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[GIZ] IRS Declares Bitcoin Is Property and Must Be Taxed As Such - Page 15

post #141 of 199
How can they tax something anonymous and untraceable ? I don't think people have anything to worry about. Not when this is mainly only used on the black market.
post #142 of 199
Quote:
Originally Posted by RiverOfIce View Post

Quote:
Originally Posted by Vagrant Storm View Post

This is only true for services though. Where you trade time for money. Trading gold would get a little...funky though...that is like trading a stock for a stock and there are different rules for that. I believe for these rules to apply to Bitcoins the federal government would have to officially recognize that Bitcoins hold a certain value and enforce it...meaning regulate it.

However, if I trade cars with you neither of us declares the car we received as income because it is goods for goods. Meaning that if Newegg started accepting Bitcoins as payment I could give Newegg Bitcoins in trade for a new CPU. Newegg wouldn't get taxed on the bitcoins until they exchanged them for cash and they transferred from goods to income. Similar to how no one gets taxed on the GPUs EVGA gets/gives from the step up program.

Please, please, please don't do your own taxes. Please.

In the state of Minnesota, which I am assuming you are from, if you trade your vehicle for another vehicle, you will have to pay the sells tax on the vechile, sorry. Just the way the world works.

https://dps.mn.gov/divisions/dvs/pages/motor-vehicle-sales-tax.aspx

Link proving you wrong.

"Tax Rate 6.5%:

Sales tax is due on most purchases or acquisitions of motor vehicles. It is based on the total purchase price or fair market value of the vehicle, whichever is higher. When a vehicle is acquired for nominal or no monetary consideration, tax must be based on the average value of similar vehicles."

The specific law proving you wrong.

Please do not do your own taxes.

But nothing in that link has to do with trading a car for something else of value...that is about sales where a car is traded for money. I've never read anything anywhere about reporting the trade of goods for goods requiring income tax...or even sales tax. If so, I've been doing it wrong...so is every person I know who's done trades and being a farm kid I was involved in a lot of trades of goods for goods and no accountant ever cared about it...and when I was older I was highly involved with the farms taxes. I mean, ever hear of a swap meet? If income tax should be applied to anything traded...there would probably be IRS agents stalking the fair grounds.

Some states do have a "use tax" that can get applied to trades, but it is really low and I've never heard of it being paid out side of real estate trades and it might be geared more towards property tax in general. I am not really sure.
Edited by Vagrant Storm - 3/26/14 at 2:50pm
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post #143 of 199
Quote:
Originally Posted by nagle3092 View Post

Blockchain

Here is a good article.

http://www.forbes.com/sites/andygreenberg/2013/09/05/follow-the-bitcoins-how-we-got-busted-buying-drugs-on-silk-roads-black-market/

(this is only a guess, I don't participate in any coins)

More specifically the exchanges / pools

The exchanges/pools link you to a BTC address , that address has a public ledger on the block chain
Quote:
Originally Posted by blodflekk View Post

How can they tax something anonymous and untraceable ? I don't think people have anything to worry about. Not when this is mainly only used on the black market.

It's pseudonymous not anonymous. See above & http://www.businessweek.com/articles/2013-08-27/bitcoin-may-not-be-so-anonymous-after-all
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post #144 of 199
Quote:
Originally Posted by Vagrant Storm View Post

But nothing in that link has to do with trading a car for something else of value...that is about sales where a car is traded for money. I've never read anything anywhere about reporting the trade of goods for goods requiring income tax...or even sales tax. If so, I've been doing it wrong...so is every person I know who's done trades and being a farm kid I was involved in a lot of trades of goods for goods and no accountant ever cared about it...and when I was older I was highly involved with the farms taxes. I mean, ever hear of a swap meet? If income tax should be applied to anything traded...there would probably be IRS agents stalking the fair grounds.

Some states do have a "use tax" that can get applied to trades, but it is really low and I've never heard of it being paid out side of real estate trades and it might be geared more towards property tax in general. I am not really sure.

I'm not sure how the IRS determines what is taxable or not. Even using the dollar bill is just a form of trade. I trade you 3 boxes of Kraft Mac n Cheese for 3 promisary notes that are supposed to be worth $1. Heck if I opened a business and never took payment in promisary notes, how would the tax me? They would just throw me in jail for tax evasion or something. So you have the right to trade until they want a share of your stuff, then they force you to use their currency. That is why we have laws to prevent Federal Government from making people buy things...it would be forced income in a sense....wait...*health cough care cough*
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post #145 of 199
Quote:
Originally Posted by blodflekk View Post

How can they tax something anonymous and untraceable ? I don't think people have anything to worry about. Not when this is mainly only used on the black market.
Because it is neither anonymous nor untraceable.
post #146 of 199
Quote:
Originally Posted by ejb222 View Post

Quote:
Originally Posted by Vagrant Storm View Post

But nothing in that link has to do with trading a car for something else of value...that is about sales where a car is traded for money. I've never read anything anywhere about reporting the trade of goods for goods requiring income tax...or even sales tax. If so, I've been doing it wrong...so is every person I know who's done trades and being a farm kid I was involved in a lot of trades of goods for goods and no accountant ever cared about it...and when I was older I was highly involved with the farms taxes. I mean, ever hear of a swap meet? If income tax should be applied to anything traded...there would probably be IRS agents stalking the fair grounds.

Some states do have a "use tax" that can get applied to trades, but it is really low and I've never heard of it being paid out side of real estate trades and it might be geared more towards property tax in general. I am not really sure.

I'm not sure how the IRS determines what is taxable or not. Even using the dollar bill is just a form of trade. I trade you 3 boxes of Kraft Mac n Cheese for 3 promisary notes that are supposed to be worth $1. Heck if I opened a business and never took payment in promisary notes, how would the tax me? They would just throw me in jail for tax evasion or something. So you have the right to trade until they want a share of your stuff, then they force you to use their currency. That is why we have laws to prevent Federal Government from making people buy things...it would be forced income in a sense....wait...*health cough care cough*

If you opened a business and only took payment in the form of food or something...yeah...I don't think the government would ever come after you for taxes no matter how much food you had taken as payment. The food isn't is a federally accepted form of currency. Though, the closest thing to that situation might be Huderites and Amish colonies...but even they eventually have to trade for US dollars and as soon as they do they are paying taxes. So it is hard to say what would happen since that's never really happened. Though now with virtual currency I think it might actually be possible.

I am betting we will see a Supreme Court case on this in the relatively near future. Then all will be made clear.
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post #147 of 199
Well this will be interesting to see how it plays out. What if you have your wallet in different locations other than the US?
    
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post #148 of 199
Quote:
Originally Posted by Willanhanyard View Post

Well this will be interesting to see how it plays out. What if you have your wallet in different locations other than the US?

That would be impossible to prove. Also the only way they can collect tax is if they start auditing the USD exchanges.

You can easily avoid that by selling you coins for cash locally, however that sounds like a stupid and potentially suicidal idea.
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post #149 of 199
The IRS usually has to go to the house to get new tax's approved.
post #150 of 199
Quote:
Originally Posted by SCollins View Post

The IRS usually has to go to the house to get new tax's approved.

This isn't a new tax...this is taking existing tax laws and applying them to Bitcoin transactions.
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