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[GIZ] IRS Declares Bitcoin Is Property and Must Be Taxed As Such - Page 4

post #31 of 199
Quote:
Originally Posted by Chakravant View Post

First off, real world virtual currency is a rather oxymoronic term. It is either real world, or virtual. Second, the IRS ruling makes no such distinction. It regards virtual currency. Period. Full stop. We can argue the intent of the law until we are blue in the face. I don't want to do that. I want to talk about the ruling as it is written, and the implications of the ruling as it is written.

As it stands, all virtual currency of all kinds is now considered property. Simcity cash is now taxable, as is D2 gold. That is why this ruling will be thrown out. it is so broad in scope that it would damage game developers to the point that they will lobby against it, or get the ruling changed at the very least.

I dont think it will be thrown out. I mean all politicians are gonna see is an easy bill that pads Washington's pocket book. no on is going to lobby for this bill to be thrown out, and no one has a good reason for it not to be taxed. And the only people that are gonna piss off are the people that barely vote in the first place.

As far as simcity cash, D2 gold, wow gold etc. wrapping them into this bill in not an issue. Its not how taxes on property works, the only time that you have to pay taxes on property is when it is sold for USD and you make capital gains off of it. Companies like blizzard wont have to pay taxes on the gold and silver that mobs drop proportionally to its USD value that's ridiculous. They do however have to pay taxes on any money they make from selling in game gold or goods, which is something they already do... It wont affect big companies for them to care enough to lobby against it.
post #32 of 199
Quote:
Originally Posted by Chakravant View Post

Now you begin to see how foolishly this ruling is written. Better start figuring out the tax year's average dilithium to zen exchange rate, so you can accurately report your earnings.

You did write down or otherwise track all the dilithium you've earned over the course of the entire year, didn't you?

you wont have to pay taxes on it unless you have sold the dilithium. you wont need to keep track of it bc its not considered a capital gain unless you sell it for a "real world currency" people here are misinterpreting the law.
post #33 of 199
Quote:
Originally Posted by Wakalakaz View Post

you wont have to pay taxes on it unless you have sold the dilithium. you wont need to keep track of it bc its not considered a capital gain unless you sell it for a "real world currency" people here are misinterpreting the law.

It's not that clear cut.

There's also taxes on trade of goods (barter)

http://www.irs.gov/taxtopics/tc420.html

& http://www.investopedia.com/financial-edge/0312/the-tax-implications-of-bartering.aspx

are good sources
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post #34 of 199
Quote:
Originally Posted by Chakravant View Post

First off, real world virtual currency is a rather oxymoronic term. It is either real world, or virtual. Second, the IRS ruling makes no such distinction. It regards virtual currency. Period. Full stop. We can argue the intent of the law until we are blue in the face. I don't want to do that. I want to talk about the ruling as it is written, and the implications of the ruling as it is written.

As it stands, all virtual currency of all kinds is now considered property. Simcity cash is now taxable, as is D2 gold. That is why this ruling will be thrown out. it is so broad in scope that it would damage game developers to the point that they will lobby against it, or get the ruling changed at the very least.

It actually does distinguish you chose not to read it. The tax rules only apply to Convertible Virtual currencies which by definition gold in wow doesn't fall into. You can try and argue semantics that it does but it really doesnt. Bit coins has an equivalent value in real currency, or acts as a substitute for real currency, wow gold doesn't really follow that. The gold AH for diablo may have counted since there was an actual exchange but wow gold doesn't hold up to that.
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post #35 of 199
Quote:
Originally Posted by b.walker36 View Post

It actually does distinguish you chose not to read it. The tax rules only apply to Convertible Virtual currencies which by definition gold in wow doesn't fall into. You can try and argue semantics that it does but it really doesnt. Bit coins has an equivalent value in real currency, or acts as a substitute for real currency, wow gold doesn't really follow that. The gold AH for diablo may have counted since there was an actual exchange but wow gold doesn't hold up to that.

Don't bother anymore, the guy is off his nut and isn't going to listen to reason.

I am more shocked that people are surprised by this ruling than anything, the U.S. Government declared their intentions to work against BitCoin when it was first announced years ago. The U.S. Government came right out and said they were against it.
    
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post #36 of 199
Quote:
Originally Posted by Wakalakaz View Post

I dont think it will be thrown out. I mean all politicians are gonna see is an easy bill that pads Washington's pocket book. no on is going to lobby for this bill to be thrown out, and no one has a good reason for it not to be taxed. And the only people that are gonna piss off are the people that barely vote in the first place.
Activision/Blizzard and EA stand to lose billions under this ruling. That seems like a good enough reason to me.
Quote:
As far as simcity cash, D2 gold, wow gold etc. wrapping them into this bill in not an issue. Its not how taxes on property works, the only time that you have to pay taxes on property is when it is sold for USD and you make capital gains off of it. Companies like blizzard wont have to pay taxes on the gold and silver that mobs drop proportionally to its USD value that's ridiculous. They do however have to pay taxes on any money they make from selling in game gold or goods, which is something they already do... It wont affect big companies for them to care enough to lobby against it.
At best, businesses could use long term capital gains exceptions to limit their tax liability. Using profits to purchase property does not mean you do not pay taxes on those profits prior to purchasing the property. That's why the property has a fair market value. The IRS ruling goes into how to figure the fair market value of all virtual currencies as property, not just those that have a real world exchange rate.

Read the ruling. It's that bad.

Edit: I'll help you out.

For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied.
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post #37 of 199
Quote:
Originally Posted by AlphaC View Post

It's not that clear cut.

There's also taxes on trade of goods (barter)

http://www.irs.gov/taxtopics/tc420.html

& http://www.investopedia.com/financial-edge/0312/the-tax-implications-of-bartering.aspx

are good sources

I see, yeah with taxes it never is really clear cut. but as far as the concerns of Chakravant, i don't think the argument he brings up would hold up in a court or in an argument of policy.
post #38 of 199
Quote:
Originally Posted by PostalTwinkie View Post

Don't bother anymore, the guy is off his nut and isn't going to listen to reason.

I am more shocked that people are surprised by this ruling than anything, the U.S. Government declared their intentions to work against BitCoin when it was first announced years ago. The U.S. Government came right out and said they were against it.

yeah, It also acts just like stocks but with zero regulations. These same people will be the first to blame the government for not protecting them when some dude finds a way to screw the system and crash the value while making millions.

Edit: Chakravant really needs to read the actual notice and the other docs it points to for reference. Let me guess my gil in FF7 is taxable......
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post #39 of 199
Quote:
Originally Posted by AlphaC View Post

Quote:
Originally Posted by xNovax View Post

15% is most of the miners profit.

15% of the gain after you deduct costs to acquire.

Have you not filed a tax return? Gross not = net

see my post here
http://www.overclock.net/t/1469181/california-passes-bill-declaring-cryptocurrency-legal-tender

In other words, if you buy computer hardware with the mining profits, you can essentially deduct everything so that you don't pay a single cent in taxes?
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post #40 of 199
Well, this just means my utility/internet cost is now a business expense as well as all the hardware I've bought recently. This is one of those times I'm really glad my father is retired IRS.
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