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IRS Slams Bitcoin With Retroactive Tax Rules... Is Gold Next?
Submitted by Simon Black of Sovereign Man blog,
Bitcoin tax rules finally came to the Land of the Free yesterday. And I have to imagine there are some not-too-happy campers this morning, if they even know about it.
Bitcoin taxes were inevitable. I’ve written about this numerous times, and have even gone so far as to predict that the government will probably mandate special Bitcoin reporting on foreign disclosure forms.
A number of other countries, from Germany to Singapore, have already issued their own tax rules on Bitcoin and related virtual currency transactions. And yesterday the IRS finally issued their own.
Here’s the quick summary:
1) While a number of governments (including the United States to a degree) have officially pronounced Bitcoin to be a ‘currency alternative,’ the IRS disagrees.
2) According to the IRS, Bitcoin is -property- and should be taxed as such… similar to, for example, a piece of rental property or collection of fine wine.
3) This means that the sale of Bitcoins is taxable based on capital gains. If you bought Bitcoins at $1 and sold them at $501 several years later, you would have to pay long-term capital gains tax on the $500 difference, currently 23.8%.
4) If you hold Bitcoins for shorter periods of less than 1-year, you can be taxed at ordinary income tax rates on your gains.
5) To the extent that you mine Bitcoins as a trade or business, the Bitcoin income from mining activity is not only subject to income tax, but also self-employment tax.
6) If you trade your Bitcoins for some other property that exceeds your cost basis, you are subject to tax. This is a huge ruling that effects all the ‘Bitcoin millionaires’ out there– early adopters who purchased Bitcoins at a dollar or less.
So let’s say you were one of the first Bitcoin adopters and bought 5,000 bitcoins at $0.05. Last year when Bitcoin was valued at roughly $1,000 in paper currency, you traded 250 of them for a brand new Lamborghini.
The IRS would say that you had a cost basis of $12.50 for those 250 coins. But you traded them for other property with a fair market value of $250,000. This means you have a taxable gain of $249,987.50.
Naturally, the US government is happy to go back in time and thrust all sorts of interest and penalties upon you if you didn’t comply with the law.
According to their ruling, “failure to timely or correctly report virtual currency transactions when required to do so may be subject to information reporting penalties under section 6721 and 6722.”
What’s most interesting about this new set of rules is what they might mean for gold.
If you’ve ever read Currency Wars (a fantastic book by my colleague Jim Rickards), you may recall early in the book when Jim suggests a potential outcome for gold.
Imagine– paper currencies go into freefall. Gold soars. Anyone who bought gold early sees sizeable profits (in paper currency)… at which point the government steps in after the fact and sets up new tax rules to confiscate a substantial portion of those gains.
Think it can’t happen? These Bitcoin rules certainly establish a precedent.
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out of my cold dead hands...
a lot harder to track physical PM's than digital bitcoins...
I can not wait to hear #PhoneyStars spin on this one
Getting popcorn ready!
These are basically the rules most were already following and largely expected.
It should be pointed out that the tax rate for bitcoins is LOWER than that of gold which is deamed a "collectible" to the IRS and subject to 28%.
Expected and taxable from the beginning, no doubt. Although taxes are never nice, the IRS provides clarification, which is good for business and investors.
Long term capital gains tax rates are between 0% and 20%, depending on income, much better than the "collector's" rate.
YES!!
Moar Bitcoin news!
Same goes for boating accidents, gold is lost at sea, casualty loss on income taxes....
Bitchez
Please! Please give us Bitcoiners more unenforcable laws! We care so much about them!
So Canadians worry about US tax law?
DaddyO
Do some research - this was already done to silver dealers in the 1970's.
Canadian Bitcoiners wouldn't care about Canadian Bitcoin laws either. We would just ignore them.
I fought the law and the law won
http://www.youtube.com/watch?v=CPXnoLAEUSQ&feature=kp
If it so easy for the IRS (Or anyone else, if you get my drift) to trace Bitcoin and Bitcoin transactions, why is it then that MtGox can "Lose" a Million of them without trace?
