AMD Video Card Shortage

[Drudenhaus]

I think trying to sell $300,000 worth of BTC/LTC might not be as easy as trying to sell a couple hundred dollars worth. Remember there is an exchange. Someone on the other end has to want to by $300,000 worth of BTC/LTC so you would need an institutional investor with a large bankroll who thinks that BTC/LTC will go higher than $1000/BTC. Virtual currency is the most volatile investment there is right now and I think you would be hard pressed to find someone that wants that many BTCs.

I dunno about that much, but my buddy cashed out for around $50,000 very recently with almost no effort.

 

[WinSomeLoseNone]

I dunno about that much, but my buddy cashed out for around $50,000 very recently with almost no effort.

Does the Gov't classify this as STCG?

I would imagine your buddy is going to get a call from the IRS when 50K hit's his bank account, unless he files a Schedule-C and reports the income from his 'mining' business.

Edit** I had no idea there were so many digital currencies

http://www.coinwarz.com/cryptocurre...Cost=0.1000&sha256Check=true&scryptCheck=true

 

[Drudenhaus]

Does the Gov't classify this as STCG?

I would imagine your buddy is going to get a call from the IRS when 50K hit's his bank account, unless he files a Schedule-C and reports the income from his 'mining' business.

Edit** I had no idea there were so many digital currencies

http://www.coinwarz.com/cryptocurre...Cost=0.1000&sha256Check=true&scryptCheck=true

He mentioned that. I have no doubt he will have to pay taxes on his cash out.

 

[WinSomeLoseNone]

He mentioned that. I have no doubt he will have to pay taxes on his cash out.

Hopefully he has an accountant to talk to.

There are many ways to report the income. I'd wager that not reporting it would be a bad move.

Using a Schedule C would allow him to deduct ~30% of the hardware cost/power cost as business expenses, assuming he has to pay taxes. Depreciation on value of the hardware could be taken into account as well.

 

[timtheenchantor]

There's some confusion on how the IRS is handling it. Here's some more information on tax compliance (US-based primarily): https://en.bitcoin.it/wiki/Tax_compliance

Relevant section:

Are my bitcoins taxed as income, or as capital gains?

Income that is earned through the exchange of services with another person, whether in the form of bitcoins, dollars, or barter; is included in gross income, and would be subject to income tax at applicable rates. Also these bitcoins could be subject to self employment tax.

In some jurisdictions, income earned through the process of buying and selling bitcoins would also be included in gross income, but would be treated as capital gains.

Note: The above interpretation is based on the assumption bitcoins are treated as a store of value such as gold, or other such commodity. If instead they are treated as a currency or debt, the full gain could be taxed based on market value at the end of each tax year. 3858 IRS Ends Currency ETN Advantage Simply put, the IRS never considers currency a long-term investment. Consequently, if bitcoins are treated as a currency, you will be taxed the same as holding an account in any non-functional (foreign) currency.

 

[Rizen]

Just put it in an off-shore account.

 

[skates15]

Once a upon a time bitcoins were supposed to be convertible in the sense that you could buy goods and services with them. Obviously you can convert them to dollars, which can then be used for services and goods, but there are few places that I've found which take bit coins, but that was back when they were trading at $75. I don't think that coffee shop in Austin which used to take bitcoins is going to have a customer order coffee with a 1K bitcoin and give change. To me it would be much more interesting if say, Target was going to take bit coins. And yes, I realize you can say the same for gold and silver, but my understanding of bitcoin was that it was going to be used to actually purchase things with it.