax is a good idea for cryptos because it implies that there is some sort of jurisdiction on them. I recommend just paying income tax. Fact is that you left the purview of the state, and re-entered it. The first time, Coinbase or whatever paid the tax. The second time you converted you now own a big asset in the purview of the state that facilitates the fiat, so it's your responsibility.

To clarify, you don't get to pick which taxes you pay. Bitcoin, like anything in the world, that gains in value and provides you with a profit is taxable as capitol gains. It is not "income tax" that you pay because it is not income unless you are getting paid at work with bitcoin.

Be happy it is not taxable as income. Income tax averages 31.5% of working income. Capitol gains varies, but is normally not higher that 15%. You are getting a tax break because traditionally Cap Gains are for the rich. The rich in the USA have not paid their share in a generation. You (the little man) are supposed to go to work and earn money for the rich while paying their taxes.

matuson

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I think that the emergence of crypto-currencies will push the country to changes in the tax laws. Why pay income tax if you keep the money in the Bank and stimulate the economy of their country. Besides, there's always a way to hide your income. When you spend money you pay the sales tax anyway because the taxes included in the price. Governments want a few times to tax your money, and this leads to the fact that people don't want to pay taxes.

Emmami@758

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Quote from: HippiePyro on August 14, 2017, 04:08:10 PM

So lets suppose I invest and trade $250 in crypto and by this time next year I have $250,000. I sell it for fiat to my bank account. What sort of taxes would I have to pay and what other legal issues might I face to achieve this? This is based on the laws rights now. I'd like to hear from someone who has done this before.

yeah i agree with that.if we are buying any products on that product we have to pay tax.if we are buying clothing, furniture, and any stuff we want to buy we have to pay tax. so not only in USA most of the country's had this rule to paying tax. but in USA tax rules are very high. but they country implanting economically very well.

Blocken

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Crypto Lobbyist

IF you can keep track of it all, you could pay capitol gain tax. That's hardly possible. Plus I don't think capitol gain tax is a good idea for cryptos because it implies that there is some sort of jurisdiction on them. I recommend just paying income tax. Fact is that you left the purview of the state, and re-entered it. The first time, Coinbase or whatever paid the tax. The second time you converted you now own a big asset in the purview of the state that facilitates the fiat, so it's your responsibility.

wieder

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Quote from: maeusi on August 14, 2017, 05:44:59 PM

For the second part of your question you could get an answer of an attourny, who is so nice, to give free advices on bitcoinforum.
https://bitcointalksearch.org/topic/bitcoin-attorney-will-answer-all-questions-1724798
For taxes and legality you could ask or also find an answer here:
https://bitcointalk.org/index.php?board=74.0

I also had these questions, but after following the links, it became clear to me. Thank you!

maeusi

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For the second part of your question you could get an answer of an attourny, who is so nice, to give free advices on bitcoinforum.
https://bitcointalksearch.org/topic/bitcoin-attorney-will-answer-all-questions-1724798
For taxes and legality you could ask or also find an answer here:
https://bitcointalk.org/index.php?board=74.0

HippiePyro

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Activity: 476

Merit: 107

A non technical guy in a technical world

So lets suppose I invest and trade $250 in crypto and by this time next year I have $250,000. I sell it for fiat to my bank account. What sort of taxes would I have to pay and what other legal issues might I face to achieve this? This is based on the laws rights now. I'd like to hear from someone who has done this before.

Topic: Wondering about Taxes and legal stuff in USA (Read 1387 times)