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You don’t disclose assets to the IRS, only income. If you disclose your income and pay tax on it then convert it to BTC today you aren’t obliged to disclose it.
by rubyfan 9y ago
You don’t disclose assets to the IRS, only income. If you disclose your income and pay tax on it then convert it to BTC today you aren’t obliged to disclose it. In theory after you sell it you’d have a capital gain to disclose.
- lstyls 9y agoNot true. There are reporting requirements for certain foreign assets, including cash in overseas accounts.
- rubyfan 9y agoDidn’t know, can you elaborate on that?
- lstyls 9y agoSorry for the delay! https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements https://www.irs.gov/businesses/comparison-of-form-8938-and-f...
- heimatau 9y agoDoesn't apply to crypto. Only have to report if the crypto is sold.
- krrrh 9y agoI guess the implication is that you have to report foreign assets specifically because it’s not easy for the IRS to obtain records from foreign financial institutions. Since it’s also not easy for them to obtain records from a decentralized crypto-currency then the same justification exists for adding these to a list of things you must report.
- em3rgent0rdr 9y agoThe law doesn't care whether the same justification exists. A bitcoin wallet in your house in US is not a foreign asset, since those bits (that representing private keys for bitcoin addresses) are physically in the US.
- krrrh 9y agoRight, the existing reporting law doesn’t pertain to assets stored decentralized “institutions” only foreign ones. Presumably that is why they are talking about changing the law.
- em3rgent0rdr 9y agoRight. Exactly. They'll have to change the law so that it does care about personal bitcoin wallets.
- heimatau 9y agoHow do implications work? Are there lawsuits that have set a precedence?
- krrrh 9y agoImplications can explain lawmakers actions and encourage said lawmakers to think about revisions to laws in the future. The article was about a proposed law. If X is similar to Y in some way, and X is treated by the law in a well-defined way, then a lawmaker might consider treating Y similar to how the law treats X.
- jimktrains2 9y agoPlease stop using crypto to mean cryptographic currency. Crypto has a well defined meaning.
- umanwizard 9y agoWords can mean different things and in this case the meaning is obvious from the context.
- heimatau 9y agoFair but context implies I mean CC, as another mentioned. Meaning, devoid of context, is difficult to create. So, please, keep this in mind when you're nit-picking on what you mean.
- akvadrako 9y agoNo, you stop using crypto. This is a terrible language abuse; I don't know how you can defend it.
- bfuller 9y agoRegardless of what your opinion is, using the word crypto to mean crypto currency is already in common use, you can't argue against that. The collective unconscious decides the meanings of words. Language evolves. I guess the world looks pretty different all the way up on your high horse. This is a battle you have already lost but for some reason insist on continuing to lose.
- jimktrains2 9y agoI really wouldn't call it common usage. Among people who use crypto currency, sure, but not among others.
- dang 9y agoLanguage certainly evolves, and personal attacks will get your account banned on HN. Please keep these things separate and edit the latter out of your comments here, regardless of how bad someone else's comment may be. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html
- em3rgent0rdr 9y agooperative word: "foreign". But your bitcoin wallet can exist entirely in US.
- Taniwha 9y agoYes, but where does the blockchain exist?
- Tyrannosaur 9y ago...on my hard drive? If I am running a node, that is.
- Taniwha 9y agoAnd so it may be bound by your country's laws, and by the laws of all the other countries where it also exists on hard drives, even if they are contradictory, it's potentially a legal nightmare. The current official bitcoin position on this appears to be to stick one's fingers in one's ears an go "La la la I can't hear you"
- rubyfan 9y agoIf I pay taxes on my income earned in USD, then exchange it for Euros. If the Euros had a better exchange rate to dollars later, would I have to declare a capital gain if I exchange back for USD? What if instead of exchanging I just spent the Euros?
- jaycroft 9y agoIf you are a US citizen, then yes to both questions. Trading any asset for another (which would include spending EUR for goods) creates a taxable event, on which you must declare your gain on the sold asset based on its fair market value at the time of exchange. There are exemptions for certain types of property (notably section 1031 like kind exchanges for real property). I am not a tax attorney, and more specifically not your tax attorney, nor a certified accountant. https://www.law.cornell.edu/uscode/text/26 https://www.law.cornell.edu/uscode/text/26