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(CNN)   Yes, the IRS has the power to tax your Bitcoin. Unless, of course, you declare yourself a sovereign citizen first. That stops them cold   (cnn.com) divider line
    More: Obvious, Taxation, Taxation in the United States, virtual currency, principal federal tax analyst, state revenue department, capital gain, Tax, taxable income  
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2348 clicks; posted to Main » on 12 Apr 2021 at 2:50 PM (4 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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ZAZ [TotalFark]
2021-04-12 1:15:24 PM  
The IRS has been bluffing for years now. Nobody is going to believe them until a few traders are indicted for tax evasion.
 
2021-04-12 2:24:55 PM  
Not with a fringed flag!
 
2021-04-12 2:27:52 PM  
It depends on HOW you have your bitcoin.  Do you have your bitcoin, or do you HAVE your bitcoin?  There's a big difference.

The IRS will see it when you withdraw it in any case, all the dollars in the world get reported back to Washington these days.
 
2021-04-12 2:28:36 PM  

ZAZ: The IRS has been bluffing for years now. Nobody is going to believe them until a few traders are indicted for tax evasion.


The IRS isn't so much for enforcement any more as it is a weapon.
 
2021-04-12 2:51:54 PM  
Sounds like they understand the techology.
 
2021-04-12 2:51:55 PM  
Tax my BTC? I'm going to read the article but if it says it is taxing FIAT that was generated by a BTC sale, I'm going to be very disappointed in subby.
 
2021-04-12 2:53:12 PM  

Marcus Aurelius: ZAZ: The IRS has been bluffing for years now. Nobody is going to believe them until a few traders are indicted for tax evasion.

The IRS isn't so much for enforcement any more as it is a weapon.


You mean "investigation".  Add a column incorrectly and they will catch it guaranteed.
 
2021-04-12 2:56:49 PM  
But what if the sovereign citizen is on a public road traveling and not driving?
 
amb
2021-04-12 2:58:39 PM  
If you bought the bitcoin, I don't think IRS should care until you sell it. It is a non-interest/non-dividend security, so not a concern until it is resold for a gain, similar to holding a stock. If you mined it, then I think it might be considered revenue or income. Probably can deduct the cost of mining, and if you are a business can depreciate the equipment.

Don't have any, so haven't looked too hard into the tax implications, but that is how I would expect it works.
 
2021-04-12 2:58:53 PM  

Hoblit: Tax my BTC? I'm going to read the article but if it says it is taxing FIAT that was generated by a BTC sale, I'm going to be very disappointed in subby.


Okay... sure... but where do I send my BTC payments to the IRS because I sure as H3LL don't owe them any American Dollars while it's still virtual cryptocurrency. I mean, where is the cut-off line on how much it gained or lost ... who chooses that line or is it by quarter's end?

It's not cute how the government wants a cut from my money, even when it isn't just gains on exchange rates.
 
2021-04-12 2:59:47 PM  
This would be far less confusing if Cryptocurrencies were handled on futures and exchanges as money ( a la forex ) instead of people trying to pump it and trade it like stock and ETFs.
 
2021-04-12 3:00:26 PM  
That's a bit of a complicated one. Unless you can pay the tax in bitcoin, wouldn't that force a sale every time to convert to a currency the tax bill can be paid in?

You could call it...
<puts on sunglasses>
A Bit of a Vicious Cycle....
 
2021-04-12 3:00:26 PM  
The IRS has the power to do any damn thing they want.
 
2021-04-12 3:03:14 PM  

amb: If you bought the bitcoin, I don't think IRS should care until you sell it. It is a non-interest/non-dividend security, so not a concern until it is resold for a gain, similar to holding a stock. If you mined it, then I think it might be considered revenue or income. Probably can deduct the cost of mining, and if you are a business can depreciate the equipment.

Don't have any, so haven't looked too hard into the tax implications, but that is how I would expect it works.


You need to also realize that some admiralty flag fringe is taxable, and some is not.  My friend could advise you but he's very expensive, and needs to be paid in cash up front.
 
2021-04-12 3:05:06 PM  

ZAZ: The IRS has been bluffing for years now. Nobody is going to believe them until a few traders are indicted for tax evasion.


