Taxes

So let me get this straight. If I buy something directly with bitcoin it's a taxable event? How would I go about paying that tax if I don't even have fiat? How does that make any sense?

Other urls found in this thread:

tedcruz.org/tax_plan/
irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/estimated-tax/large-gains-lump-sum-distributions-etc/large-gains-lump-sum-distributions-etc
irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/estimated-tax/individuals/individuals-2
money-education.com/resources/financial-planning-news-and-blogs/blog/129-structuring-cash-transactions-under-10-000-is-criminal
twitter.com/SFWRedditImages

it doesn't
the IRS are crooks
and are unconstitutional

When is someone going to sue the IRS for unconstitutionality?

I might when i cash out, look up "Tax Patriots" user

If we can meme coins to the moon can we meme Trump's tax plan through faster?

Am lawyer. You can't sue the IRS. Collecting taxes is absolutely a constitutional function and those that don't waste time, look stupid and are called "tax protestors". Only a notch above "sovereign citizens"

Get accountant, pay your capital gains and file quarterly reports. You don't have to do it perfect, just good enough.

Trust me user, you have no idea what these fuckers can do to you if your shit isn't in order.

>You can't sue the IRS.
the fact you can't sue them if they fuck up should make you worry
no one should be above the law
>Collecting taxes is absolutely a constitutional function
this is true, but income tax is supposed to be depending on the % population of your state in the country's population, not individual income tax %'s

>unconstitutional
can seize your property, garnish your wages, with draw from your bank account, and if they accuse you of something the burden of prof is not on them in tax court.

Been that way for ages and it isn't going to change. Should have voted Ron Paul

Why didn't we meme Ted Cruz into office? Ted Cruz wanted to ABOLISH the IRS and just have a simple 10% flat tax for everybody where you just report on a simple post card. He was the most radical candidate EVER.

but i did vote RP
i want out of this cuck-tocracy

You will be automated soon enough

how likely is just a president going to get something like this done?
won't it need backing in congress?

tedcruz.org/tax_plan/

Why wasn't there more of a big deal about this? IT'S FUCKING CRAZY.

Glad i'm from Hong Kong and not an American.

Well if they majorly fuck up thats different (and rare). But the constitutionality of the IRS collecting taxes pretty much however Congress directs is settled law.

I'm not trying to piss on anyone's parade. But the bottom 5% of millionaire anons that fuck up their taxes and piss off the IRS are going to get so fucked.

I've got a meeting with accountant. A law school friend/CPA partner, and a meeting with mega-firm to cover all my bases just next week.

I've retained them for legal opinions on taxation, engaging fairpump.net, and the legality of managing cryptos for other people, just for starters.

BTC is considered property by the IRS. Once its used to purchase some other type of property or converted to FIAT you will need to do the capital gains tax. AFAIK alts aren't considered property...yet.

>and file quarterly reports
what do you mean? estimated taxes?

>AFAIK alts aren't considered property...yet.
they very much are.

Now I understand why that guy flew a plane into the irs.

Yeah but how do you even pay that? Theoretically if you lived entirely off crypto somehow how in the world would you pay that tax? Isnt sales tax factored into the purchase even if you use bitcoin?

Pay your capital gains quarterly instead of annually. Ive started to pull out 30 to 50k a week now so i pay taxes every 3 months. Stay ahead of it.

From trading or holding? I am not going to pay taxes for holding bitcoin.

alright good. I don't owe anything right now for Q2 because I claim zero on my day job, but will definitely owe Q3 and Q4 this year.

why are people this dumb? you only pay taxes when you sell to fiat, trade for an altcoin, or make a purchase with crypto.

quarterly? Dont you have to do that only if you own your own business or is an actual day trader by profession? wtf?

Hire professionals. Do your best to make honest, full payments until the IRS gives more guidance on how cryptos should be treated. They won't fuck with people that relied on professionals.

