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California Passes Bill Declaring Cryptocurrency Legal Tender

post #1 of 11
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Good or bad? Discuss.

Bill AB129

Articles:

California passes bill declaring cryptocurrency legal-tender

California just passed law making bitcoins legal money
post #2 of 11
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Video:
post #3 of 11
Oh great this could only mean one thing
T......A........X
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post #4 of 11
Quote:
Originally Posted by lightsout View Post

Oh great this could only mean one thing
T......A........X

^This, the IRS won't be far behind.
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post #5 of 11
bad because this could make them even more popular
good because like lightsout said
they could tax them
then the loss popularity
they take a huge dive
280x flood the market to the point that we start using them as currency
post #6 of 11
Thread Starter 
Quote:
Originally Posted by lightsout View Post

Oh great this could only mean one thing
T......A........X
Quote:
Originally Posted by BulletSponge View Post

^This, the IRS won't be far behind.

You obviously haven't cashed out a large sum of money yet. The last I heard the IRS classifies it as bartering already. So you're taxed at income rates, instead of the lower capital gains rates. The GAO wrote a report urging the IRS to issue clear guidance on clarification of tax rules for virtual currencies way before this happened.

--
Edited by ALUCARDVPR - 2/22/14 at 10:44pm
post #7 of 11
Interesting.
    
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post #8 of 11
Quote:
Originally Posted by ALUCARDVPR View Post


You obviously haven't cashed out a large sum of money yet. The last I heard the IRS classifies it as bartering already. So you're taxed at income rates, instead of the lower capital gains rates. The GAO wrote a report urging the IRS to issue clear guidance on clarification of tax rules for virtual currencies way before this happened.

--

Does it now mean that you can be taxed on holdings of virtual currency as opposed to just being taxed when you just cashed out ?

I can see it being a potentially good thing as people move away from BTC towards coins which have better anonymity and more development into better security and anonymity with these coins which provides longevity with mining said future coins
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post #9 of 11
lol, since when was tax a bad thing? It's necessary to keep the country running.

Anyway, it was an interesting read, even though there were a number of mistakes in the paper. I'm not sure the author had a total grasp of what cryptocurrencies were, but did quiet well with their research though. I think the government need to start hiring younger more tech savvy people as advisors, although I am guessing their ego's are too big to be taught by someone 3 time younger than they are. I don't know, it just gets to me. Every time I see government officials speaking about this it's usually total rubbish, and that goes for the media too.
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post #10 of 11
Says the guy with 20% VAT.

For you guys in USA, go file it as long term capital gains (held 1 year or more) and deduct the cost of electricity/hardware.

http://www.irs.gov/taxtopics/tc409.html
Quote:
. If you have a net capital gain, that gain may be taxed at a lower tax rate than your ordinary income tax rates. The term "net capital gain" means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss for the year. The term "net long-term capital gain" means long-term capital gains reduced by long-term capital losses including any unused long-term capital loss carried over from previous years. Generally, for most taxpayers, net capital gain is taxed at rates no higher than 15%. Some or all net capital gain may be taxed at 0% if you are in the 10% or 15% ordinary income tax brackets. However, beginning in 2013, a new 20% rate on net capital gain applies to the extent that a taxpayer’s taxable income exceeds the thresholds set for the new 39.6% ordinary tax rate ($400,000 for single; $450,000 for married filing jointly or qualifying widow(er); $425,000 for head of household, and $225,000 for married filing separately).

Note: Net short-term capital gains are subject to taxation at your ordinary income tax rate.
I'm assuming nobody here is making $400K net in crypto , if you are, consult a good tax lawyer tongue.gif


See also https://en.bitcoin.it/wiki/Tax_compliance and http://www.reddit.com/r/Bitcoin/comments/1uccfz/i_am_a_tax_attorney_here_are_my_answers_to_the/
Edited by AlphaC - 3/2/14 at 4:05pm
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