America's IRS Wants Cryptocurrency Exchanges Declared on Tax Forms (morningstar.com) 100
America's dreaded tax-collecting agency is sending "a strong warning to millions of crypto holders who aren't complying with the law that they must file required forms," reports the Wall Street Journal. The front page of this year's tax forms — just below "Name" and "Address" — will ask filers to declare whether they've received or exchanged any virtual currencies.
The Journal calls it "setting a trap for cryptocurrency tax cheats." "This placement is unprecedented and will make it easier for the IRS to win cases against taxpayers who check 'No' when they should check 'Yes, '" says Ed Zollars, a CPA with Kaplan Financial Education who updates tax professionals on legal developments... The change to the crypto question and other recent actions show the IRS is taking cryptocurrencies seriously as a threat to the tax system, whether the noncompliance is by enthusiasts who owe little or by sophisticated international criminals. In two recent nontax criminal cases — one involving theft by North Korea and the other involving the sale of child pornography by a Dutch national — the IRS has provided key assistance because of its growing expertise in cryptocurrencies....
For their part, many crypto users are angry with the IRS's guidance, which treats bitcoin, ether and their kin as property rather than currency. So if a crypto holder uses it to buy something or exchanges one cryptocurrency for another, there's usually a capital gain or loss to report on the tax return. "Buying a sandwich with cryptocurrency shouldn't be a taxable event," says Sean Cover, a New York City cryptocurrency holder who works in finance for a nonprofit group. He says that in 2017 he had more than 500 transactions on several platforms, and it took him 10 hours to prepare his crypto tax forms even though he paid for special software. Like some members of Congress, Mr. Cover supports a $200 threshold before crypto transactions would need to be reported. The IRS says it's up to Congress to change the law....
Meanwhile, the IRS is forging ahead with other crypto compliance measures. Earlier this month, it offered rewards up to $625,000 to code-breakers who can crack so-called privacy coins like Monero that attract illicit activity because they claim to be untraceable... The IRS is also sending a new round of letters to crypto holders who may not have complied with the tax rules, expanding on last year's mailing of about 10,000 letters. Tax specialists say the recipients are often customers of Coinbase, which was ordered by a federal court to turn over information on some accounts to the IRS.
The Journal calls it "setting a trap for cryptocurrency tax cheats." "This placement is unprecedented and will make it easier for the IRS to win cases against taxpayers who check 'No' when they should check 'Yes, '" says Ed Zollars, a CPA with Kaplan Financial Education who updates tax professionals on legal developments... The change to the crypto question and other recent actions show the IRS is taking cryptocurrencies seriously as a threat to the tax system, whether the noncompliance is by enthusiasts who owe little or by sophisticated international criminals. In two recent nontax criminal cases — one involving theft by North Korea and the other involving the sale of child pornography by a Dutch national — the IRS has provided key assistance because of its growing expertise in cryptocurrencies....
For their part, many crypto users are angry with the IRS's guidance, which treats bitcoin, ether and their kin as property rather than currency. So if a crypto holder uses it to buy something or exchanges one cryptocurrency for another, there's usually a capital gain or loss to report on the tax return. "Buying a sandwich with cryptocurrency shouldn't be a taxable event," says Sean Cover, a New York City cryptocurrency holder who works in finance for a nonprofit group. He says that in 2017 he had more than 500 transactions on several platforms, and it took him 10 hours to prepare his crypto tax forms even though he paid for special software. Like some members of Congress, Mr. Cover supports a $200 threshold before crypto transactions would need to be reported. The IRS says it's up to Congress to change the law....
Meanwhile, the IRS is forging ahead with other crypto compliance measures. Earlier this month, it offered rewards up to $625,000 to code-breakers who can crack so-called privacy coins like Monero that attract illicit activity because they claim to be untraceable... The IRS is also sending a new round of letters to crypto holders who may not have complied with the tax rules, expanding on last year's mailing of about 10,000 letters. Tax specialists say the recipients are often customers of Coinbase, which was ordered by a federal court to turn over information on some accounts to the IRS.