Yeah but the fun thing about cryptocurrencies is once the IRS is able to start associating transactions with actual people, everyone who owe taxes as a result is in for a nasty surprise.

That disclosure line at the top of the filing means failure to report = fraud.
 
2021-04-12 3:05:17 PM  
The IRS legal standard is as follows:  they throw your bitcoin into a pool of water.  If it sinks, it's considered a taxable asset.  If it floats, it's considered a sea vessel operating on a navigable body of water, and you are a passenger on said vessel, subject only to maritime law and not taxable.  In fact, the IRS may not harass or impede you as a sovereign citizen and your transportation of the bitcoin.

Why yes, I have been drinking this fine Monday afternoon.
 
2021-04-12 3:07:38 PM  

Hoblit: Hoblit: Tax my BTC? I'm going to read the article but if it says it is taxing FIAT that was generated by a BTC sale, I'm going to be very disappointed in subby.

Okay... sure... but where do I send my BTC payments to the IRS because I sure as H3LL don't owe them any American Dollars while it's still virtual cryptocurrency. I mean, where is the cut-off line on how much it gained or lost ... who chooses that line or is it by quarter's end?

It's not cute how the government wants a cut from my money, even when it isn't just gains on exchange rates.


It's property.  If you buy property using $ and realize a gain in $ from the sale of property (or exchange for goods), the IRS is rightfully going to expect a cut of the action.
 
2021-04-12 3:08:40 PM  

steklo: But what if the sovereign citizen is on a public road traveling and not driving?


Then they should have their passport yoinked and delivered to the international departure's lounge at the airport.
 
2021-04-12 3:11:43 PM  
But you have to declare it. And it doesn't count if you don't say "hereby".
 
2021-04-12 3:13:42 PM  

Rapmaster2000: Sounds like they understand the techology.


They do.  It's just not treated simply like money like so many people believe it is. It's an asset similar in some ways to property. What people don't think about is when you "buy" something with BTC you are converting it and when you do, you are realizing any gains you made since you acquired your BTC.
 
2021-04-12 3:14:40 PM  

Ignoramist: It's property.  If you buy property using $ and realize a gain in $ from the sale of property (or exchange for goods), the IRS is rightfully going to expect a cut of the action.


If I exchange one piece of property for another, that's untaxed barter. The IRS doesn't tax me if I trade a classic Chevy Camaro for someone's Honda Odyssey van if I feel the sports car has to go and I need a reliable ride for my family. Someone gets the Camaro and I get the Odyssey: an exchange of property for property is untaxed barter.
 
2021-04-12 3:15:45 PM  
An IRS agent reacting to "Sovereign Citizen" tax advice:
Fark user imageView Full Size
 
2021-04-12 3:16:39 PM  
Ah am not operatin' a moder vehicle.

I is "travelin"!!!11!

/ one of my personal favorites
 
2021-04-12 3:19:14 PM  

mrmopar5287: Ignoramist: It's property.  If you buy property using $ and realize a gain in $ from the sale of property (or exchange for goods), the IRS is rightfully going to expect a cut of the action.

If I exchange one piece of property for another, that's untaxed barter. The IRS doesn't tax me if I trade a classic Chevy Camaro for someone's Honda Odyssey van if I feel the sports car has to go and I need a reliable ride for my family. Someone gets the Camaro and I get the Odyssey: an exchange of property for property is untaxed barter.


Only if it's a like-kind exchange. https://www.irs.gov/busines​ses/small-b​usinesses-self-employed/like-kind-exch​anges-real-estate-tax-tips I have no idea if different types of cars count though.

In your scenario, you likely aren't paying any tax because vehicles don't increase in value as they get older. You only pay tax on gain. If your Camaro had increased in value, and you traded it for something other than money, you would have realized the gain and had to pay tax on it.
 
2021-04-12 3:20:40 PM  

mrmopar5287: Ignoramist: It's property.  If you buy property using $ and realize a gain in $ from the sale of property (or exchange for goods), the IRS is rightfully going to expect a cut of the action.

If I exchange one piece of property for another, that's untaxed barter. The IRS doesn't tax me if I trade a classic Chevy Camaro for someone's Honda Odyssey van if I feel the sports car has to go and I need a reliable ride for my family. Someone gets the Camaro and I get the Odyssey: an exchange of property for property is untaxed barter.


