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How does Bitcoin work with tax?

Discussion in 'Business & Tax Advice' started by macdonjo3, Oct 9, 2013.

  1. macdonjo3

    macdonjo3 Jr. VIP Jr. VIP Premium Member

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    How exactly does tax tie into bit coins? Considering some merchants are starting to accept them as a payment method, I'm just wondering if they are paying income or including sales tax. It could be considered a trade: 3 bit coins for XYZ.

    I'm interested to hear some thoughts and opinions.
     
  2. RosuC

    RosuC Regular Member

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    For the moment for the bit coins there are not taxes, there is a court trial in US regarding this but for the moment there is no "nationality" for bit coins so they're not applying against any local laws. It has to be a new law that will affect most of the international currencies (like bit coins). I've read about these more and nothing that is talking about a tax regulation regarding bit coins
     
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  3. lancis

    lancis Elite Member

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    As long as you keep bitcoins (e.q. dont convert them to national currency) there is not tax atm.
    Some countries are pondering taxation of bitcoins. Those I know are: US, UK, Australia and Israel. However, its just a talk at the moment, and no actual taxation occurs.
     
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  4. MadStacks

    MadStacks BANNED BANNED

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    No way to tax bitcoins since they are not of any official currency of any country. Taxes need not apply.
     
  5. ArmoredMedia

    ArmoredMedia Junior Member

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    Once the BTC gets taxed, well if it does, wer're just gonna pop up with a new currency with no taxes...
     
  6. Ming the Merciless

    Ming the Merciless Jr. VIP Jr. VIP Premium Member

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    I would assume that any law made would have an umbrella to cover all virtual currencies.
     
  7. charlietree

    charlietree Registered Member

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    I am with the rest of everyone here...my understanding is that the reason Bitcoins are getting so popular is the ability for people to use currency that is virtually untraceable...which means even if they wanted to charge a tax on income earned, they would have to prove those bitcoins are yours and the owner is determined by who has possession at the time.
     
  8. lancis

    lancis Elite Member

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    Its not untraceable, thats an urban legend. :) Its just convenient, and the transaction fees are very low, compared to other payment methods.

    All the transactions are stored on the block chain. So if there is a point where you cash out (and have to provide your real name) all your history can be traced backwards and connected with your persona.
     
  9. JGOTTI

    JGOTTI Newbie

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    But how it can be traced then?
     
  10. lancis

    lancis Elite Member

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    Last edited: Oct 25, 2013
  11. wittyhat

    wittyhat BANNED BANNED

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    As long as you have funds in bitcoins, it is untaxable, but when it goes out in exchanging or converting, you need to show funds.
     
  12. hustleup

    hustleup Regular Member

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    theres ways of making it untraceable but im not saying that info here