Re:END THE IRS! (Score:4, Informative)
Don't worry, we were assured that when the 16th Amendment was passed that 'income' did not include 'wages' and that the tax would only be on passive and ownership income and only on the wealthiest Americans and capped at 3.5%.
This is why textualists suck - redefining words is the easiest way to exert unearned power. Orwell nailed that one.
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My God, it's Full of Source!
STARLINK IS COMING
Astronomers, looking up at the night sky: "My God, it's full of Starlinks."
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Re:END THE IRS! (Score:5, Informative)
Remember when we were promised that the "alternative minimum tax" would only ever affect rich people clever enough to reduce their taxes while complying with all the existing rules?
-jcr
Blame Congress for that one. The IRS works for Congress - I wish people would realize that.
And what sucks about Congress, instead of fixing thing - like the actual law - they add MORE laws on top.
So, instead of fixing the laws on deductions (exemptions were removed in Dec, 2017), they just pile on more laws as a band-aid. Why? Because Congress does not understand the tax laws.
We have the most Byzantine tax code on Earth. A. tax industry that has a vested interest in keeping the system. Years ago, Democrats put forth a bill to have the IRS fill out forms for us.(2013) [accountingtoday.com] Basically: You agree - sign it. You do not - file.
The tax preparation industry: Intuit, H&R Block, Liberty, etc ... went to Congress (Republican Controlled) and said, Look what Obama wants! (2009) [cnbc.com]
And ....here we are. With the old 1040 chopped up into a card and six schedules. BFD.
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The IRS has lobbied for decades to simplify the tax code. The code is so complex than can't implement it or audit it and that mostly screws over power people helping the super rich.
That's not really true (Score:3)
Re:END THE IRS! (Score:5, Insightful)
And how should you fund public services and infrastructure? Or are you preferring to tax something else than income to pay for this? Or perhaps even saying that there should be no public services or infrastructure? Please clarify, because "END THE IRS" doesn't begin to explain how you want a modern society to work.
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That's true. Of course, during that time the federal government complied with Article I and the 10th amendment, so it was much, much smaller. The majority of government was by the states and towns, which assessed property tax of about 1% and a head tax of equal to about $10/year/person in today's dollars.
Today, the states still provide most of the useful services you first think of - police, fire department, roads, etc, while the Washington gets most of the tax money.
This chart is interesting:
https://en.w [wikipedia.org]
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However, you still have the question of what to do with social security, medicare/medicaid, and military spending, which combined are the vast majority of government spending.
People aren't going to like it if you shut down social security.
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I wouldn't mind if social security were shutdown as long as they returned the moneys I've paid into it and I could put those funds into my controlled balanced retirement accounts.
I have no illusion that SS will be near bankrupt by the time I retire.
Funny thing, that's a revenue source, not an expen (Score:3)
Indeed you do. The largest, at 38% of the federal budget, is social security. Weird thing is that while it's listed as the largest *expense*, it's actually a *revenue source* for the federal government. The government takes in social security taxes and then spends the money on everything else, including Medicare. Which suggests an obvious solution which preserves the social security benefits at current levels while slashing the tax rate.
The federal government takes your social security money your whole
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Note that for this to be very safe, you're going to keep putting in money every paycheck, just like you do with social security (though it costs you a lot less). When you retire, you get money out consistently every month. That makes it impossible to end up buying when the investment is high and selling when it's low. You put in EVERY month. Which automatically means you get in at the best possible time - you get in at every time.
In fact, because you're putting in the same number of *dollarsz month, yo
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Let's say the investment goes badly. Let's say you put $250/month, so your expected total after 40 years is $2.8 million. BUT the country has 40 years of bad luck, so you only end up with half of that. That's only $1.4 million.
That's more than three times as much as you'd get from social security for the same investment.