Note to self: Do NOT hire mrmopar5287 to do my taxes. See Form 1099-B
 
2021-04-12 3:22:26 PM  

amb: If you bought the bitcoin, I don't think IRS should care until you sell it. It is a non-interest/non-dividend security, so not a concern until it is resold for a gain, similar to holding a stock. If you mined it, then I think it might be considered revenue or income. Probably can deduct the cost of mining, and if you are a business can depreciate the equipment.

Don't have any, so haven't looked too hard into the tax implications, but that is how I would expect it works.


That's the long and short of it.

Buying butts?  Non-taxable.
Being paid in butts?  Ordinary income at the market rate.
Selling or paying in butts?  Capital gain or loss depending on the price difference.
 
2021-04-12 3:22:28 PM  

Ignoramist: Hoblit: Hoblit: Tax my BTC? I'm going to read the article but if it says it is taxing FIAT that was generated by a BTC sale, I'm going to be very disappointed in subby.

Okay... sure... but where do I send my BTC payments to the IRS because I sure as H3LL don't owe them any American Dollars while it's still virtual cryptocurrency. I mean, where is the cut-off line on how much it gained or lost ... who chooses that line or is it by quarter's end?

It's not cute how the government wants a cut from my money, even when it isn't just gains on exchange rates.

It's property.  If you buy property using $ and realize a gain in $ from the sale of property (or exchange for goods), the IRS is rightfully going to expect a cut of the action.


Yes, I realize that.

But the article isn't limiting it to gains and that's the part I have a problem with.
 
2021-04-12 3:22:41 PM  
Until bitcoins are converted to cash (or traded for something with real value), they are worthless.  I don't see how they can tax something with a value that is only theoretical.
 
2021-04-12 3:22:55 PM  

huntercr: Rapmaster2000: Sounds like they understand the techology.

They do.  It's just not treated simply like money like so many people believe it is. It's an asset similar in some ways to property. What people don't think about is when you "buy" something with BTC you are converting it and when you do, you are realizing any gains you made since you acquired your BTC.


Are you talking about the legal conversion of properties, or the technical aspects of a bitcoin transaction?
 
2021-04-12 3:23:59 PM  
Give us a break. Cryptocurrencies are for tax avoidance, money laundering, and buying things on the black market.

Period.

Well, that's ignoring the immense amount of pollution and wasted energy needed to mine them.
 
2021-04-12 3:25:24 PM  

mrmopar5287: Ignoramist: It's property.  If you buy property using $ and realize a gain in $ from the sale of property (or exchange for goods), the IRS is rightfully going to expect a cut of the action.

If I exchange one piece of property for another, that's untaxed barter. The IRS doesn't tax me if I trade a classic Chevy Camaro for someone's Honda Odyssey van if I feel the sports car has to go and I need a reliable ride for my family. Someone gets the Camaro and I get the Odyssey: an exchange of property for property is untaxed barter.


I hope you don't file your own taxes:
https://www.irs.gov/newsroom/four-thi​n​gs-you-should-know-if-you-barter

There is no such thing as 'untaxed barter'.  Barter is indeed taxed, and the rules that govern camaro-vs-odyssey barter are exactly the same as bitcoin-vs-pizza barter.
 
2021-04-12 3:25:47 PM  
This is why the government needs to do away with paper money.  Taxes.  We need each person to be issued a federal ID/debit card.  All money must be transacted through the card.  That way ALL transactions are properly tracked and validated.

Ban bitcoin and crypto, and ban paper money.  Problem solved.
 
2021-04-12 3:28:19 PM  

frogblast: https://www.irs.gov/newsroom/four-thi​n​gs-you-should-know-if-you-barter


That's for businesses. I worked at an oil change place where they wanted the asphalt driveway resealed. The asphalt guy agreed to do it in exchange for a few oil changes in his trucks. They should fill those forms out (but most likely did not).

Barter between individuals (not businesses) is a separate issue.
 
2021-04-12 3:29:16 PM  

OgreMagi: Until bitcoins are converted to cash (or traded for something with real value), they are worthless.  I don't see how they can tax something with a value that is only theoretical.


The IRS doesn't particularly care why there's a thriving market for Beanie Babies, only that there is a thriving market for Beanie Babies.
 
