3 ms·

Very nice rwinn! But I have a question. With the fast rise of bitcoins, lets say that I now have $10m worth of coins(I don't btw). How would I convert all to gb

by spants 14y ago

Very nice rwinn! But I have a question. With the fast rise of bitcoins, lets say that I now have $10m worth of coins(I don't btw). How would I convert all to gbp/usd and would the governments tax you?. With anti-money laundering controls in place in the uk, such a windfall would cause huge problems!

samratashok 14y ago
I would be interested in the answer.
andersaa 14y ago
You would trade them for gbp/usd on one of the exchanges. Mtgox.com is by far the biggest. As for tax, this is probably taxed as any other profit you make on buying and selling stuff, at least in my country (Norway). If I buy an art painting and sell it with a profit, I am obliged to inform on this on my tax sheet. And the same goes for bying/selling other currencies as well, but bitcoins are harder to track for the government (but not impossible).
vidyesh 14y ago
Well for starters, you can go crazy and start spending BTC ( bitcoins ) directly and buy stuff instead of encashing immediately. Coming back to if withdrawn in as local currecny. Income that is earned through the exchange of services with another person, whether in the form of bitcoins, any other currency or even barter; is included in gross income, and would be subject to income tax. So practically bitcoins could be subject to self employment tax if BTC is considered a commodity like gold. If considered as a currecny or a debt then the gained currency could be taxed based on market value at the end of each tax year. Also, IRS never conisders currency as long-term investement so if treated as another currency then it would be taxed as holding an account in any non-functional (foreign) currency. All this is just assuming its your owned BTC via trading/exchanging and not via business which accepts BTC or via selling items online or via mining. Edit : Forgot to answer your question "Where can I buy BTC?" Here are few reliable places https://mtgox.com/ https://mtgox.com/ https://coinbase.com/ https://coinbase.com/ https://bitbargain.co.uk/ https://bitbargain.co.uk/ https://bitfloor.com/ https://bitfloor.com/ https://www.bitcoin.de/ https://www.bitcoin.de/ https://btc-e.com/ https://btc-e.com/ https://www.bitstamp.net/ https://www.bitstamp.net/ https://blockchain.info/wallet/sms-phone-deposits https://blockchain.info/wallet/sms-phone-deposits ( Hybrid wallet + small exchange )
- rjtavares 14y ago
  > All this is just assuming its your owned BTC via trading/exchanging and not via business which accepts BTC or via selling items online or via mining. All of those would be taxable too. The only question is when: every year at their current market value, or when traded for (official) currency.
  - vidyesh 14y ago
    Yup it would be taxable I should have mentioned that. What I meant to say for businesses accepting BTC would have other and extra taxes apart from Income like Sales/Excise For miners I assume it would be either considered as a owned commodity or intagible personal property. I would assume just like any other commodity the current market value is considered if you have not traded in local currency. Also if you have bought BTC and sold to make some profit by trading, there would be commodity tax.
- khuey 14y ago
  Why would BTC gains be subject to self-employment tax? Surely they would be treated like other forex gains? Honestly if I had $10 million in BTC gains I'd get a tax professional and seek a private letter ruling from the IRS to clarify the situation. I imagine that misreporting $10 million of income would be an unpleasant experience.
eterm 14y ago
IANAL (or accountant) I'd imagine (in the UK at least) that they would be subject to capital gains tax.
arethuza 14y ago
As far as my understanding goes for the UK tax position - if you bought the Bitcoins then you purchased an asset and then sold it again thereby creating a capital gain on which CGT would be due when you do your tax return. You could try and avoid paying tax by simply not telling the Inland Revenue - but that would appear to be tax evasion. Not sure what the tax situation would be if you mined them - perhaps they would count as income? The only thing I'd be sure of is that if you did have $10m worth of coins in the UK then you'd be silly not to speak to an accountant who specialises in tax planning for individuals - excellent ones do exist!
jellicle 14y ago
> lets say that I now have $10m worth of coins(I don't btw). How would I convert all to gbp/usd You can't. You couldn't convert even a small slice of this amount without collapsing the market. It's simply too illiquid. > and would the governments tax you? You betcha.