Don't be the user that ignores taxes. It's just a phone call to an accouunting firm and will cya

You didn't answer OP's question though. The entire concept of the IRS and taxes only even makes sense if you were to convert your bitcoin into fiat currency. If you don't, then how is the gov't supposed to get their share.

Imagine I'm a potato farmer, and I trade my potatoes to the chicken farmer in exchange for his chickens/eggs and to the corn farmer for his corn. When the taxman comes around, what the hell am I supposed to do? Give him 20% of the chickens and corn I traded for?

irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/estimated-tax/large-gains-lump-sum-distributions-etc/large-gains-lump-sum-distributions-etc

irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/estimated-tax/individuals/individuals-2

This

So wait, I need a record of every bitcoin I buy.
But what about if I use it to buy alt coins? Do I report that?
Is there seriously any guide on this anywhere?

Would that make receiving bitcoin income taxable?
If not, then how is anything you do with it taxable? It's essentially bartering at that point. Can you be taxed if you trade a horse for a cow?

...so if I am reading this shit correctly, I have been trading shitcoins here and there outside of my day job but likely owe more than 1k in tax on the trades, I need to file quarterly? what in the actual fuck? no way the majority of US crypto traders are doing this shit.

Everything I read said that buying something with BTC is a taxable event even though it makes no sense whatsoever, so I'm asking for clarification

They're going to clean up and shut down alotta people

Might even dissuade people from crypto

you have to calculate the USD value in a "consistent manner" at every buy/sell for every coin involved in the trade, that's the guidance the IRS gave us in 2014

yes everything, plenty of guides but nothing all encompassing

yeah you do, and yeah not many people are.

you get taxed when you sell a house, you get taxed when you sell crypto. they are both property to the IRS. so yes, you can get taxed when you trade a horse for a cow.

But what if you traded the house for a boat? there is no transfer of wealth going on, so how would you get taxed? selling/=trading

Well you're incorrect. I'm not going to argue tax law, but say I buy a 100k car with crypto that cost me 10k. You're saying that's not a taxable event? Of course it is. I made 90k through investment and realized a gain. Uncle Sam wants his cut.

That's why the answer is to hire a professional. If OP is asking questions like he asked then he needs pros. Not a dig on OP, it's a good question.

It's obvious that the government will want to shut down cryptocurrency, because it threatens their fiat money monopoly that maintains power and value theft via the federal reserve, etc. But the question is, how? There's literally nothing they can do to shut down bitcoin. At best, they could go after exchanges who buy/sell it. But even then, you'd still be able to do bitcoin transactions with whoever you want and there's still nothing they could do about it.

honestly your dumb examples mean nothing. moral of the story is all trades are taxed. if you want to try to convince the IRS that you are "just bartering" everything, well, good luck to you, and have your checkbook ready.

>
>
>Imagine I'm a potato farmer, and I trade my potatoes to the chicken farmer in exchange for his chickens/eggs and to the corn farmer for his corn. When the taxman comes around, what the hell am I supposed to do? Give him 20% of the chickens and corn I traded for?


And yes, you absolutely are supposed to pay taxes on every transaction.

>you have to calculate the USD value in a "consistent manner" at every buy/sell for every coin involved in the trade, that's the guidance the IRS gave us in 2014

That still didn't answer the question I originally posed though. If I never convert to USD, how can they tax you?
That's the magic of cryptocurrency. It acts as both a commodity/stock AND as a currency to be traded for goods/services. Theoretically, I never have any reason to ever convert to USD, except in small amounts for when I need to quickly use it to buy from people who don't take btc.

It may be dumb, but it's a legit example. If I bought a house for 100k and traded it with another guy for a house that was 300k how in the fuck would that be taxed?

how do i tax evoision?

I have an account do mine. As long as I give them all the trade history and everything, they should take care of it, right?

How would the IRS get their cut? Are they going to give me a QR code to send them buttcoins?

How? Do I give the IRS one of my chickens?

>
>It may be dumb, but it's a legit example. If I bought a house for 100k and traded it with another guy for a house that was 300k how in the fuck would that be taxed?

