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[GIZ] IRS Declares Bitcoin Is Property and Must Be Taxed As Such - Page 11

post #101 of 199
Quote:
Originally Posted by Bl00dyMurd3r View Post

Exactly, tax evasion or not, the IRS finally decided to exploit this and steal some more money, given the mining / crypto boom. Plain and simple.

It's not exploitation or stealing. Money made on bitcoins is income. Whether its by mining directly or by having them accrue in value and selling them. Its no different then getting your pay check or selling a stock. Part of the deal with the government providing a lot of basic services and protection is we have to pay for it, all they are doing is not letting people circumvent this with convertible virtual currencies. The crypto currency is also extremely risky since there is no protection or regulation. I would be very careful in having too much money into it.
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post #102 of 199
bloody money mongers just have to screw with anything good
post #103 of 199
Quote:
Originally Posted by KSIMP88 View Post

oh please. People have been using bitcoin for tax evasion. Plain and simple.

oh no, tax evasion. that stolen money surely will go to better use. i should just follow what they say, because it's law. tax for the sake of taxing.
post #104 of 199
wasnt bitcoin created to avoid these kinds of things from happening?
post #105 of 199
Pretty sure might have been answered. But from question 7 and 8. I understand 7. It is basically like buying and selling stock to get a gain/loss.

But question 8 gets me. They are saying that I have to include the BTC as gross income the at the value I get it at that time? So if it is valued at $625, then I must include it as gross income for the year? Then when I sell it at $650 I have to pay a capital gain tax of the $25 it went up in value? That sounds like double taxation. If so I have been out of school many moons, isn't that illegal?

Q-7: What type of gain or loss does a taxpayer realize on the sale or exchange of virtual currency?

A-7: The character of the gain or loss generally depends on whether the virtual currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is a capital asset in the hands of the taxpayer. For example, stocks, bonds, and other investment property are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the sale or exchange of virtual currency that is not a capital asset in the hands of the taxpayer. Inventory and other property held mainly for sale to customers in a trade or business are examples of property that is not a capital asset. See Publication 544 for more information about capital assets and the character of gain or loss.

Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?

A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.

Read more: http://www.businessinsider.com/irs-bitcoin-is-property-not-currency-full-release-2014-3#ixzz2x2TzWZwy
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post #106 of 199
Would that be funny if the IRS came after you for making a profit on the Auction House for that 2 million Gold you sold in game and made a 500k profit, "Mr Leeroy, we um need you to pay the IRS , and if not you will be charged with Tax evasion" biggrin.gif that of course is the not so plausible example.

The plausible example are those that make a living from the selling of virtual goods "Mined" in MMO's. Not that I would or have in the past rolleyes.gif ahem but there are tons of sales of virtual characters and items "Gold" where Paypal has been used for years to purchase with Cash $$$.

The enforcement is the problem of course.
post #107 of 199
Lol like this is even remotely enforceable.
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post #108 of 199
Quote:
Originally Posted by lolwatpear View Post

oh no, tax evasion. that stolen money surely will go to better use. i should just follow what they say, because it's law. tax for the sake of taxing.
This, ladies and gentlemen, is a child's reply.
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post #109 of 199
So - problem that I see. It says we must basically keep track of how many coins and at what fair market value per day of receipt. But pooled mining can be made up of weeks or months; how does one determine the coins on a given day in pooled mining (finding fair market value is easy)? I would imagine that you could just go off of when it was deposited into your wallet, but that technically isn't the "date of receipt" - the date of receipt would be the day that you mined a portion of the coins you had stored on the pool.

I wish they would state the rules for how it should be handled and have them come into effect for the next tax year and just say screw anything prior to the date the law comes into effect. It would make life so much easier for everybody rolleyes.gif
[Developers could quickly build system that will better manage the taxes for both pools, wallets, exchanges, and retailers that would make filing the property tax easy. This will probably happen anyways, but at least ignoring all previous mined/exchanged/etc coins would make the process less messy this time around.]
Edited by Blast - 3/25/14 at 11:15pm
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post #110 of 199
The organized crime industry known as the IRS wants their cut? Ya don't say!
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