8 ms·

Found a heap of BTC. What do I do?

26 points by kevinmannix 9y ago

warsharks 9y ago
surely you can just cash them in, as far as im aware no one has been done for legitimately owning and selling bitcoin, i could be wrong of course and i have no idea about the US tax system. i dont think it would exactly be fair to punish anyone for doing it, its not like people get taught what to do if a life changing amount of cash came their way. if it were me id have cashed em in already and be flying off on holiday! (well you could just do that with bitcoin of course) also maybe consider saving some, the investment has paid off so far why not let it ride? (not all of it of course)
georgeecollins 9y ago
I don't know how the top answer said there are no strict rules for bitcoin. I edited that, but in case it gets edited back: https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidan... In this case it would be subject to capital gains tax.
0xbear 9y ago
Hire an accountant to walk you through the tax implications. If this is taxed as income you could benefit from unloading it gradually. Once you unload it, do the following things: 1. Pay off your high interest debts (don't pay off mortgage - it's nearly always a bad idea once you run the numbers) 2. Put the rest into a super low cost Vanguard s&p500 fund or etf like VOO or VFIAX and forget about it for the next 30 years. 3. Retire in style.
- Sleeep 9y ago
  No need to hire an accountant, the IRS treats Bitcoin as property, so it would be capital gains tax at sale, not income. There's very good reasons to pay off the mortgage, it certainly is not "nearly always a bad idea." If you were given a house free and clear would you immediately take out a mortgage on the house? Once you pay off your current mortgage are you planning on immediately taking out a second one? We don't know a thing about this person's finances so we can't advise either way. The feeling of having no debt is amazing and that sort of emotional security can't just be discounted. Finances are just as much about emotion as they are about cold hard numbers. Of course, everyone is different. "But you can get a higher return in the market," you say. You can also lose money in the market, too. It's a great idea in a bull market but a terrible idea in a bear market. If you have a time machine you'd already be filthy rich. Many people think equities are overpriced right now and we are heading for a correction. "But mortgage interest is tax deductible," you say. Only if you itemize and not everyone itemizes and interest on a margin loan is tax deductible too. Some people may not want to retire at all and if they did why should they wait 30 year, specifically, if they want to retire? The poster didn't give his or her age so he or she might already be retired or is approaching retirement age. They may be younger but with significant assets. A million dollar windfall is enough for me to retire on right now.
  - 0xbear 9y ago
    Paying off mortgage gets you off the hook from 4.16% per year in interest. S&P (in the form of VOO) is up 18% YoY. Do the math. The feeling of not having debt, you can have that if you have enough liquidity to pay off your mortgage if money can't be put to better use elsewhere. I hire accountant to do my taxes and save thousands of dollars every year over what I'd pay if I used turbotax. That's why I recommend hiring one once you venture into high six figures and up.
    - soccerdave 9y ago
      Genuinely curious as a TurboTax user, what are some of the ways your accountant has helped you save money on taxes that you would have missed on TurboTax?
      - 0xbear 9y ago
        More detailed handling of stock compensation mostly. I was also able to recover a ton of money overpaid in previous years. You have to understand that the primary goal of TT is not to save you the maximum amount of money. It is to be both "good enough" for most users and to not underestimate. Overestimating is OK, it's not their money after all, and you can hire an accountant if you don't like the result (as I did). Underestimating could destroy them financially.
    - Sleeep 9y ago
      Once again, paying off your mortgage is 100% guaranteed returns, investing in the stock market not only is not guaranteed to be over 4%, you can lose a significant amount of money. Need I remind you that the S&P 500 dropped around ~50% between 2007-2009? Here's the math: +number > -number. Equities are currently overprice. I'm not saying don't buy them at all, but expect a correction in the near future. If not holding a mortgage is a "bad idea," then by that logic you should immediately take one out if you don't already have one. Do you plan on taking out another mortgage once yours is paid off? Would you take out a mortgage on a home you own free and clear? Do you buy stocks on margin? Do you take out personal loans to put in the stock market? Do you have a home equity line of credit that you use to put in the market? Why or why not? I mean, if you're expecting 18% returns, there's a thousand ways you can borrow money cheaper than that. Everyone's situation is different so making blanket statements isn't appropriate. I'm not saying that they should immediately pay off the mortgage, I'm disagreeing that paying off the mortgage is a "always a bad idea."
runamok 9y ago
Most importantly backup that hard drive!
- sumedh 9y ago
  and don't forget to take a backup of the backup.
cmaxwell 9y ago
With the impending split I would probably sell it all now and deal with the consequences of that later because they might be worth significantly less by the end of the month.
jamestimmins 9y ago
If OP is the individual who asked the original question, this may be a case of closing the barn door after the horse has already run away, but it's probably unwise to post under a real name or a frequently-used pseudonym. I suspect people have been targeted for far less $$/btc than this.
nodesocket 9y ago
I'm sorry, but I'm extremely skeptical of this. All too often people on the internet like to lie just to generate buzz or troll. This smells of BS. Similar: "I found 400 bitcoin on a thumb drive laying on the street in Manhattan. What should I do?"
- droidist2 9y ago
  Brag about it on the internet in question form
sunstone 9y ago
Melt them down for the gold.