And guess what - if the economy were in the shitter for forty years straight, your social security is going to be worse than you expected too.
Oops, calculated wrong (Score:4, Interesting)
Oops, I double-counted something in my head. Let's try that again with correct numbers:
Let's say the investment goes badly. Let's say you put $250/month, so your expected total after 40 years is $1.4 million. BUT the country has 40 years of bad luck, so you only end up with half of that. That's only $700K.
That's nearly twice as much as you'd get from social security for the same investment.
And guess what - if the economy were in the shitter for forty years straight, your social security is going to be worse than you expected too.
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I would think you would replace the current social security "investment" (rip off) with a good investment strategy. So you wouldn't HAVE "people who get unlucky and don't have a good investment strategy".
The details of how that intersects with freedom could go lots of ways. One way would be similar to we do financial responsibility laws for drivers. You're required to buy insurance unless and until you have significant funds to self-insure. Perhaps it could be that you have to participate in the "normal"
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Again, what do you do about the folks who won't or can't "play into the system". Ultimately, we will have to deal with them, regardless the system. As always.
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Good morning, sysrammer. I see you commented on four of my posts. :)
At first I was thinking that covering for people who never worked much is orthogonal to whether you invest it at 2.5% or 10%. Then it occurred to me, it's a lot easier to cover for somebody else when have $2.8 million than when you have $400K.
That is, currently your contributions are loaned out to Congress to spend and Congress pays social security back at a 2.5% interest rate. At 2.5%, they'll grow to $400K. Social security than has tha
Re: Funny thing, that's a revenue source, not an e (Score:2)
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Social security is mandatory, your own private investments are not...
If not forced to invest, a lot of people just don't bother, or invest poorly, then they end up with nothing come retirement.
Your system only works if people are sensible, which a lot aren't.
Right, so combining those two attributes (Score:3)
Yep. People, including myself, often make decisions based on short-term rather than long-term, and that's 90% of the decisions we regret.
Social security is mandatory and is a rip-off.
Investing is a great idea and is optional.
Perhaps what we need is mandatory investment of some kind.
A step in that direction which preserves freedom is to have the 401k plans opt-out rather than opt-in - by default all employees have investments which grow, unless they actively choose not to.
By the way, if you haven't thought
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"People aren't going to like it if you shut down social security"?
You mean, like what provides my personal healthcare, and pays my rent?
You think that the ultrawealthy "deserve" to be rich, and the rest of us to die under bridges? Why do you think that's a "good" thing? Do you imagine that you live in the Old Wild West?
We live in a SOCIETY. Which provides things like roads (you want your taxes increased by states and cities and counties, or do you want roads to turn into dirt trails?
You not only don't unde
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We live in a SOCIETY. Which provides things like roads (you want your taxes increased by states and cities and counties, or do you want roads to turn into dirt trails?
If you depend on government assistance for rent, you're not the one paying for roads.
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You are a brainwashed wrong-wing libertidiot.
Among the many, many things wrong with everything you believe, a) I paid taxes for many years, and b) you obviously seem to be TOO STUPID to know that pople on social security PAY TAXES.
Re: END THE IRS! (Score:2)
Re:END THE IRS! (Score:5, Insightful)
Our republic did just fine for the first century of its existence with the federal government limited to collecting customs duties.
-jcr
And the size of the military back then was?
Aid to farmers was?
And the entities to regulate robber barons were?
The entity to keep companies from putting rat shit into sausages was? Or to keep people from selling medicine that was nothing or poison?
And the endless and quick cycles from boom to bust was smoothed out by? Private Wall Street Banks when JP Morgan had his power. Private sector - but ONE man had the power to control the US economy.
And help received when people were starving when the economy crashed was?
Those were rhetorical questions obviously and I could go on and on and on, but I do not know about you, I would NEVER want to go back.
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Did the foreigners have aircraft and nukes then?
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Marx is to economics as Lysenko is to biology.