Because it's income. Say you win a car on wheel of fortune. Prize tax is high, say 50%. They do t want half your car. They want half the value of your gain. Get it? So if you win a 20k car, you owe 10k dollars.

good discussion. thx for your input.

Wouldnt it just be gaining property? Because you're making the IRS sound like actual mafiosos.

it answers the question, you are just refusing to accept the answer. you need to find a way to calculate USD values, and it has to be consistent. that's what you have to do. if an altcoin costs 0.01 BTC, then multiple the BTC/USD price by 0.01, simple as that. just keep doing it the same way. if you can't figure out a way to do it, that's your problem.

you'd pay on a 200k gain

>Because you're making the IRS sound like actual mafiosos.

They're the real ones.

How. Would. You. Pay? You didnt gain any money from the trade so how is there anything to pay?

I'm pretty sure the IRS denominate in USD, not chickens, houses or bitbean.

If I didnt file last quarter can i just file this quarter and pay the shit i didnt pay the first quarter? I dont want uncle sam to send me to pound me in the ass prison over some fucking shitcoins. Also goddamn this is some fucked up shit. The IRS has some shitty vague guidance docs they dont publish to the general public and expects people to just pay up and if they dont, penalize them....what a crock of shit.

Exactly, so how is buying anything with BTC taxable? If it's listed as property and not a currency I am incredibly confused as to how and why purchasing something with BTC is taxable.

'sorry IRS, don't got me any USD, can't pay you sorry.'

no problem user, off to the pokey you go.

lol.

What I'm getting is that you need to sell the goddamn house in order to pay the tax. At that point, what the fuck was the point in trading anyway? What the fuck is the point of winning property, say, in a game show, if you just gotta sell it to pay the tax.

Makes me wanna be an ancap

you are so thick. for the trade to be fair your house would have had to appreciated to 300k. that's what a trade is, exchanging things for equal value. you acquired the house for 100k, you sold/traded it for a value 300k. you now have to pay 15% on the 200k capital gain assuming it was more than a year ago.

>
>You will be automated soon enough

Youre wrong but idgaf. Sold partnership. Retired. Clocked 75k in my blockfolio today and Lisk is still mooning. Am 33. Feels good man.

But hey, good luck moving out of your mom's basement.

If the value of the USD increased 2x, theoretically speaking, then would I pay taxes on that increase, even though the number of dollars I owned didn't budge?
So why then would I pay taxes on my bitcoins raising in value if they're just being stored?

And in the example we're using, you still haven't explained HOW WOULD I PAY? Am I supposed to give the IRS an equivalent amount of the bitcoin I own? Do I get a QR code from the IRS to send my bitcoin?

I guess you have to pay them in USD, and if you cant pay IRS asks you to bend over and rapes you with a rake. Welcome to the land of the free.

Even though neither parties in the trade went to anyone to get their property appreciated, they would have to pay the tax?

rose 2 x relative to what? chickens? oil? hash cookies?

you pay the IRS in usd you fucking idiot.

holy fuck how is this so hard?

because BTC is property, not a currency

you sell the BTC in order to buy something. you pay tax on the sell value minus the purchase value, because it's property, not currency.

this isn't a word problem in math class, you can't beat the system by leaving out certain conditions and trying to ignore them. in your useless example you are making the assumption that the houses are worth 300k. you bought it at 100k. you owe taxes. if the other guy bought his originally for 300k, he owes nothing because there was no gain. my patience is wearing thin here.

That's (part of the reason) why they hate deflation so much. It's a gain they can't tax.

>rose 2 x relative to what? chickens? oil? hash cookies?
That's my point. Increased in value are only relative to other things. And if I'm not exchanging bitcoin to other currencies, how can a value be ascribed to be taxed?

I just checked with a cpa. I owe 28% federal on my shitcoin trades and extra 9.3% cuz I am trading in commiefornia. LMAO I owe the taxman nearly 40%.

