Originally Posted by Syan48306
Now, if it were like 10 - 15 million worth in bitcoins, hell I might even consider revoking my US citizenship for that kind of money. Hongkong isn't a bad place to live
LOL If I had even a tenth of that amount I would do it. I have a decent little stash but it's still less than I make in a year... If I had more than $1M in BTC I would simply quit my job and cash out a quarter of it now, and then 10% per year while consulting for the difference in income.
As far as AngryButcher's comments - that's the most conservative interpretation, and perhaps the safest but I tend to go with a more broad interpretation of the tax code (as it is written). There currently aren't any truly specific guidelines for crypto, but his comment is definitely to the letter of the law - and treats each crypto as if it were a security.
My take on this is that I consider all cryptos to be the same commodity... i.e. If I exchange BTC/LTC into USD which I deposit into my account - then I declare the capital gains with either a $0 basis (if mined) or the cost purchased at
if bought with USD. First in first out (so basically they're all mined coins unless I cash out completely). Everything held for at least 1 year so it is always a long term gain.
As the exchanges I trade on regularly are all crypto-to-crypto trades - I still consider this the same basis, and profits in crypto are the same as mining proceeds... $0 basis but non-taxable until they become an actual 'gain' and are then declared. Now that may need to change in the future if we actually get a truly regulated
exchange that reports dividends and profit/loss on a 1099-B or reports at least enough to properly deal with a Schedule D. I already do that with my stock portfolio, but there's a significantly different level of risk and reporting there.
I feel completely defensible in my position on crypto-to-crypto trades... as it's similar as a P2P exchange of like goods. Yes, technically
they would like
you to pay taxes on proceeds from yard sales or if you trade a truck to your neighbor for a BBQ and a travel trailer... but everyone is well aware that they're never going to have the ability to actually collect anything in those cases. At least to my way of thinking, if it's stays crypto... there's no capital being gained. Since I can't declare BTC/LTC/DOGE holdings etc. for consideration as collateral on a debt or in insurance valuations, etc.. it seems ridiculous that I would need to report that I made .5 BTC by trading back and forth on BTC/DOGE pairs over the course of a month... and I'm certainly not going to bother submitting all ~80 trades or so to document those gains.
I will, however, pay taxes on that .5BTC just like the rest of my cryptos (and at a $0 cost-basis) if and when they become USD or any hard asset with a declarable value in USD.
If I was already dodging creditors, utilities and tax collectors like some people around these parts... then yes, I'd probably go "all-in" and never pay any... and hope I could get out of the country when they actually came to collect. As it stands I prefer to pay my taxes, declare my earnings, and stack my cryptos... makes it pretty easy to sleep at night IMO.