26 points by kevinmannix 9y ago

surely you can just cash them in, as far as im aware no one has been done for legitimately owning and selling bitcoin, i could be wrong of course and i have no idea about the US tax system. i dont think it would exactly be fair to punish anyone for doing it, its not like people get taught what to do if a life changing amount of cash came their way. if it were me id have cashed em in already and be flying off on holiday! (well you could just do that with bitcoin of course) also maybe consider saving some, the investment has paid off so far why not let it ride? (not all of it of course)

georgeecollins 9y ago

I don't know how the top answer said there are no strict rules for bitcoin. I edited that, but in case it gets edited back: https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidan... In this case it would be subject to capital gains tax.

0xbear 9y ago

Hire an accountant to walk you through the tax implications. If this is taxed as income you could benefit from unloading it gradually. Once you unload it, do the following things: 1. Pay off your high interest debts (don't pay off mortgage - it's nearly always a bad idea once you run the numbers) 2. Put the rest into a super low cost Vanguard s&p500 fund or etf like VOO or VFIAX and forget about it for the next 30 years. 3. Retire in style.

Sleeep 9y ago
No need to hire an accountant, the IRS treats Bitcoin as property, so it would be capital gains tax at sale, not income. There's very good reasons to pay off the mortgage, it certainly is not "nearly always a bad idea." If you were given a house free and clear would you immediately take out a mortgage on the house? Once you pay off your current mortgage are you planning on immediately taking out a second one? We don't know a thing about this person's finances so we can't advise either way. The feeling of having no debt is amazing and that sort of emotional security can't just be discounted. Finances are just as much about emotion as they are about cold hard numbers. Of course, everyone is different. "But you can get a higher return in the market," you say. You can also lose money in the market, too. It's a great idea in a bull market but a terrible idea in a bear market. If you have a time machine you'd already be filthy rich. Many people think equities are overpriced right now and we are heading for a correction. "But mortgage interest is tax deductible," you say. Only if you itemize and not everyone itemizes and interest on a margin loan is tax deductible too. Some people may not want to retire at all and if they did why should they wait 30 year, specifically, if they want to retire? The poster didn't give his or her age so he or she might already be retired or is approaching retirement age. They may be younger but with significant assets. A million dollar windfall is enough for me to retire on right now.
- 0xbear 9y ago
  Paying off mortgage gets you off the hook from 4.16% per year in interest. S&P (in the form of VOO) is up 18% YoY. Do the math. The feeling of not having debt, you can have that if you have enough liquidity to pay off your mortgage if money can't be put to better use elsewhere. I hire accountant to do my taxes and save thousands of dollars every year over what I'd pay if I used turbotax. That's why I recommend hiring one once you venture into high six figures and up.
  - soccerdave 9y ago
    Genuinely curious as a TurboTax user, what are some of the ways your accountant has helped you save money on taxes that you would have missed on TurboTax?
    - 0xbear 9y ago
      More detailed handling of stock compensation mostly. I was also able to recover a ton of money overpaid in previous years. You have to understand that the primary goal of TT is not to save you the maximum amount of money. It is to be both "good enough" for most users and to not underestimate. Overestimating is OK, it's not their money after all, and you can hire an accountant if you don't like the result (as I did). Underestimating could destroy them financially.
  - Sleeep 9y ago
    Once again, paying off your mortgage is 100% guaranteed returns, investing in the stock market not only is not guaranteed to be over 4%, you can lose a significant amount of money. Need I remind you that the S&P 500 dropped around ~50% between 2007-2009? Here's the math: +number > -number. Equities are currently overprice. I'm not saying don't buy them at all, but expect a correction in the near future. If not holding a mortgage is a "bad idea," then by that logic you should immediately take one out if you don't already have one. Do you plan on taking out another mortgage once yours is paid off? Would you take out a mortgage on a home you own free and clear? Do you buy stocks on margin? Do you take out personal loans to put in the stock market? Do you have a home equity line of credit that you use to put in the market? Why or why not? I mean, if you're expecting 18% returns, there's a thousand ways you can borrow money cheaper than that. Everyone's situation is different so making blanket statements isn't appropriate. I'm not saying that they should immediately pay off the mortgage, I'm disagreeing that paying off the mortgage is a "always a bad idea."

runamok 9y ago

Most importantly backup that hard drive!

sumedh 9y ago
and don't forget to take a backup of the backup.

cmaxwell 9y ago

With the impending split I would probably sell it all now and deal with the consequences of that later because they might be worth significantly less by the end of the month.

jamestimmins 9y ago

If OP is the individual who asked the original question, this may be a case of closing the barn door after the horse has already run away, but it's probably unwise to post under a real name or a frequently-used pseudonym. I suspect people have been targeted for far less $$/btc than this.

nodesocket 9y ago

I'm sorry, but I'm extremely skeptical of this. All too often people on the internet like to lie just to generate buzz or troll. This smells of BS. Similar: "I found 400 bitcoin on a thumb drive laying on the street in Manhattan. What should I do?"

droidist2 9y ago
Brag about it on the internet in question form

sunstone 9y ago

Melt them down for the gold.