by spants 14y ago

samratashok 14y ago

I would be interested in the answer.

andersaa 14y ago

You would trade them for gbp/usd on one of the exchanges. Mtgox.com is by far the biggest. As for tax, this is probably taxed as any other profit you make on buying and selling stuff, at least in my country (Norway). If I buy an art painting and sell it with a profit, I am obliged to inform on this on my tax sheet. And the same goes for bying/selling other currencies as well, but bitcoins are harder to track for the government (but not impossible).

vidyesh 14y ago

Well for starters, you can go crazy and start spending BTC ( bitcoins ) directly and buy stuff instead of encashing immediately. Coming back to if withdrawn in as local currecny. Income that is earned through the exchange of services with another person, whether in the form of bitcoins, any other currency or even barter; is included in gross income, and would be subject to income tax. So practically bitcoins could be subject to self employment tax if BTC is considered a commodity like gold. If considered as a currecny or a debt then the gained currency could be taxed based on market value at the end of each tax year. Also, IRS never conisders currency as long-term investement so if treated as another currency then it would be taxed as holding an account in any non-functional (foreign) currency. All this is just assuming its your owned BTC via trading/exchanging and not via business which accepts BTC or via selling items online or via mining. Edit : Forgot to answer your question "Where can I buy BTC?" Here are few reliable places https://mtgox.com/ https://mtgox.com/ https://coinbase.com/ https://coinbase.com/ https://bitbargain.co.uk/ https://bitbargain.co.uk/ https://bitfloor.com/ https://bitfloor.com/ https://www.bitcoin.de/ https://www.bitcoin.de/ https://btc-e.com/ https://btc-e.com/ https://www.bitstamp.net/ https://www.bitstamp.net/ https://blockchain.info/wallet/sms-phone-deposits https://blockchain.info/wallet/sms-phone-deposits ( Hybrid wallet + small exchange )

rjtavares 14y ago
> All this is just assuming its your owned BTC via trading/exchanging and not via business which accepts BTC or via selling items online or via mining. All of those would be taxable too. The only question is when: every year at their current market value, or when traded for (official) currency.
- vidyesh 14y ago
  Yup it would be taxable I should have mentioned that. What I meant to say for businesses accepting BTC would have other and extra taxes apart from Income like Sales/Excise For miners I assume it would be either considered as a owned commodity or intagible personal property. I would assume just like any other commodity the current market value is considered if you have not traded in local currency. Also if you have bought BTC and sold to make some profit by trading, there would be commodity tax.
khuey 14y ago
Why would BTC gains be subject to self-employment tax? Surely they would be treated like other forex gains? Honestly if I had $10 million in BTC gains I'd get a tax professional and seek a private letter ruling from the IRS to clarify the situation. I imagine that misreporting $10 million of income would be an unpleasant experience.

eterm 14y ago

IANAL (or accountant) I'd imagine (in the UK at least) that they would be subject to capital gains tax.

arethuza 14y ago

As far as my understanding goes for the UK tax position - if you bought the Bitcoins then you purchased an asset and then sold it again thereby creating a capital gain on which CGT would be due when you do your tax return. You could try and avoid paying tax by simply not telling the Inland Revenue - but that would appear to be tax evasion. Not sure what the tax situation would be if you mined them - perhaps they would count as income? The only thing I'd be sure of is that if you did have $10m worth of coins in the UK then you'd be silly not to speak to an accountant who specialises in tax planning for individuals - excellent ones do exist!

jellicle 14y ago

> lets say that I now have $10m worth of coins(I don't btw). How would I convert all to gbp/usd You can't. You couldn't convert even a small slice of this amount without collapsing the market. It's simply too illiquid. > and would the governments tax you? You betcha.