Topic: You can't avoid taxes by investing in bitcoin - page 3. (Read 4929 times)

Definitely interesting.

The government is basiclaly saying that bitcoin is a good currency to make profits out of, and this is why you need to pay taxes on it just like any other legitimate asset you may be holding.

They're basically saying that bitcoin is legit, it's not a scam.

More great news for BTC

It seems the government wants their share of the pie in Bitcoin, targeting exchanges to spy on their clients Bitcoin transaction and earnings with it.  But I guess this is only limited to the exchanges but not on peer to peer transaction where people are able to transact with Bitcoin and goods directly.  So I guess there is still way to avoid taxes from the government.

I doubt that there has been anyone who, at some part in their consciousness, believes that they will be able to avoid all the taxes that they would otherwise experience if they were using conventional methods. I know I sure as hell expect taxes when I change my Bitcoin into fiat.

The government doesn't have to think something is necessarily profitable for them to want to tax it, they just have to be able to levy some kind of tax on it if there is some potential to make some kind of money.

While few people use Bitcoins and it doesn't affect the countrie's economy a lot, governments won't do any resistance against the currency and won't try to tax us, it would be a waste of time for them and a desnecessary decision. But when more people start using Bitcoin the governments will start menacing the crypto enthusiasts with extra fees and nasty things like that... Anyway, it won't happen soon, it's not going to happen now.

Yeah exactly, there is a choice here for the government to make.

To either acknowledge bitcoin as a functional currency that has the potential to overtake fiat, or to let it slide and nobody pays taxes on bitcoin holdings and profits they make out of that.

But either of these is favorable for the government.

Interesting case

No no no... We can avoid taxes. That's what we've been doing for several years and we'll do next years even though the great powers want us not to do so!

I used to like Coinbase until they started to sell out to the media and the IRS. It's possible to get Bitcoin and use Bitcoin even without the need of purchasing it on Exchanges. Bitcoin could get purchased pretty much off the paper trail when accessing places like LocalBitcoins and websites that feature person to person payments.
The article just states that Coinbase is trying to get more people not to use Bitcoin and the price won’t be that high because of that situation until something changes.

but to me i think it can only be possible when government will consider it as legal currency, only thne they can impose tax on bitcoin. otherwise there is no tax on any illegal item.

The biggest problem with converting bitcoins to fiat is in not being anonymous.
Governments may easily ask cryptocurrency exchanges for sensitive data about users, and they will list transactions to particular sellers.
You can also just not tell anyone about your bitcoins, and withdrawals to fiat later but that way is risky, there is always a chance that IRS will somehow know about it.

In my opinion, the best possible way would be to just pay taxes for bitcoin/fiat transactions.
It is possible that the tax from cryptocurrencies isn't high in your country, so you can just save most of the money from the trade you made.

The multi trillion dollar question: Who/what will take the role of this "bank"?

Guess I'm wrong then, It's just that every time I watch the news, it's always been about drugs and corruptions and I just assumed that our government doesn't really pay much attention to others important things like bitcoin as to what it can do to our economic growth.

I do not believe exchanges are proper intermediary for merchants to accept and process bitcoin transactions.

1. What if the merchants sell the bitcoins right away? They will be selling it at the exchanges.
2. If the buyer that spends bitcoin on the merchants do not, at the same time, or shortly thereafter, buy the same amount of bitcoin at the exchanges, then there will be a very strong downward force on bitcoin price as lots of merchants will be selling their bitcoins right away for fiat, thus supply overwhelming demand --> lower/falling price.
3. Bitcoins bought and sold at the exchanges are DIFFERENT from bitcoins spent on merchants, as bitcoins traded at exchanges come with leverage and thus most of them are phantom bitcoins.
4. Bitcoins spent on the merchants will not be those acquired by withdrawing from the exchanges, but acquired through p2p market like localbitcoins.
5. If all supply of bitcoins acquired from localbitcoins are spent on the merchants, which subsequently are sold at the exchanges, then the actual supply of bitcoin will be extremely distorted.
6. As bitcoins traded at exchanges cannot be withdrawn en masse from the exchanges (because most of them are phantom, fake), thus the thesis that exchanges are there to serve the merchants accepting payment in bitcoin will be extremely short-lived, not viable, impractical, and will be a great loss to everyone that participate in such relationship.

Thus if bitcoin is to be successfully accepted by merchants en masse, there needs to be a sort of "bank" that readily accepts bitcoin for fiat.

If you read the article it's only says Irs wants people to declare it under the form, but it's clearly evident they are helpless as they cannot do anything as they will. Never know who uses Bitcoins. So contrary to op and article Bitcoin is yet tax free, until you are foolish and decided to show them. The only thing here I agree with op is that, the government has started accepting Bitcoins. This should be good news and let's hope they start accepting Bitcoins as a second currency that would be nice.

In a way, regulated exchanges open the door for merchants to accept Bitcoin through payment processors. The government is fine with a

regulated environment for Bitcoin use, because through strict KYC/AML regulations they can track and monitor financial activities. You will

not find a "full anonymous" payment option that will not be banned by governments at some point in time. 

That localbitcoins.com is probably the best market to buy and sell bitcoins with high level of privacy without the need for a copy of your DNA.
You can shift your bitcoins around between your private wallet and localbitcoins' "wallet" to wipe clean any traces of ownership (unless localbitcoins betrays you).
And it has this escrow service to protect the buyers (in online purchases) from cheating sellers.
So why aren't you guys using localbitcoins for your trades?
Do you know your personal details submitted to the exchanges can be sold to 3rd party and/or be used against you in the future.
I can see (even years ago) many bitcoin service providers are taking their own liberty to collect customers' information even though there is NO law in place requiring so, under the pretense that they are doing this voluntarily for anti-money laundering.
Righttttttttt........

By right you should be running away in the other direction when you encounter such bitcoin service provider.

The exchanges are the "Achilles heel" when you are talking about anonymity because of their much security check. But this is true only in countries that recognize BTC as an asset (which is a good thing).
When you choose a buying method that protects your identity, there is no way to the government to tax it.

I don't think so. I think you're just not informed about things. Most countries knows bitcoin particularly if there is a sudden increase of bitcoin volume

on it just like what happens on Philippines. The government released a new regulation regarding virtual currencies and bitcoin is one of them.

Exchanges there are now required to register themselves as a money transfer business that's why exchanges there also requires verification.

I'll leave the link http://www.bsp.gov.ph/regulations/regulations.asp?id=3748

Well I guess in some country you can avoid taxes even though your into bitcoin like here in the Philippines, I think our government has still no idea about bitcoin because they are so busy fixing and making things right in our community like drug pushers and corrupt government officials.

I had experience reporting income taxes for online earnings and it was very difficult to do.
They just didn't know right code or business activity, where to put my earnings.
So, if I will try to report earnings in bitcoin, they will be even more confuse
It's fact that many national laws don't follow new, modern ways of doing business or earning on Internet.
If you keep funds in your btc wallet, you are safe.
If you try to exchange btc funds to your local currency, than you may have problem.

We can obviously feel the taxes not just directly because of the fees that bitcoin exchanges applied when using their services like deposits and withdrawals. And just by looking at the margin of their buy and sell rates especially when the price of bitcoin is considered as high, we can see that it's far from being profitable when you do buy and sell on that said exchanges. Even you have some hardware wallet with bitcoin loaded, still you will use an exchange services to fully use your bitcoin by withdrawing it. And to add, withdrawal fees are vary depends on the chosen payment method.

But that is fine in some of the cases as for them to become legal, they needs to comply with the government rules plus the fact that we really need their services so really expect some fees.