Oops, you have a typo.. Let me fix that for you:
Ayn Rand is to economics as Lysenko is to biology.
Re: END THE IRS! (Score:4, Insightful)
What you call "robber barons", I call entrepreneurs who brought unprecedented value to their customers.
These are people who essentially forced starving children to work in sweatshops for pennies a day and hired pinkerton thugs to assault protesting laborers. You are either a callous prick or a moron with no understanding of history. Maybe both.
Great Depression of 1920? (Score:4, Interesting)
Yah see, I guess I have to come out and say it, we need regulation. There is no way around it. Free markets are just too volatile.
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And the entities to regulate robber barons were?
What you call "robber barons", I call entrepreneurs who brought unprecedented value to their customers.
Thank you for proving that you are nothing but an internet troll not worth engaging.
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"And the endless and quick cycles from boom to bust was smoothed out by?"
No one, just like now.
Crash of '87; dot com bubble; dot com crash; housing boom, Great Financial Crisis; COVID crash or whatever we end up calling this.
The rest of your argument is pretty good. The regulatory part of the government isn't all that expensive to run.
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Why do you say that?
I think having a highway system, regulated radio spectrum, air traffic control, a patent system, research labs, a court system etc have been pretty useful.
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No, it didn't sound clever, nor did I mean it to. Why do you feel that a post needs to be clever?
It was your proposal sounded truly and utterly ridiculous in my ears, but please enlighten me:
Tell me what was so wonderful with that first century that you want to return to.
I think hdyoung [slashdot.org] is spot on. It is easy to find some by-gone era rose colored and get all nostalgic, but I bet that ANYONE living at that time would trade places with you in the blink of an eye.
Actually, I am of the opposite stance, that t
Re:END THE IRS! (Score:4, Insightful)
No regulations. Yay, a libertarian wet dream. Want to buy food from someone else? You better trust them because there could be anything in there. Get medicine from the doctor? No guarantees it'll actually do anything except a pinky-swear. The words "public services" don't exist. Victim of a crime? Unless you're a wealthy white dude, take care of it yourself. House burning down? Go get some water from the river, lazy bones, that's your problem. Fall and break your leg? Scream for help and hope someone who cares is close by. Though you're probably better dying in that ditch than subjecting yourself to the "doctor" who doesn't have a license and probably didn't get any formal medical training.
But, hey, taxes were low. Let's totally go back to that. It'll be great. You first.
Re:END THE IRS! (Score:4, Interesting)
I see people claim to want to end the IRS, often time the Libertarians. However, a government does far more for its people now than it would do in the 1800s:
* We have all see what happened when public health and disease quarantine measures were not done, with the body count in the US. A government needs to be able to take measures, including pay people cash to keep food on the table and businesses running, in order to keep the economy from crashing, as well as provide public health treatment.
* War is expensive and on more fronts. Cyber security, psy-ops, terrorism, and needing defenses in the air and space against all enemies foreign and domestic isn't cheap.
* Governments have to worry about food safety, because ill or dying citizens mean lost money to business owners, and keeping aniline out of the breakfast sausage means less government resources having to be spent on special eds needs due to malnutrition.
* Governments have to worry about citizen morale. Eventually, if they don't care about it, they get overthrown, and there is a dictator waiting in the wings to ride in on the shoulders of a disaffected population who will take any change.
The 21st century is a lot different now, and it takes far more resources to handle it. Ideally, taxes should come from business profits, progressive income tax, and a progressive VAT, with tax breaks for contributing to charities, and other encouragements for positive behavior.
You have to look at government as a farm. What happens if you let downer cows and wormy chickens cause a part of the herd do tie? You make less money. What happens if one bird from another flock is deathly ill? You separate it so it doesn't kill your herd. What about predators? Letting the coyotes and other animals take their pick of one's flock means there may be nothing left. A farm has to put money in and keep things going if it wants to succeed and expect a harvest.
