4 ms·

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 Coming back to if withdrawn in

by 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 Coming back to if withdrawn in as local currecny.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.

by vidyesh 14y ago

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.