I don't. "Lose".. or hide? There is a big difference. Why you ask? Well to make out like a bandit that's why.
The hiding of the "funds" is only temporarily (the blockchain does not lie) but long enough for Karpeles to get away with the crime, while quietly selling enough to become filthy rich and with that untouchable.
This article lost me a "Land of the Free"
Where?
Just for the record, I always follow all applicable tax laws. I make a point of reporting any and all gains from my meager PM transactions, even when there is no paper trail for whatever reason.
I'm sure I speak for most of my fellow ZH'ers on this. We are a nation of laws or we are nothing.
I'm sure I speak for most of my fellow ZH'ers on this. We are a nation of laws or we are nothing.
I agree that we are a nation of laws or we are nothing, and we clearly aren't a nation of laws.
There were originally 12 good laws that made sense. Then a bunch of self-serving assholes showed up trying to enrich and empower themselves at everyone else's expense.
Yep, that whole law paradigm thing went out the door after 9/11 and especially after Obaomao. That said I still live by a good moral code and that splash you heard was simply me jumping out of the boat to take a bath. Ceasar has already got everything he will get out of me.
So aren't gold and silver coins different from this because it is actual US currency?
That is until the IRS comes up with the next line of BS regarding how to tax it...
Already covered it in the Ultimate Exit Strategy.
I don't know what that is. Do you have a link?
you can google Ultimate Exit Strategy, chris duane, silver shield, etc.
here's a link:
http://dont-tread-on.me/?p=8660
i don't especially care for chris duane as he is an arrogant, pompous ass, a wild-eyed fanatic, irrationally exuberant, kinda a jerk...basically an attitude of "if you don't believe exactly as i do, then you are the enemy!"
and i say that even though i beileve in putting a large % of net worth into physical silver just like he does.
i agree with much of what he has to say, but i find him hard to listen to.
I don't think my Maples count as currancy - at least in the US. . .
Anyone who didnt see everything in this article 10 miles off was asleep or dead
The rules are a big win for bitcoin. Much needed clarity. The mining opinion is bogus, however, and will be overturned by tax court if they don't revise it. Bitcoin is software. Making software (or any property) does not create income. Only selling the product creates a taxable event.
It's not a win or a loss. It's just nothing at all. America and its "laws" do not matter. The proof as they say, is in the pudding...
https://btc-e.com/
I think the thugs in customs with guns may disagree with you.
Do NOT fuck with the IRS. It is not worth it. Been there, done that. Nothing worse than little people with a little power that can make your life a living nightmare with nothing but a rubber stamp
The thugs in customs are about as dumb as some of the posters here. How would they find a Bitcoin client? And if it were a real concern why would it matter for a tech-savvy Bitcoiner?
How will they find you? Well, if you are driving a new Tesla on your grocery clerk salary and you get audited - you will have to show how you came up with the scratch for the car to get out of the penalty they already have warmed-up just for you.
So in other words, fonestar would have to be an idiot, flaunting his wealth, get caught chreating and have an auditor work backwards to establish where his gains came from?
Nah they just pick a number and make you prove it isn't the right one. If you can't you are completely fucked, if you can you are fucked as well.
Exactly. They don't have to prove anything. They don't even have to have the right person. They seize every single thing they can find first; your house, car, any fiat, wages, even your precious computer without which it's mighty hard to access your Bitcoin stash. Then the vaunted security of Bitcoin is used against you as proof of guilt. Then they put you in a cage for tax evasion. You have to prove, without access to any assets, that you are innocent. Sure, they're dumb. They know it too. That's why they have such immense power to smash you. Sets an example to the others, and tips the balance of power to them, despite their stupidity. Seriously, I had a tax attorney tell me that I'd be better off owing a lot of money to the Mob than to the IRS, because the Mob has an interest in keeping you on the string while the IRS would just as soon crush you; it's all the same to them.
Precisely - you could just never convert any of your BC millions into any of the trappings of a higher standard of living and you would probably be safe.
Ever seen Breaking Bad? Sure it's just a show -- but...
