jojo69
[H]F Junkie
- Joined
- Sep 13, 2009
- Messages
- 11,267
he's mining alts and exchanging
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Is that bitcoin?
So .......
how the heck does this work when I'm doing my taxes?
So .......
how the heck does this work when I'm doing my taxes?
Quick summary is if you take the money out and into your bank account it is then INCOME, just like a paycheck. You will have to grab enough "expenses" to take care of the taxable income but you are now officially running a business out of your home.
Traditionally if its a small sum people just ignore it and hope they don't get audited and in that case the worst thing that happens is you have to pay whatever that is for your tax bracket.
Plus penalties of course.
Plus penalties of course.
Well, I guess part of the question is how to calculate my gain. Because each exchange has different rates, I'm at a disadvantage because I bought from CampBX and then did a bunch of trading at Mt. Gox before trading it for USD via Coinbase. Using FIFO on the trades given the rate quoted by the exchange and not accounting for trade fees, I get a taxable obligation ~14k from realized gains. However, I only really withdrew 10k. But that 10k withdrawal means that the IRS surely was notified.
So do I treat it as if it were stock and I realized gains of 14k, or do I go with the 10k that I withdrew? I still have some money in BTC which is why those two numbers aren't the same.
btc isn't regulated under stock trading, just declare the amount you withdrew as income. So long as you weren't trading BTC>bank in usd then you should be fine.
^ That seems to make the most sense. In any rate, it's less than the worst case scenario but still solid enough logic should it ever come into question so I'm comfortable with it.
I wouldn't report crypto>crypto, I don't even know how I'd get a history of my trades to report it if I needed to.The IRS has not made any official statements about how they plan handling the tax implications of BTC. Either way, the sale of BTC to USD in a trading environment is a taxable event without regards to whether it hits your bank account or not. I would imagine that it would be treated the same way as ANY asset (including stocks, widgets, video cards and charcoal grills). When you sell it, your gain/loss from the sale is realized (proceeds minus basis) as either a short term or long term capital gain. In this scenario, buying BTC would not be a taxable event.
I think what you were trying to say is that BTC to USD transactions are not currently reported to the IRS in any manner, therefore, your reporting of those transactions is on the honor system.
Scan, the largest online computer hardware store in the UK now accepting bitcoin payments:
http://www.scan.co.uk/info/bitcoin
Buy at 500 and if it goes lower, buy more.
heh yeah if it goes that low i definitely will get 6-10 coins. havent seen it happen yet though. lowest ive seen was around $650. what's the quickest and most secure exchange to use to buy a couple coins?
I like initially buying through Coinbase, especially being that you are a US citizen.