How does Bitcoin work with tax?

macdonjo3

macdonjo3

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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.
 
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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
 
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.
 
No way to tax bitcoins since they are not of any official currency of any country. Taxes need not apply.
 
Once the BTC gets taxed, well if it does, wer're just gonna pop up with a new currency with no taxes...
 
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.
 
charlietree said:
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.
Click to expand...

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.
 
JGOTTI said:
But how it can be traced then?
Click to expand...

You can see yourself here: http://blockchain.info/largest-recent-transactions

The transactions and the amount of bitcoins in each wallet are a public info.
 
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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.
 
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