Walter had a whole lot of fucking money -- but that money was particularly hard-to-use. At times it seemed as if all of that 'jack' was nearly useless to the protagonist. This was an important part of the drama.
Dr. Sandi's Tax Tip #1
When hosting an IRS audit, park your Tesla at your neighbor's place.
Some people are only alive because it is illegal to kill them. Most of that group either work for government, or receive benefits from government.
Plus there is no lower tax rate for long term holders.
This is why I call BS on the main thrust of the article.
I can not wait to hear #PhoneyStars spin on this one
fonestar doesn't give a shit about laws! Neither do any other coiners.
+1 seconded!
as the brilliant doug casey says, there is only 1 law, and it has 2 parts.
part 1: "do what thou wilt" (quoting aleister crowley)
part 2: be prepared to accept the consequences
It's Part 2 that people have a problem with.
fonestar doesn't give a shit about laws!
-------------
So... That explains it... all your idiotic rants!
Of course, I hope you know... with a dumb statement like that...
(don't ever give them an excuse!)
Obozo and Holder will now destroy you...
The point where anything is tracked is when it is converted from or into bank notes. If you buy gold using cash without having to produce ID, you're pretty much safe. Some dealers require ID's, some don't, some are required to record ID's depending on transaction volume.
I talked to my bullion deler and asked how they tracked daily transaction volume with individual customers, curious what happened if the same person walked in few times throughout the day to buy/sell. He pointed at the security cameras and said they ran facial recognition software. He didn't say whether he had to share that data with the government, but I bet he did.
Buying and selling privately offers greater anonymity in exchange for greater risk - risk of getting mugged, or receiving fake metal or money.
There's risk in any transaction. There's risk in gold, there is risk in bitcoin.
You are tracked when you exchange one thing for another, especially if one of the things is an official government currency. If you can get pass the exchange barrier, then storing and hiding what you already own is almost a non-issue.
The governments will get more and more desperate.
They already tax anything that is produced.
They tax anything that changes hands.
They tax anything that moves.
That's basically it.
Go to a coin show and buy/sell a little with each dealer.
You can't smuggle bitcoins...
No need to. Like "god", they're omnipresent.
More accurately, you don't need to, because they are always available, everywhere there is a network connection.
No shit, Sherlock ! You don't seem to get it...
Unlike "God", EVERY bitcoin transaction if forever recorded and available. You can't hide it. IRS can track down every move you make in the virtual currency "realm".
Then, they'll send you the bill...
How the fuck do you think the IRS (or anyone else) would tie a Bitcoin address to a real person? You'd have to be a fuck up to the point of wanting to be caught.
Per my above post - they won't track bitcoins to people - they'll track asset purchases to incomes. If you dont' spend your bitcoins - you will probably be safe - if you start buying houses/cars/etc. using bc GAINS - then you are potentially in big trouble if you don't pay unto Caesar what is his. Your burden will then be to show that you didn't evade paying taxes.
Three words: Dread Pirate Roberts
And you missed the point with DPR. It cost the US government an isane amount of resources to track down a single person. Ok.. they needed to make their point, so they spent those resources.
And they were lucky.. DPR made some really dumb mistakes - hubris on his part - and he stilll has control of most of his Bitcoin resources. That means at some point in the future (even in jail) he might gain some leverage from having them. Unless they dump him some where like Gitmo.
It still took them a long time and a lot of resources, AND a sting operation.
All of this means that if you do not 'poke the bear' (which DPR definitely did), it is not worth their while to really attack you. So you are left with defending yourself against little power crazed bureaucats with license to bugger up your life.
If they attack, deny, deny, deny - advice given to me years ago by lawyer. Wear them down... keep extensive records of your fight... know that you will eventually lose, but do not just give in.
\sarc
Boating accidents do not happen... I have never been in a boat, never had a hard disk crash .... no not me ... never. Repeat after me, gold is not money. Bitcoin ? what is that.
/sarc
You've obviously never been audited.
fonestar, it was inevitable that controls over "alternative currencies" would come into play, and perhaps you're taken by surprise by the methods, so far.