This may be perfectly logical to you but it makes absolutely no sense to me. Why arent people filing tax reports on everything they obtain for free from friends? There should be billions of tax reports on that alone every year.

could be worse.

see:

You only have to report if you cash out rite???

guys i found a photo of OP

That's what I'm trying to figure out here. AFAIK, you only have to declare gains when you cash out to USD. I don't pay taxes on stocks until they're sold. Wouldn't bitcoin be the same?

when gain is realised it is a taxable event.

I may seriously leave CA over this shit.

value (and any taxes) doesn't exist until you sell. it matters fuck all until then. then, at that point in time, you know your value and gain/loss.

now you're just being autistic. I'm actually trying to help you here. you want to file form 8949 on some dumb shit a friend gave you? go right ahead.

you're being autistic too. coinbase is a money transmitter. they're still your coins until you sell them.

no you pay on all altcoin trades and purchases as well. this is under the assumption you are in the business of trading coins. if you're not a trader (nobody on biz), then you can look into a 1031 like-kind exchange. but no one here will be able to do that.

Explain this to a retard please.

Gonna move to washington personally

Right, and that's when it's converted to USD.

cash out in small amounts

Hope you speak chinese, gweilo

only if the person you are buying from reports it to the irs. no, amazon does not report what you buy to the irs, they dont even have your ssn. the irs does not research what you buy, but of course they want you to believe that. dont fall for these useful idiots saying you will get raped if you dont report things you buy. the only only things you report are what is tied to your ssn, like stocks, bank accounts, jobs, etc.

If what you say is true, then millions of americans should be imprisoned for tax evasion for not reporting on any gains from items they've received from friends/acquaintances. I want to understand why that isn't the case.

Don't all the exchanges take your info specifically so that they can report your input/output to the government?

Regardless, that's tax evasion. But the question is whether you can get away with it, which is a separate matter.

>How? Do I give the IRS one of my chickens?

No you cut the chicken in half and send it to the IRS.

Nah, but they have good food. Also I'm Black.

I have a friend up there. Who knows maybe crypto will be the impetus to finally create the state of jackson. I would love to keep my crypto and go live in the redwoods.

DO NOT cash out from an exchange and expect to get away with it.

you can temper tantrum all you want, it's not going to change the fact you owe taxes on all your trades.

while we're at it, lets put every waitress, bartender, and taxi driver in jail for not declaring all their tips.

you starting to understand now? some things can't be tracked, ever. like cash tips and your dumb examples. but 98% of crypto users have at least one of the exchanges tied to their bank account, so they're going to have to pay.

>cash out in small amounts

Believe it or not that's actually a crime called "structuring" and can land you 5 years in jail and have your money (((seized))).

money-education.com/resources/financial-planning-news-and-blogs/blog/129-structuring-cash-transactions-under-10-000-is-criminal

So what's the best way to cash out under the table then?

ok so then why arent all taxi drivers audited? If the potential exists for tax evasion why arent they going after them?

off topic from the thread. go be autistic somewhere else.

The (((lawyers))) only go after high net-worth individuals. That is why the (((OP))) here is salivating and created this thread.

tax laws are bullshit, what the fuck am i supposed to do to not get banned IRL

It's relevant because if taxi drivers arent getting audited for potentially not reporting their tips then why should BTC holders/traders have to report it when they buy something?

Taxation is theft, everything can be privatised, tax apologists are literal cuckolds that are okay with their money being taken at gunpoint.

You should of just bought a fucking missile on the deepweb with your btc to threaten the government.

There are no tax apologists. There are only Jewish lawyers.

can I practically just honestly report the gains I make after cashing out into USD? I don't understand how we are to trace the price of each trade as there is so much room for error and requires checking the relation of BTC/USD for each moment in time... kind of a hassle for them to trace down too

he's a guess. taxi drivers are poor. the IRS would lose money going after them.

but crypto traders who bought coins before april/may 2017? they're rich. and the IRS is fully aware of them.

it's common fucking sense.

So how does something like Bitpay factor into all this? Its not tied to a bank nor requres any identification