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The 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
by steven2012 13y ago
The 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.