There are two fundamental problems with your self-proclaimed fight on control (via BTC) -- you actually neglect points of control altogether, and you expect to personally benefit from it.
Said another way, your analysis is weak, and your motivation is suspect.
IRS can track down every move you make in the virtual currency "realm".
True... if you're an idiot.
You must be one of those smart asses that believe NSA (for example) cannot identify or track him/her...
LOL ! The joke's on you buddy.
Spend a few hours learning data security instead of following the stupid crowd.
Apparently they couldn't track Snowden.
simon black must be ignorant of the fact that US taxes on PMs are 28% capital gain, as they are classified and taxed as collectibles already.
I think his point is: the rules can change.
Swiftly and retroactively.
That 28% can become 98% in a heartbeat.
You're thinking the government sees a downside in THAT statement?
Gold and silver are transitional tools and not something to be sold to gold dealers at a profit.
Simon may not be thinking far enough ahead ...
... How long till the Washington elites vote for a Federal Property Tax?
They are going to tax your bank account next. It is called a bail-in. It is already happening. It is what Socialists do.
Tax, as in "confiscate".
Pretty sure they've already "bailed-in" the banks by way of printing money printing and ZIRP.
While true, they wouldn't have put the bail-in language into Dodd-Frank if they didn't plan on doing that, too.
So you get the printing tax, the ZIRP tax, and the bail in tax on your USD holdings in a bank.
Remember, they want all of your money.
yes.
as jim sinclair says, the cycle will consist of the great flushing, followed by the great levelling, followed by the great reset
the great flushing was lehman bros.
the great levelling is coming next, it will be the siphoning up of the remaining assets of the middle and even upper middle class, through bail-in, through myRA retirement asset confiscation, and the like.
What do you mean, "tax your bank account NEXT"?
Your bank account is taxed every time the Fed and their banking thugs create another dollar.
It's what greedy fuckin' bansters do!
So how about we/they default on this silly debt situation and no longer borrow from the fed thereby causing no need for for a debt collection agency as there is no debt.
Which is exactly the way they will take it if necessary. Why do you think DHS needs billions of hollow point rounds?
Better diversify some of that gold into brass lead and gunpowder.
Nope. Going to keep my gold buried in the ground. And get more when the value of it gets manipulated to $1000.00 US dollars an ounce, as the squid suggests it can be. Everyone, get ready to back up the trucks if the banksters are indeed successful. Just remember to keep it out of the system when you buy!
haven't you learned, silly muppet?
the squid suggests it's going to $1000 when they want you to sell because they are trying to buy.
Buy and sell for cash, and close your mouth!
There's a mistake in Tylers logic here.
They can't tax gold in Europe for example because it's taxfree to trade under current law and only current law of the act applies.
What the bitcoin rulling shows is that there was never a clasification for bitcoins and in this point, they have the law on their side.
Silver is also different than gold.
You've got the coins and the bars. The bars are industrial as is all generic silver.
So if you want to play it safe, sell the generic and buy philliharmonics which are the cheapest numis coins.
Also, the bitcoin rulling is about SELLING
Why would I sell my dilver or gold now for dollars or euro's when you know it's going to fall appart?
Re bullion bars, coins, fine-ness etc., there is a lot of jurisdiction-by-jurisdiction variation on how tax is (or isn't) applied. You need to research the matter for the specific locale where your own stash might be bought or sold.
South Africans and Amurikans in particular may want to stick with .999, or face some unpleasant surprises.
A tax on the "sale" of gold may never stand up in courts - even today's corrupt government-toadying ones - because according to the constitution, gold and silver ARE money.
The the gold is every converted at any point to FRNs, then you're fucked and the courts will uphold it. Once FRNs are involved they get to apply different (ie extra-constitutional) law to the case.
Agree about the Philharmonics....
How are they going to know what you bought gold at? There is no debt attached.
How will they know you bought BTC? Unless you did it like an ignorant noob, of course.
Simply meet your buyer in a public place and sell for cash only.
