4 ms·

The only tax in Bitcoin is the voluntary mining fee. If governments want to collect tax on Bitcoin transactions, they will need to run a mining farm.

cwyers 11y ago
Try telling the IRS that during an audit and see how long it takes for you to be in prison.
- jsprogrammer 11y ago
  Sorry, are you saying that every blockchain entry that is created needs to be reported to the IRS?
  - adrianmacneil 11y ago
    If you live in the US, or are a US citizen, then yes, every bitcoin transaction you make should technically be reported to the IRS as capital gains/losses on your tax return.
    - dllthomas 11y ago
      Every bitcoin transaction you make involving accounts held by different entities, anyway.
  - detaro 11y ago
    How would you even get the idea that this was the claim made? Your claim was that bitcoin transactions can't be taxed outside of mining fees, the negative of that is not "All bitcoin transactions have to be reported and taxed"
    - jsprogrammer 11y ago
      cwyers statement is the one that implies all bitcoin transactions have to be reported and taxed. Why would the IRS care about transactions that don't? The statement is only relevant to my comment if the IRS requires all transactions to be reported and taxed. Typically I assume replies to my comments are relevant. That is why I made the inference I did.
      - cwyers 11y ago
        That wasn't my implication, and a bunch of people around here have understood that, so I don't think it was a problem with me being unclear. You have to pay taxes on any Bitcoin transaction you would pay tax on if the same transaction was conducted in cash or gold or any other similar medium of exchange. Which contradicts your "if governments want to collect tax on Bitcoin transactions, they will need to run a mining farm" statement without being a blanket statement that every blockchain transaction needs to be taxed.
        jsprogrammer 11y ago
        The tax is on the underlying physical exchange of goods or services, not on placing an entry in the blockchain.
vidarh 11y ago
This is only true if you are prepared to commit tax fraud, or if Bitcoin is not considered a taxable asset class in your jurisdiction. The chances of getting away with it may be decent depending on how you obtain and sell your BTC, but that does not make it any more legal than avoiding taxes on cash transactions you do that there's tax liabilities on.
- jsprogrammer 11y ago
  If you are making taxable transactions, that is for you to deal with the appropriate authorities. Putting entries in the block chain is not a taxable transaction anywhere that I am aware of, except that you may need to add an allotment for the miner to process your transaction.
  - icebraining 11y ago
    That's like saying "signing a paper is not a taxable transaction" - if that paper is a transfer of property, it probably is a taxable event, and so would the entry in the blockchain probably be, if it's between address owned by different people.
    - jsprogrammer 11y ago
      Yes, if, probably. I never made that assumption, but many people here seem to have.
      - icebraining 11y ago
        You made a categorical statement - "putting entries in the block chain is not a taxable transaction. As far as we can tell, that's wrong. It'd be different had you written "putting entries in the block chain isn't always a taxable transaction".
        jsprogrammer 11y ago
        What, specifically, is wrong about it? Taxes may apply to actual exchanges of goods and/or services, but there is no tax, save the "optional" miner fee, on making an entry in the blockchain.
dllthomas 11y ago
That is true only in the same way that physical cash is tax-free. Governments can still demand that you pay tax on your transactions; if the transactions are small enough and/or you are good enough about hiding them you may be able to avoid paying that tax (probably illegally).

cwyers 11y ago

Try telling the IRS that during an audit and see how long it takes for you to be in prison.

jsprogrammer 11y ago
Sorry, are you saying that every blockchain entry that is created needs to be reported to the IRS?
- adrianmacneil 11y ago
  If you live in the US, or are a US citizen, then yes, every bitcoin transaction you make should technically be reported to the IRS as capital gains/losses on your tax return.
  - dllthomas 11y ago
    Every bitcoin transaction you make involving accounts held by different entities, anyway.
- detaro 11y ago
  How would you even get the idea that this was the claim made? Your claim was that bitcoin transactions can't be taxed outside of mining fees, the negative of that is not "All bitcoin transactions have to be reported and taxed"
  - jsprogrammer 11y ago
    cwyers statement is the one that implies all bitcoin transactions have to be reported and taxed. Why would the IRS care about transactions that don't? The statement is only relevant to my comment if the IRS requires all transactions to be reported and taxed. Typically I assume replies to my comments are relevant. That is why I made the inference I did.
    - cwyers 11y ago
      That wasn't my implication, and a bunch of people around here have understood that, so I don't think it was a problem with me being unclear. You have to pay taxes on any Bitcoin transaction you would pay tax on if the same transaction was conducted in cash or gold or any other similar medium of exchange. Which contradicts your "if governments want to collect tax on Bitcoin transactions, they will need to run a mining farm" statement without being a blanket statement that every blockchain transaction needs to be taxed.
      - jsprogrammer 11y ago
        The tax is on the underlying physical exchange of goods or services, not on placing an entry in the blockchain.

vidarh 11y ago

This is only true if you are prepared to commit tax fraud, or if Bitcoin is not considered a taxable asset class in your jurisdiction. The chances of getting away with it may be decent depending on how you obtain and sell your BTC, but that does not make it any more legal than avoiding taxes on cash transactions you do that there's tax liabilities on.

jsprogrammer 11y ago
If you are making taxable transactions, that is for you to deal with the appropriate authorities. Putting entries in the block chain is not a taxable transaction anywhere that I am aware of, except that you may need to add an allotment for the miner to process your transaction.
- icebraining 11y ago
  That's like saying "signing a paper is not a taxable transaction" - if that paper is a transfer of property, it probably is a taxable event, and so would the entry in the blockchain probably be, if it's between address owned by different people.
  - jsprogrammer 11y ago
    Yes, if, probably. I never made that assumption, but many people here seem to have.
    - icebraining 11y ago
      You made a categorical statement - "putting entries in the block chain is not a taxable transaction. As far as we can tell, that's wrong. It'd be different had you written "putting entries in the block chain isn't always a taxable transaction".
      - jsprogrammer 11y ago
        What, specifically, is wrong about it? Taxes may apply to actual exchanges of goods and/or services, but there is no tax, save the "optional" miner fee, on making an entry in the blockchain.

dllthomas 11y ago

That is true only in the same way that physical cash is tax-free. Governments can still demand that you pay tax on your transactions; if the transactions are small enough and/or you are good enough about hiding them you may be able to avoid paying that tax (probably illegally).