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I've always thought we should tax, not income, but wealth.
So you report everything you own to the IRS. Yeah. I can see that working out well.</sarcasm>
Re:END THE IRS! (Score:4, Insightful)
It's not the IRS you should be scared of; it's Congress. The IRS is just the people who try to make what Congress has decreed work.
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Not about tax revenue (Score:2, Troll)
Crypto is a good way to identify criminals (Score:3)
Re:Crypto is a good way to identify criminals (Score:4, Insightful)
But once you remove that 95% contingent, the rest are trying to avoid records of a transaction leading to them, yes.
The base that keeps the speculators afloat (Score:4, Insightful)
Roll of quarters (Score:3)
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LOL!! There is plenty of money laundering without crypto see the roughly 2 Trillion : https://www.msn.com/en-us/mone... [msn.com]
Money Laundering and criminal transactions will happen with or without crypto. Right now many of the world banks are a mess because the currencies are failing. So as some countries are doing, they're forcing their people to use only their worthless fiat currencies because fiat represents debt in many cases.
Crypto typically has a set number you can have. With the USD, the fed can go to th
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That is a pretty important argument. Most of money laundering is done with all the 'offshore' constructions. That is where the big boys are. Cryptocurrencies is the small stuff. There is a big chasm between the major league money transactions where you see nothing about what is going on , don't understand what is going on when you do see it, and can't do anything about it when you do know it, and the other side where everything is known and there is no freedom to get around it at all. It's the latter where
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Crypto currencies are also a good way to conduct counter intelligence and discover when your covert communications channel has been compromised. You can conduct drug deals or organize terrorist activity and the TLAs will wait patiently until they have enough evidence to make a court case. But just brag to a buddy that you made $10K in unreported income and the IRS will blow years of undercover work by asking you for their cut right away.
Give me (Score:1)
Re:Give me (Score:4, Informative)
The rule for federal taxes is income derived from any source. If you buy bitcoin at a low price and sell it at a high price, you have income, just like if sold a stock for a gain. You owe taxes on that gain.
Also, the IRS doesn't care where you get your money from, so long as you report it. You can even declare money from drug deals [irs.gov] and they're happy.
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You are REQUIRED to declare money from drug deals.
This is another way the government gets plea deals. They pile on charges to where going to trial means potentially a 1000 year sentence.
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To be fair it's been case law in the US since 1927 that you have to declare (and pay relevant taxes on) illegal income so if the people of the US disliked that they've had plenty of opportunities to have the law changed.
Digital Marketing (Score:1)
Which it is (Score:4, Interesting)
which treats bitcoin, ether and their kin as property rather than currency.
Considering people were excited when the value of bitcoin rose so they could sell what they had at a profit, and then horrified when the value of bitcoin plunged so they were losing money when selling, it is quite clear bitcoin, ether, etc are property and not currency. You're buying it at one price and selling it at another. No different than buying and selling stock.
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Or buying and selling antiques. Or sports memorabilia. Or real estate.
Re:Which it is (Score:4, Informative)
You do realize that currency does not have a fixed value, right? I can buy CAD with my USD today, and than sell it tomorrow and make or lose money, just as easily as I can do the same with Bitcoin.
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OK let's do a some hypotheticals (Score:5, Insightful)
Scenario 1:
I have $1000 in United States currency.
I use it to buy gold bullion.
Two months later, after the price of gold has changed, I buy dollars with the gold.
I use the dollars to buy opera tickets. I enjoy the opera.
Scenario 2:
Same as scenario 1 except the opera house takes my gold bullion in payment at a spot-market-price exchange rate. In the end, they get $1000, I get to see an opera, and someone who wants $1000 worth of gold gets it.
In scenario 1, I have to declare an investment gain or loss on the sale of the gold for dollars.
What about scenario 2?
Scenarios 3 and 4 are the same, except instead of buying gold bullion, I bought Canadian currency. In scenario 4, the opera house accepts Canadian currency at the current spot-market exchange rate.