The buyer will need for you to identify yourself clearly with address, so that he has recourse should the purchased item be tungsten.
And if he's an IRS agent, he then has everything he needs.
Exactly.
People sell gold?
damn.. I threw it away... didn't know you could sell it...
Bernanke said it was barbaric and I didn't want anything to do with it anymore so I threw it ina lake...
Traditionally people just bury the stuff. Then, after 1500 years or so, some geek with a metal detector splits your hoard with whatever government is then calling the shots.
Unless it's Spain. You always lose it to Spain ... plus legal fees.
http://www.tampabay.com/news/business/odyssey-marine-ordered-to-pay-spai...
I never sell anything. If I didn't want it, I wouldn't have bought it in the first place.
Get "it: and "you" out of the land and of the "free and the brave", pronto!
At some point it will dawn on the American people that they are slaves. That no matter how hard they work, save, or plan they will end up over taxed, indebted, and desolate. At that point we will have change.
Uncle Sam will keep squeezing until we decide to cut off his nuts.
You didn't you say!
Auntie Sam has a nice ring to it.
you must be one of those foreigners that hate our freedom so much.
if you were a real american, you'd understand that slavery is freedom, and that ignorance is strength.
The masses would have to stop drinking the fluoride.
There aren't a lot of Bitcoin investors, but there are a lot of gold investors. If you do this on gold, you get a lot of angry people.
you get a black market
We're just about a banana republic already, so we might as well go all the way and drive everyone to the underground economy to make it official.
Get? Already there. And growing.
Why should laws be respected if they are only enforced selectively against the "little people"? Withdraw your consent.
The people that buy gold are investing, the people that have been buying BTC tulips have been/are speculating. Old uncle Sammy, you know him, the guy with the army, just decided he wants the BTC vig. Raise your hand if you've gone to a "we buy gold" shops and actually sold your phyz? The paper pushers (GLD/SLV) and BTC speculators are going to learn a tough lesson. Uncle Sammy says, "Fuck you, pay me!"
I see that Uncle Sam is a God to you.
He's a pompous idiot to the rest of us.
Bitcoin? What Bitcoin?
Lost them all in a tragic flash drive accident along with all my Gold when my houseboat, the H.M.S. Expatriate, sank.
In that case you declare a capital loss, and take the tax deduction (and yes, this would be fraud).
If you don't take the deduction, that's suspicious and they will investigate.
No escaping this. Largely, only bitcoin offers any sort of anonymity. You withdraw money in Macau, for the alleged purpose of gambling, and from there make your bitcoin purchase. The money seems to have disappeared into the blackjack table.
It's all anonymous, and can't be xrayed at the Macau airport or any other airport.
I wish them luck, I was directly over the Challenger Deep in the Pacific Ocean’s Marianas Trench.
I cried all the way back to San Diego.
If I mined 100 bitcoins at a cost basis of $100 back in 2011, and they were on Mt Gox at a value of $1000 a piece when the exchange lost them, do I claim capital losses of $1 million or $100?
Ex post facto? What's that?
They will call it a gold redemption fee.
The BIG SHIT is when it is a forced redemption.
and how are they going to force people? We have one of the most heavily armed populations in the world. Come to your house? Force you to hand it over? Yeah, that'll work.......first time that kind of thing hits the news, all hell will break loose.....
They do this by declaring it illegal to own.
Been done before.
http://en.wikipedia.org/wiki/Executive_Order_6102
Yes, that worked very well with alcohol and other stuff like weed. All kinds of shit is illegal to own. It is still owned.
The big difference IMHO is that due to it's nature, physical (!) gold is bought, sold and stored outside of the main stream financial system. That is also the main disadvantage of BTC's, they leave a big digital paper trail and you'll require a regular bank account in order to 'cash in.'
It's easy to monitor/scan bank accounts (they can always subcontract that to the NSA, hehe) for procedes of Bitcoin sales, but it's not so easy for the IRS to raid every home in the US and look around for a vault containing gold coins.
I guess that this is the very reason why governments and central banks are so much against gold and silver: they can't easily control it! (except for a bit of price manipulation)
As I describe above, you're 180 degrees wrong.
