4 ms·

I offer no actual reply, only a thought experiment, keeping in mind that the USD is another floating currency that fluctuates in value: ... " Is there a tax g

by mapt 13y ago

I offer no actual reply, only a thought experiment, keeping in mind that the USD is another floating currency that fluctuates in value: ... " Is there a tax guide that would explain the consequences of me using some of the US Dollars I traded for in 2013 to buy an item on overstock this month? As I understand it I would have to record the value I paid for the US Dollars in 2013, calculate the value it appreciated between when I bought it and the amount I am using to buy the item. And then report this as capital gains on my 2014 tax return? This sucks, this makes using US Dollars a lot more work than just paying with a credit card. Plus, it might mean having to hire an accountant instead of just using turbo tax? "

natrius 13y ago
Except there are many statutes that give the dollar special tax treatment.
- scoofy 13y ago
  This. People keep thinking that bitcoin is a currency. It's not. It's best thought of as a commodity, in the same way that all foreign currencies are essentially commodities, and using them to pay for things is bartering and capital gains laws apply.
  - bunderbunder 13y ago
    Sort of. The US tax code provides some special provisions[1] that are meant to make life easier for people making smaller transactions in foreign currency. IANAL, but if I had to hazard a wild guess, for the purposes of the statute in question "foreign currency" is defined as the official currency of a sovereign nation that is not the USA. With BTC not being controlled by any country that would imply that for the purposes of tax law it is just another commodity - but something like the Euro is not. [1]: See section (e) at http://www.law.cornell.edu/uscode/text/26/988 http://www.law.cornell.edu/uscode/text/26/988
    - mapt 13y ago
      Would this change if a small, minimally developed sovereign nation adopted Bitcoin as its official currency, as opposed to the US Dollar or the Euro or a local currency that is not capable of earning much seigniorage per year?
      - politician 13y ago
        Just like how Sealand's hosting of the Pirate Bay made copyright infringement globally palatable? No, probably not. But thanks for reminding me of the word seigniorage, I'd been looking for it actually.
deleted 13y ago
[deleted]
IgorPartola 13y ago
What others have replied to you. Also, if you are trading USD, then another currency must be involved. For example, if you live in the US and trade USD for the Euro and back, then any time you get more USD back you do pay capital gains tax. Except, you pay the IRS and Overstock.com in USD, so the purchase there does not automatically trigger a trade of international currency. Another possibility is that you live in let's say France and you are trading Euro to USD and back. Now you don't owe any taxes to the US, but you do owe French taxes (whatever the laws are there for capital gains). In either case you owe someone taxes.
woah 13y ago
Big advantage of the dollar is you can use it to keep the IRS from throwing you in jail.

by mapt 13y ago

natrius 13y ago

Except there are many statutes that give the dollar special tax treatment.

scoofy 13y ago
This. People keep thinking that bitcoin is a currency. It's not. It's best thought of as a commodity, in the same way that all foreign currencies are essentially commodities, and using them to pay for things is bartering and capital gains laws apply.
- bunderbunder 13y ago
  Sort of. The US tax code provides some special provisions[1] that are meant to make life easier for people making smaller transactions in foreign currency. IANAL, but if I had to hazard a wild guess, for the purposes of the statute in question "foreign currency" is defined as the official currency of a sovereign nation that is not the USA. With BTC not being controlled by any country that would imply that for the purposes of tax law it is just another commodity - but something like the Euro is not. [1]: See section (e) at http://www.law.cornell.edu/uscode/text/26/988 http://www.law.cornell.edu/uscode/text/26/988
  - mapt 13y ago
    Would this change if a small, minimally developed sovereign nation adopted Bitcoin as its official currency, as opposed to the US Dollar or the Euro or a local currency that is not capable of earning much seigniorage per year?
    - politician 13y ago
      Just like how Sealand's hosting of the Pirate Bay made copyright infringement globally palatable? No, probably not. But thanks for reminding me of the word seigniorage, I'd been looking for it actually.

deleted 13y ago

[deleted]

IgorPartola 13y ago

What others have replied to you. Also, if you are trading USD, then another currency must be involved. For example, if you live in the US and trade USD for the Euro and back, then any time you get more USD back you do pay capital gains tax. Except, you pay the IRS and Overstock.com in USD, so the purchase there does not automatically trigger a trade of international currency. Another possibility is that you live in let's say France and you are trading Euro to USD and back. Now you don't owe any taxes to the US, but you do owe French taxes (whatever the laws are there for capital gains). In either case you owe someone taxes.

woah 13y ago

Big advantage of the dollar is you can use it to keep the IRS from throwing you in jail.