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No, this is not the case. For foreign currency there is a low-value transaction exemption. If you go on vacation in Italy you don’t have to report forex income/
by garmaine 7y ago
No, this is not the case. For foreign currency there is a low-value transaction exemption. If you go on vacation in Italy you don’t have to report forex income/loss for every meal. But if you came back with an Italian sports car, you would.
Not so with bitcoin, which the IRS taxes every transaction, no matter how small.
- wpietri 7y agoI think the reasonable justification for the low-value exemption for foreign currencies is that it's a) a common consumer use case, and b) hard to account for. Neither applies to Bitcoin. Not only is Bitcoin a failure for typical consumer use [1], but its digital-from-the-start nature means that the accounting burden is much lower. [1] https://avc.com/2017/08/store-of-value-vs-payment-system/ https://avc.com/2017/08/store-of-value-vs-payment-system/
- garmaine 7y agoLightning transactions are both low friction enough for consumers to use, and inherently ephemeral.
- wpietri 7y agoIf somebody has designed a digital system to throw away data instead of recording it, that doesn't excuse them from recording it when needed for tax reasons. And I understand that in cryptocurrency land there's always a future thing that people will use. Wake me when that happens, as 10 years in I've stopped holding my breath. Especially since, as I said upthread, other technologies in the same period have found widespread adoption.