The gold is findable. BTC bought in Macau is not.
No one is going through the ordeal of buying and selling through Macau. Just stop it. LOL
Clearly you've never bought or sold crypto for cash.
Tax gold?? Rediculous. What's the point of that when Americans don't own gold? Capital gains is already paid on ETF 'gold' profits..
What gold?
"If you’ve ever read Currency Wars (a fantastic book by my colleague Jim Rickards), you may recall early in the book when Jim suggests a potential outcome for gold."
The only book you need to read to see what happens with gold is a history book; section FDR.
As for taxing all prior bitcoin transactions....g'luck.
So you've actually read it then?
And you think that the DOD have wasted their money and resources on the 'exercise' (DARPA-style program)? :-)
Capital Loss for me. My Gold American Eagles are legal currency with a face value of $50, but I spent $1300 to buy each one.
I don't give a shit what the lamborgini dealer does with the 190 Eagles I give him when he's charging $9500 (US Eagles) per car.
That angle was tried before in Las Vegas (guy was paying employees in gold coins.)
It did not go well, and they're still trying to make it work, and still failing at it.
http://www.lasvegassun.com/news/2013/dec/05/appeals-court-denies-dismiss...
http://www.reviewjournal.com/news/employers-gold-silver-payroll-standard...
You have it wrong I believe. The guy was acquited twice and the Feds keep coming back with a variation of the charges. Third time was a charm and they got a conviction which is being appealed. Triple jeopardy. The guy was right under the law while the feds are right under force of arms.
Bitcoin is a currency. How can you tax a currency? It's like trying to tax the profit you might make on your excess travel money that you converted at the airport, and then converted back to your base currency at some point.
The IRS are looking at bitcoin as an asset. It's not a store of value, it's a transactional currency.
oh I don't know, my employer hands me dollars, and they tax me on that just fine. By that logic they have no problem taxing currencies.
You're mixing up income tax and capital gains tax. The IRS is envisaging bitcoin wealth changes as a capital gain that should be taxed. This has nothing to do with income earned.
metals already have a 28% cap gains tax - so it would just be a cap gains tax increase - large tax increases discourage the behavior that incurs the tax - so people won't trade metals for things that cause a tax hit - or people will move out of the country like the wealthy French are doing, etc
" people will move out of the country like the wealthy French are doing, etc" Sorry but US citizens pay taxes to the US government no matter what. Even changing your citizenship will not help. And there is no privacy, and no bank will even talk to you if they even suspect you are in any way a "US Person". So tell me how does it feel to be a citizen of the most powerful nation in the world(TM). How does it feel to be all American?
It used to be awesome, but now it is starting to suck.
Rapidly being passed by being a Ukraine citizen.... If war breaks out...
Not too good.
Labels are NotApplicable.
Unfortunately, violent, coercive acts by individuals d.b.a. "The State" are.
There is a capital loss tax break for those whose investments went down to Davey Jones' locker.
Actually, heres how it works. If you have a gain or loss, it is a capital gain or loss. Sticking to the gains here for simplicity.
If the gain was from metals held one year or less, it is short term and taxed at whatever your ordinary rate is for that year. This could be anywhere from 0 (in years where you have little taxable income) to about 43% (if you had lots of other taxable income in the year of sale). Note this includes the new medicare tax on investment income for high earners.
If the gains were from metal held more than a year, it is a long-term capital gain from a collectible. The rate that will apply again depends on how much your taxable income is in the year of sale. It could be 0 (if the gain is small and you have little other taxable income) or as high as about 32% (if you had a big year and, again, this includes the new medicare tax). The special base cap gains rate of 28% applies only if your regular ordinary rate for the year is 28% or higher. If your ordinary rate for marginal income is less in the year of sale, the lower marginal rate in effect for that year will apply.
Btw, these gains can all be offset with other capital losses from sales of stock, etc. I figure many here may have such losses in mining shares.
Sorry for all this gibberish, but this is the abomination that is our fax code. Recorded these transactions a number of times.
