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The government would have to consider Bitcoins as a currency for it to be taxed like a currency. Right now it has no status identified for legal purposes so no
by gsharon 13y ago
The government would have to consider Bitcoins as a currency for it to be taxed like a currency. Right now it has no status identified for legal purposes so no way to tax it.
I am sure that several governments are looking in to it as we speak. Death and taxes
- deleted 13y ago[deleted]
- raverbashing 13y agoI don't think that's how it works. Tax over selling a property are not dependent on the property (ok, it depends sometimes, like real estate) but in principle they exist regardless of the nature of the property.
- steven2012 13y agoThe government can tax anything it wants. For example, barter exchanges are taxable by the government, even if no actual money changed hands. They would just put a dollar figure on the barter, and then tax it accordingly. Bitcoin doesn't have to be a currency in order for the government to tax any gains made on its sale or transfer.
- Blue_Hole 13y agoGovernment can tax anything they want. Even the babysitter and making change from a stranger.
- logfromblammo 13y agoAttempting to strictly enforce tax on such transactions would probably cost more than any revenue generated.
- penguindev 13y ago... and the government cares about that why?
- logfromblammo 13y agoGood point. If they outsourced the enforcement to a private contractor, the contractor could charge the government 10 times the actual operating expenses, keep any tax actually collected as an incentive bonus, and their employees would be underpaid with worthless benefits, so they will be constantly surly and take out their frustrations on the filthy tax evading scum. There's no downside!
- id_ris 13y agoThe IRS purposely keeps the definition of income loosely defined so that they can broadly apply it as new schemes and technologies arise. I am sure the IRS could bust you for income tax evasion if you didn't declare your bitcoin appreciation as income.
- saraid216 13y agoOddly enough, the pioneers on this subject are actually game currencies. Look up Julian Dibbell's Play Money.
- seanmcdirmid 13y agoYou would have to declare income at sale on a difference between bought and sold prices. You wouldn't have to declare appreciation as long as you were just holding.
- logfromblammo 13y agoI am sure the IRS could bust you for tax evasion even if you were the world's only completely honest person. The tax code is so needlessly complex that there is always some hidden land mine that could be used to nail you to the wall. Just don't reveal your Bitcoin activities to the authorities, purposefully or accidentally, and they will never find any reason for their flagging algorithm to elevate your account to human scrutiny. Nor will they have evidence that could be used against you. Anything passing through an exchange that follows state banking rules might get you into trouble, but you don't necessarily need to use an exchange to turn BTC into USD.
- drakaal 13y agoNot even close. Anytime you buy low and sell high you owe taxes on the difference. This applies to everything from antiques to livestock. It doesn't matter if the stuff is tangible or imaginary. You would owe taxes for mining World Of Warcraft coins if you sell them. You would owe taxes for picking up cans off of the street and recycling. How much you owe can change with how you earned the money, but if you earned money you owe taxes. Only two things in life are certain. Taxes is one of them.
- geoka9 13y agoWhat if you buy high and sell low. Can you write off the losses for tax purposes?
- breischl 13y agoYes, it's called a capital loss. A loss can be used to offset an equal amount of capital gain, or a small amount (up to $1500/year) of earned income. http://www.irs.gov/uac/Ten-Important-Facts-About-Capital-Gains-and-Losses http://www.irs.gov/uac/Ten-Important-Facts-About-Capital-Gai...
- penguindev 13y agoIt also doesn't matter if what you own only went 'up' in value due to inflation, thus you're in fact taxed just for living. And they say we have a free country.
- Guvante 13y agoGains on Bitcoins realized are totally taxable. (i.e. you have more cash than you put in) The only special laws are relaxations to the normal tax rate.