Philosophically, from one point of view all four scenarios are the same.
From another point of view, there is a difference between the cases where the opera house demands US dollars and the cases where they don't.
There is also a point of view where there is a philosophical difference between gold, which is typically considered a commodity, and Canadian currency, which is of course currency.
Are things like cryptocurrencies more analogous to gold or more analogous to a currency backed by another country's bank or government? That is the question. I don't think we, as a society, have answered that question yet.
To make things more interesting, what if instead of a free-floating cryptocurrency like BC it is a "stablecoin" that is pegged to something other the US Dollar, such as a coin pegged to the Canadian Dollar or to the spot price of gold on a particular market?
Of course if it's a USD-pegged stablecoin then the issue is moot as far as the IRS is concerned, since there is no profit or loss in US Dollars to report, save perhaps some trading costs.
Re:OK let's do a some hypotheticals (Score:4, Informative)
I think in both cases, the IRS rules are that when you dispose of any asset, you need to recognize the gain (or loss), in US Dollars. It doesn't matter if it is gold, stocks, comic books, or currency (Euro, Canadian dollars, or even Bitcoin).
If you have a bank account EUR, you are supposed to keep track of the US "cost basis" of those EUR as you acquire and dispose of them. Unless you are moving large amounts, you can probably ignore most transactions and/or use average exchange rates rather than tracking every individual transaction, but in reality you are supposed to track them all.
The complaint that "bitcoin should be treated like a currency, rather than a property" shows a misunderstanding on how the IRS treats currencies. A currency is treated like a property by the IRS - but because a US dollar is always worth one US dollar, most people do not have to deal with gains or losses when acquiring or disposing of US dollars..
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Could get very messy with the wild fluctuations in the value of Bitcoin. What was worth $10,000 one day may be worth $5,000 a week later.
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Could get very messy with the wild fluctuations in the value of Bitcoin. What was worth $10,000 one day may be worth $5,000 a week later.
No doubt.
People trading in "Penny Stocks" face similar volatility and they seem to be able to deal with it.
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How do you calculate it? If it's just the value on the day you file your taxes you would be wide to wait for (or manufacture) a sudden drop. If it's average your tax bill could be more than the value of the assets. Day to day for the whole year perhaps?
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How do you calculate it? If it's just the value on the day you file your taxes you would be wide to wait for (or manufacture) a sudden drop. If it's average your tax bill could be more than the value of the assets. Day to day for the whole year perhaps?
For most assets like stocks and "regular" currency, the "cost basis" is fixed when the asset is purchased and the gain/loss occurs when it is sold, so the "best" pricing would be the to use the actual US dollar amount spent or received if the asset was bought or sold using USD (taking into account any trading fees which would impact the cost basis). When trading the asset for something other than USD (Canadian Dollars or sandwiches for example) one could use the market price of the asset at that instant, or
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+1 informative. Donald Trump wishes he had consulted you on his taxes.
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$500 threshold (Score:2)
I think it should be a much larger number ($50,000) in total transactions within period of time (A week) with an individual reporting of single transactions over $5000.
I think current reporting requirements sound impractical to the point they are unenforceable.
An entire ledger of all transactions? For something that calls itself a currency? Sounds like a privacy issue to me. Yes mister tax man I bought some hemorrhoid cream.
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Bitcoin no more regular than magic cards (Score:3)
Calling a goat and airplane doesn't make it fly (Score:2)
> For something that calls itself a currency?
Currency has two related purposes. To be a currency, a thing needs to satisfy these two requirements.
First, right now I'm sitting in front of Little Caesar's pizza and Great Clips. With currency in my pocket, I can go into Little Caesar's and get a pizza, I can get a haircut at Great Clips. That's called "medium of exchange" - the currency is the thing you can generally buy stuff with, and stores sell things priced in $currency.