So if you have bought and sold gold for a few decades at various prices and you sell the gold that you bought at $300 an ounce for $1200 and then tell the IRS but I sold the gold that I bought at $1400 an ounce last year and I am assuming a $200 loss (but you actually made $900). Kind of hard for IRS to prove unless you spend the $900, correct?
You are correct in choosing your "cost" for the sale of you coins. Two options available. First is "specific ID" on the lot sold. Thats where you show them the specific price you paid for the specific item you sold. Second is where you use a "weighted average" of all purchases of identical assets to determine the cost of the item sold.
Only item i would point out is that the IRS doesnt have to "prove" anything. All they have to do is question what you are reporting. We are the ones that have to "prove" it. Keep good records.
Keep your gold out of the system where they cannot see it. You will need your gold after the(their) collapse has taken place. During the collapse all you need will be your provisions and your rifle. Before we hit rock bottom you can keep playing the fiat game/stock market game and keep piling up gold and silver and removing them from view.
If you are into gold speculating that you will become rich someday in USD terms or something like that, you are delusional. The system as we know it will come to a very abrupt end. Buy, hold forget about selling now, when the USD is replaced by something else, maybe it will be time to consider selling your gold.
Ditto for cryptos... Not part of the system. Wait for the Reset/Crash.
And the next time u r on vacation outside the US, take some time to have fun with juggling your crypto accounts, and maybe converting one into another. You may have fun with Tumbling also. ;-)
The easy solution is to not be subject to the IRS, or not to be subject to the IRS, or not to be a subject of Potus
WIP for me, bitchez.
Won't work for Simon though, until he takes his own advice and gives up his USC (US Citizenship).
Of course with all his offshore assets and Residency, buying and selling Bitcoin is not a practical tax issue for him, but only a theoretical issue. Probably only a theoretical issue for most Americans also.
As I understand it, bullion, (gold or silver) is taxed as a "collectible" at a flat 28% -- no capital gains treatment. At lease 10 years ago Ron Paul tried to introduce legislation to have gold treated as a investment with long and short term cap gains treatment as with other investments. This never got out of committee. I think he tried it twice.
So it's 28%, long or short. Certain PM ETFs get LT/ST cap gains treatment.
yes, but can I claim my loss at the loving hands of the sea who took the PMs in a boating accident?
Beanie Baby tax!
I used to deduct LEGITIMATE things on our taxes. This year our tax person said basically, deduct at your own peril because they are coming after folks. it was not worth it to us to deduct and worry so we just left out the usual deductions because I cannot get a receipt for giving to AA....the whole fucking anonymous thing and all or tithing. My wife buys clothes for herself(medical). I am collecting every single receipt from here on out.
0% tax on bitcoin, 0% tax on gold, 0%tax on silver.
That's what the IRS will ever see from me.
The U-S already taxes the gains on gold/silver/platinum/fine wine/art/antiques/etc at the same cap gains rates mentioned in this article. States also have tax on sales of PMs/etc, at varying degrees and varying levels. So, what's new here? Help me. I'm just a blind beggar. What's said here that's news?
As detailed above.
Since I have never owned any PMs, I have not researched the law re tax on PM gains.... HOWEVER, intelligent-sounding sources have stated that a gain realized at the sale of PM is taxed at 28%, OR your own marginal tax rate in the year of the sale, WHICHEVER IS LOWER. For those who choose to keep their reportable income low, this could make a substatial difference.
If I am wrong with the above, I'd appreciate being corrected (since it will save me the trouble of further research).
Honestly I don't know. I hate anything to do with the tax code and know no more (and often less) than I need to. But that might work well in "retirement."
I would say that if what you say applies to "collectibles" it applies to PM gains. There is no special section for PMs they are just under the "collectibles" umbrella.
Funny, nothing "collectible" looking about a 1000oz silver bar, heh. But heh, they are the IRS and whatever they say is true is true.
Buy with cash and sell to a local dealer and accept cash only. If you have to show ID, make a fake one up.
Cue IRS phone call via NSA help in 3...2...1...