Crypto-cash souk Coinbase forced to rat out its high rollers to probing US taxmen Cryptocurrency exchange Coinbase will be turning over information on 14,000 of its users to the IRS – Uncle Sam's tax collectors – thanks to an order from a US court. Judge Jacqueline Corley of the San Francisco district court ruled on Wednesday the Bitcoin, Ethereum, and Litecoin trading website will be required to hand over …
I asked this of my tax guy a year ago.... the answer is "it depends" but most likely falls under capital gain or loss rules as there's some gray area according to him. I'll have to check again with him when I do my taxes for this year. But a gain is "income" and will be taxed.
It would almost certainly be taxed as normal income - gold is because the IRS accepts the argument that it is interchangeable with currency and is thus classified as such for taxation, as opposed to say copper which is classified as a commodity and thus taxed as a capital gain. If bitcoin supporters want to claim it is a currency, then they have to accept the consequences of that classification.
It's cap gains in the US according to the IRS. They are treating it like securities, not currency. This is at odds with a handful of other federal agencies who have classified it differently for their convenience, but for now, that's where the IRS stands.
https://www.irs.gov/pub/irs-drop/n-14-21.pdf
The position in the UK is:
If the bitcoins are held for business purposes, eg like a business bank account, it goes to “exchange gains / losses” in the accounts, and “loan relationship income” in the tax return, and it is taxed as income.
If a customer pays you in bitcoin, you convert it to pounds at the rate applicable on the date of transaction, record that amount as sales, and pay tax on it as if you received pounds. Same if you pay a supplier in bitcoin, convert to pounds and claim that as your business expense in the usual manner. Any change in value between sale / purchase / conversion, see above.
Basically the rules are the same as if you were trading in Euros / USD etc.
If it is held for personal purposes - to fund personal expenditure or as an investment, then it is taxed as a capital gain. The first £11,300 per year is covered by your annual CGT allowance.
"If you were a private Bitcoin investor/speculator and you cashed in all or part of your wallet, would the money be taxed as capital gains or some other form of taxation?...." Wrong question. Right question - could Uncle Sam's taxbods present a case in court that makes it look like you intended to avoid paying tax by using Bitcoins? If so, you are screwed even if your intentions were otherwise. The taxbods work on the basis "you didn't ask us if you needed to pay tax on that, therefore we think you were trying to avoid paying tax (and are probably a criminal anyway)". And remember - Bitcoins are not anonymous!
If you were an investor/speculator you'd be have some sort of record of when you bought the bitcoins you have and for how many dollars. Then when you sell them you can show the records and calculate the appropriate taxes, just like when you buy and sell stock or other financial instruments. If they were private sales it might be a bit harder, but just like most stock sales are via a broker that provides records, it is still allowable to buy/sell stocks privately though you may get a bit closer look from the IRS if you do.
If you're a criminal buying and selling illegal items with your bitcoins, you probably aren't listing anything on your tax forms about them - in particular if you sold some drugs for bitcoin a few months ago and then bought something else (or converted them to dollars) at today's higher price you should declare that income based on the bitcoin conversion rate then and now. Criminals rarely do - in fact many don't even file taxes - which makes it really easy to get them for tax evasion even if they can't get them for other crimes.
97% of investors make less than the threshold level; and 3% make more.
Now what sort of investment encourages that sort of hype?
"hello, buy some shares in xyz; not only will you have a 97% chance of being fucked upon, but if we can remember the other deals, then you too can support their desire to avoid taxation. "BUT IT'S THE GREATEST DEAL IN THE WORLD; I KEEP THE RESULTS IN MY TROUSERS TIGHTLY FURLED, ITS A DEAL AND A HALF WHEN IT'S UNFURLED, IT' S THE GREATEST DEAL IN THE WORLD"
A slight abuse of Ivor Biggun; but I suspect that Doc Cox won't mind.
He was straight but there are an awful lot of suckers out there.
Bit like sterling but without the taxation assets to support it.
Yeah, this is puzzling. It's been several years since brokerages have been required to record and report basis info too. But as recently as three years ago, CC were unclassified as assets for the IRS. I guess that was the "first they ignore you stage." Now we are even beyond "then they laugh."
I think you'll find that this is the IRS' opening offer and those 480,000 accounts are not safe either. They are likely fishing but with a fair estimation of how successful they will be. If, after investigating these details, they can then persuade the next judge that there is rampant tax evasion going on in this area or with this company based on what they found under this warrant then the flood gates will open. They do have some clue as to what they're up to.
NSA, FBI work on a similar basis. First the overly broad catch-all warrant request. When that is denied refine your criteria to focus in on the information you need but try to still be overly broad to get more information on where to go next. Repeat until warrant is obtained. Use any criminal activity found to show how you were "right all along" and use it to persuade the next judge the activity is rampant and the next warrant needs to be far more all encompassing else they are implicitly condoning the behaviour etc. etc.
NEUKlearer HyperRadioProACTive IT Terrain with all manner of unknown and unforgiving man traps and money pits. And IT is not an Advanced IntelAIgent Space for either the Unwary or the Less than Perfectly Prepared for Remote Anonymous and/or Autonomous Virtual Assault.
One does wonder at the wisdom of bankrupting services opening up yet another novel front for mass innovative attack.
Whenever they cannot help/stop themselves, are they just as hopeless addicts to the drug which others produce and supply?
That's a systemic vulnerability for exhaustive exotic and erotic exploitation and 0DayTrading.
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