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when you consider the ways that exist of converting BTC into your local currency, most of them have reporting rules for transactions and aggregates over a certa
by 300bps 13y ago
when you consider the ways that exist of converting BTC into your local currency, most of them have reporting rules for transactions and aggregates over a certain amount
I've bought most of my bitcoins from Craigslist handing cash to local bitcoin sellers.
Many people use https://localbitcoins.com/ https://localbitcoins.com/
There are definitely at least a few ways to buy and sell bitcoin without leaving a paper trail.
- otoburb 13y agoWouldn't that would work against you unless you cash out your gains slowly to avoid being flagged? I mean, if you have no proof of the OTC transaction, then on whichever amount the government tried to contest they may try to tax you on the full value of the coins at time of sale versus only taxing you on the (presumably positive) price delta.
- PeterisP 13y agoIf bitcoin becomes a large enough issue for IRS, then there's definitely at least a few ways for them to proceed. For example, they can subpoena localbitoins.com and such sites for all their user info, and do a full tax audit on them - after all, in taxes generally it's your problem to provide a paper trail for your taxable income/expenses, and if you can't do it, it only hurts you. For example, if you buy 1 bitcoin for $500 and sell for $800, you pay taxes on the $300 difference; but if you have no trail whatsoever for the $500 transaction, then tough luck, you'll be taxed on the whole $800. Oh, and that assumes that you did 'tax yourself' by properly declaring it; if you want them to tax you, then expect that to be tripled as a penalty; and if you're using any 'coin mixing' services then that smells like tax fraud which would move the pain from a few dollars to risk of prison. I'm not a tax lawyer, but you might need one.