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I had to read up on structuring. Thank you for that. It's nice to have a term to search for when trying to understand a topic. What's still not clear to me is

I had to read up on structuring. Thank you for that. It's nice to have a term to search for when trying to understand a topic. What's still not clear to me is at what point does it become structuring. I've found plenty of obvious examples such as splitting two deposits of $8,000 into a bank after selling an item for $16,000. But what about someone who just buys their groceries and fills their vehicle up with gas with BTC that is worth much more than they paid for it years ago? Is it structuring if you're spending this money in multiple transactions that only add up to $1,000/month every month for the rest of your life? After reading up on a few structuring cases all, my conclusion is that there is no black & white rule on this & it is up to the prosecution to show that the accused knew that they were structuring & that it was illegal. If that's the case, I would assume the above example could be found guilty. Side note, I'm in no way able to benefit on this. I just have an interest in IRS rules and politics.

jdmichal 7y ago
If the spending is for clearly separate transactions, such as your example of shopping at different stores, then that seems like it would be fairly easy to defend. What would be problematic here is, say, buying a car with BTC in multiple "transactions", each of which is individually below the $200 gain threshold. It's really a single transaction taking place: BTC for a car. That could be interpreted as intentionally structuring the payments in a way that obviously works around the spirit of the proposed law.
ska 7y ago
IANAL or a tax accountant, but believe you have the right general idea except in most cases for tax (and some other financial) purposes the onus is on you to demonstrated that you did not structure transactions, not on them to demonstrate that you did. You are right that it is all a bit fuzzy because real life use is complicated. Exceptions on reporting like this are meant to make "normal life" transactions less burdensome. For example in general you have to report gains/losses made on foreign exchange, but typically countries have an allowance so that you don't have to calculate this every time you go on vacation. The proposed amendment would add virtual "currency" transactions to that.
- mattferderer 7y ago
  I'm 100% behind this being passed as I can't see digital currencies being useful as a US citizen with the current reporting requirements. At the same time, I also think this is an incredibly difficult policy to get right. I think structuring could become a common thing among those who have done well with digital currencies to either avoid taxes or purely out of convenience & without ill intent.

jdmichal 7y ago

If the spending is for clearly separate transactions, such as your example of shopping at different stores, then that seems like it would be fairly easy to defend. What would be problematic here is, say, buying a car with BTC in multiple "transactions", each of which is individually below the $200 gain threshold. It's really a single transaction taking place: BTC for a car. That could be interpreted as intentionally structuring the payments in a way that obviously works around the spirit of the proposed law.

ska 7y ago

IANAL or a tax accountant, but believe you have the right general idea except in most cases for tax (and some other financial) purposes the onus is on you to demonstrated that you did not structure transactions, not on them to demonstrate that you did. You are right that it is all a bit fuzzy because real life use is complicated. Exceptions on reporting like this are meant to make "normal life" transactions less burdensome. For example in general you have to report gains/losses made on foreign exchange, but typically countries have an allowance so that you don't have to calculate this every time you go on vacation. The proposed amendment would add virtual "currency" transactions to that.

mattferderer 7y ago
I'm 100% behind this being passed as I can't see digital currencies being useful as a US citizen with the current reporting requirements. At the same time, I also think this is an incredibly difficult policy to get right. I think structuring could become a common thing among those who have done well with digital currencies to either avoid taxes or purely out of convenience & without ill intent.