Secondly, I he currency is a
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Calling a goat an airplane doesn't make it fly.
No, but while it's loaded in your trebuchet you can call that an aircraft carrier.
But But But (Score:2)
Slashdot keeps telling me Bitcoins are worth as much as tulips!
And where have you been? (Score:2)
Can write off losses then? (Score:2)
So if you have a wallet you can't remember the password for, doesn't that mean you can write off that value since the property is essentially lost?
Or, if you sell Bitcoin for less than you paid for it, seems like that should be deductible as well as a capital loss...
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There is *ALWAYS* a record of transaction ... (Score:2)
If you lost access to the wallet, you can't prove either way can you? To write it off means you have to prove the values you're writing off. And if you can do that, you have access to the wallet. It's no different than claiming you have a brick of gold on a boat obtained without a record of transaction, and it fell into the Marianas trench. At that point, you have nothing to prove or deny the existence of that asset.
But you have a record of the transaction. You have a record of every transactions. Its the blockchain. Which also means you know the value. What you may lack is proof of ownership.
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So if you have a wallet you can't remember the password for, doesn't that mean you can write off that value since the property is essentially lost?
Or, if you sell Bitcoin for less than you paid for it, seems like that should be deductible as well as a capital loss...
It does, and it is. You should be declaring these sorts of losses just as you should if you lose out on any currency.
Oh, maybe not for the loss of password. Theft and losses used to be deductible but I think Trump's 2018 tax revamp got rid of that: https://www.freshbooks.com/hub... [freshbooks.com]
Maybe you could convince someone to buy your wallet for $1 and make the forgetfulness turn into a loss that would be deductible.
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Maybe you could convince someone to buy your wallet for $1 and make the forgetfulness turn into a loss that would be deductible.
While possible, the IRS view may be that this is merely a transfer of tax liability from you to them.
What would concern me more is the AML and 'gift tax' implications of such a transaction. I'd need to do a lot of research (and probably consult an actual tax professional) before trying something like that.
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Acute Myelogenous Leukemia?
Oh!
Anti Money Laundering
I suppose that might be an issue, but really, it is unlikely you would be doing this frequently, and you should obviously keep documentation of the transactions, so I wouldn't be too concerned unless we are talking about . Unless you are a bank or other financial institution, I think there is nothing prohibiting you from buying or selling any asset to anyone for any price. Well, maybe not - dealing in guns, explosives, or pharmaceuticals is pretty highly re
Property vs. Currency = loopholes? (Score:2)
To use the example from the OP, if you buy a sandwich with crypto currency, then eat most of it, then trade the piece of crust for less crypto currency, can you now write off the sandwich as trading loss? A more real example, can you just buy the latest iPhone in January and sell it back in December, resulting in less crypto back in your wallet, therefore a trading loss?
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To use the example from the OP, if you buy a sandwich with crypto currency, then eat most of it, then trade the piece of crust for less crypto currency, can you now write off the sandwich as trading loss? A more real example, can you just buy the latest iPhone in January and sell it back in December, resulting in less crypto back in your wallet, therefore a trading loss?
No more than you could do the same thing with Euros.
Each transaction would be valued at the time of the transaction by whatever the then-current exchange rate was. The single bitcoin purchased for $xxx USD was traded on Jan 1 for the sandwich at a value of $yyy. You would owe taxes on the gain of yyy-xxx, and you would be the owner of a sandwich valued at $yyy. If you sell that sandwich for $zzz you now have another gain (or loss) of zzz-yyy. If you ate half the sandwich first, you would need to "pro-rate"
cryptocurrency (Score:1)
Can you say "honeypot"?
Tempest in a teapot... (Score:4, Insightful)
Next up; Announce sale of shares of "stockcoin", insist that the SEC has no authority here because those are totally a currency rather than a security, man.
The state... (Score:1)
Re: (Score:1)
Property or Currency? (Score:2)
Because I've never had to report the acquisition of property to the IRS.