Economy Bitcoin Doubters, Come Eat Your Crow

[Quipling]

Sure.

If you were to calculate your net wealth would you include your 401(k)?

For most purposes? Sure.

But I wouldn't call the value increase over time of my 401(k) - or in my real-estate investments - "turning a profit" or treat it as income on my taxes.

 

[Cubo de Sangre]

For most purposes? Sure.

But I wouldn't call the wealth increase "turning a profit" or treat it as income on my taxes.

Great.

Nor will a bitcoin holder, even when they cash it in. Any way to track that for taxes or will Uncle Sam have to eat shit there?

 

[Quipling]

Great.

Nor will a bitcoin holder, even when they cash it in. Any way to track that for taxes or will Uncle Sam have to eat shit there?

(1.) I'm going to note that the argument has shifted here. I responded to a post claiming that an increase in the value of (held) bitcoin is profit by arguing that it was not profit until realized. But let's move to your question.

(2.) We can distinguish between
(a) wealth increase that is not subject to tax because there is no transaction realizing the wealth increase (holding something that has increased in value without realizing a profit by selling/trading it), which is true for bitcoin that is held, but not for bitcoin that is sold. This is not what I or most people consider a profit
(b) wealth increase that is realized, but is not not legally or practicably subject to taxes (not bitcoin, IMO)
(c) wealth increase that is subject to tax; (profit)
and
(d) wealth increase that is subject to tax but is largely impossible to enforce due to tracking problems, which is true for buying bitcoin low and selling high, much like it is true for some other sources of income, some of which are illegal (also profit)

https://www.irs.gov/newsroom/irs-virtual-currency-guidance
https://www.irs.gov/publications/p17#en_US_2016_publink1000172137
https://www.irs.gov/publications/p17#en_US_2016_publink1000172111

So, to answer the specific question you asked, Uncle Sam will probably eat shit because of enforcement issues. But the hypothetical transaction described (profit realized from buying at $800 and selling at $10000) would be taxable as capital gains. If Sam knew about it. Original question was about a

 

[Cubo de Sangre]

So, to answer the specific question you asked, Uncle Sam will probably eat shit because of enforcement issues.

Thanks for the thorough reply. Distilling it down, in investment terms, is that called a premium. Knowing you'll pay x-taxes with y-gains and zero taxes with z gains must factor in. When people are scraping for 6%, it's hard to beat tax free gains.

 

[Cubo de Sangre]

Well then...


https://www.yahoo.com/news/coinbase-ordered-turn-over-data-235635616.html

Most digital currencies exist in a sort of twilight state just beyond the grasp of federal regulators, but the U.S. tax authority is starting to get savvy to this whole bitcoin thing.

On Wednesday, a federal judge in San Francisco ruled that Coinbase must supply the IRS with identifying information on users who had more than $20,000 in annual transactions on its platform between 2013 and 2015. After noticing that the number of tax returns claiming gains from virtual currency didn't line up with the emerging popularity of digital currencies like bitcoin as an investment vehicle, the IRS asked Coinbase to hand over a broad swath of information on its users. Coinbase pushed back, and now the court has landed on a compromise that the company is calling a "partial victory."

 

[WorldofWarcraft]

Why would the IRS want to tax money that's already been taxed?

Motherfucking pieces of shit.

 

[Greoric]

Well then...


https://www.yahoo.com/news/coinbase-ordered-turn-over-data-235635616.html

Gotta love how innovative they are at finding ways to extort us out of money, but not how to fix anything else.

 

[Greoric]

Why would the IRS want to tax money that's already been taxed?

Have you heard of death, sales, or property taxes before?

 

[Videer]

I'm poor as dirt. Should I invest in Bitcoin?

Just ask people to send 'em to you.

 

[xcvbn]

Well then...


https://www.yahoo.com/news/coinbase-ordered-turn-over-data-235635616.html

The IRS classifies it as a currency AND as an asset. That way they can regulate it like a currency(tightly) and tax it as an asset(more $$$$).

I can't wait for the lawsuits. The hypocrisy of it all is insane. I don't mind paying taxes but this is fucking bullshit.

Edit- and to hell with Coinbase for cowering down like bitches

 

[Greoric]

The IRS classifies it as a currency AND as an asset. That way they can regulate it like a currency(tightly) and tax it as an asset(more $$$$).

I can't wait for the lawsuits. The hypocrisy of it all is insane. I don't mind paying taxes but this is fucking bullshit.

Edit- and to hell with Coinbase for cowering down like bitches

You should mind paying taxes. They're extorting you out of money you earned and forcing you to pay for "services" whether you want them or not.

 

[xcvbn]

You should mind paying taxes. They're extorting you out of money you earned and forcing you to pay for "services" whether you want them or not.

In theory I agree with taxation, but the way taxes are spent is atrocious.

I.e. A trillion dollars spent on the beautification of Iraq and Afghanistan.

 

[Greoric]

In theory I agree with taxation, but the way taxes are spent is atrocious.

I.e. A trillion dollars spent on the beautification of Iraq and Afghanistan.

When the funding is compulsory that's the only way they are ever spent, my man.

 

[waiguoren]

In theory I agree with taxation, but the way taxes are spent is atrocious.

I.e. A trillion dollars spent on the beautification of Iraq and Afghanistan.

I'm guessing you, like I, voted for the US Constitution Party or the Libertarian Party in 2016.

 

[Greoric]

I'm guessing you, like I, voted for the US Constitution Party

Why would you vote for a party that gave us the largest (and potentially most tyrannical government) in world history?

 

[waiguoren]

Why would you vote for a party that gave us the largest (and potentially most tyrannical government) in world history?

What? Could you elaborate?

 

[Greoric]

What? Could you elaborate?

We started out with the most air tight constraint on the growth of state power, and the smallest government in world history.... It produced the largest in world history. Why would you want to recycle history? Just kill the parasite.

 

[waiguoren]

We started out with the most air tight constraint on the growth of state power, and the smallest government in world history.... It produced the largest in world history. Why would you want to recycle history? Just kill the parasite.

Continual abuse of the Constitution led us to the monstrosity we have today. The federal government was supposed to be one of enumerated powers. People like Hamilton came along early and screwed it up.

Do you disagree?

 

[Greoric]

Continual abuse of the Constitution led us to the monstrosity we have today. The federal government was supposed to be one of enumerated powers. People like Hamilton came along early and screwed it up.

The important part of your post is bold...

Anyone would have screwed it. Its inevitable, because that's what the state does. It grows, because it has to. It can't offer its service from the income it receives so it always has to take in more or borrow the difference. Jefferson even understood the nature of what he compromised, per his "The tree of liberty has to refreshed from time to time with the blood of patriots and tyrants," quote.

Instead of minimizing the parasite (if that's even possible now without* a kinetic revolution) to allow it to grow even larger in the future, like it has. Just destroy it. Technology and modern communication have made it obsolete anyway.

 

[AviatorShades]

Just gonna stop using coinbase/GDAX for transactions.

Once again "evil financial scheming fat cats" put money in my wallet and the government finds a way to take it out, hand it to junkies.