2021-04-12 3:31:17 PM  

mrmopar5287: frogblast: https://www.irs.gov/newsroom/four-thin​gs-you-should-know-if-you-barter

That's for businesses. I worked at an oil change place where they wanted the asphalt driveway resealed. The asphalt guy agreed to do it in exchange for a few oil changes in his trucks. They should fill those forms out (but most likely did not).

Barter between individuals (not businesses) is a separate issue.


You take delight in being wrong about everything, don't you?
 
2021-04-12 3:32:39 PM  

mrmopar5287: frogblast: https://www.irs.gov/newsroom/four-thin​gs-you-should-know-if-you-barter

That's for businesses. I worked at an oil change place where they wanted the asphalt driveway resealed. The asphalt guy agreed to do it in exchange for a few oil changes in his trucks. They should fill those forms out (but most likely did not).

Barter between individuals (not businesses) is a separate issue.


It's a pretty short page.  Right at the top:

The IRS reminds all taxpayers that the fair market value of property or services received through a barter is taxable income.
 
2021-04-12 3:32:49 PM  

AmbassadorBooze: This is why the government needs to do away with paper money.  Taxes.  We need each person to be issued a federal ID/debit card.  All money must be transacted through the card.  That way ALL transactions are properly tracked and validated.

Ban bitcoin and crypto, and ban paper money.  Problem solved.


Getting rid of being able to bet your friend a dollar on trivial events would be terrible. And that isn't taxable, as that money was already taxed. Getting rid of privacy without suspicion of a crime is never good.
 
2021-04-12 3:34:33 PM  
The IRS is on top of things. I get calls every day telling me I'll be arrested if I don't send them some iTunes gift cards.
 
2021-04-12 3:35:04 PM  

OldJames: AmbassadorBooze: This is why the government needs to do away with paper money.  Taxes.  We need each person to be issued a federal ID/debit card.  All money must be transacted through the card.  That way ALL transactions are properly tracked and validated.

Ban bitcoin and crypto, and ban paper money.  Problem solved.

Getting rid of being able to bet your friend a dollar on trivial events would be terrible. And that isn't taxable, as that money was already taxed. Getting rid of privacy without suspicion of a crime is never good.


If you have nothing to hide, why do you care?  We have a problem, un taxed trade using paper money and crypto.  The ONLY solution is to ban paper and crypto and make all legit transactions go through the government servers.
 
2021-04-12 3:36:18 PM  

TheGreatGazoo: Then they should have their passport yoinked


No card carrying sovereign citizen would ever apply for a passport.
 
2021-04-12 3:36:32 PM  

BenSaw2: Ah am not operatin' a moder vehicle.

I is "travelin"!!!11!

/ one of my personal favorites


What's ridiculous is that I'm always getting pulled over for speeding while traveling. Those signs are for drivers, not travelers.

/don't get me started on my license plates!
 
2021-04-12 3:42:30 PM  
Fark user imageView Full Size
 
2021-04-12 3:49:04 PM  

mrmopar5287: frogblast: https://www.irs.gov/newsroom/four-thin​gs-you-should-know-if-you-barter

That's for businesses. I worked at an oil change place where they wanted the asphalt driveway resealed. The asphalt guy agreed to do it in exchange for a few oil changes in his trucks. They should fill those forms out (but most likely did not).

Barter between individuals (not businesses) is a separate issue.


So, if I (an individual) agree to build a new garage on your property for $50k worth of BTC, it's a barter that shouldn't be taxed?

Pretty sure the IRS would see that as "income," regardless of the currency being used.
 
2021-04-12 3:50:48 PM  

AmbassadorBooze: If you have nothing to hide,


Spoken like a true fascist.
 
2021-04-12 3:51:05 PM  

radiovox: The IRS has the power to do any damn thing they want.


Unless you're rich and have tax lawyers.
 
ZAZ [TotalFark]
2021-04-12 3:55:42 PM  

OgreMagi: Until bitcoins are converted to cash (or traded for something with real value), they are worthless.  I don't see how they can tax something with a value that is only theoretical.


You don't owe taxes on the theoretical value of your bitcoin.  It's the same rule as for stocks.  Taxes are deferred until you dispose of the property.
 
2021-04-12 4:04:24 PM  

steklo: But what if the sovereign citizen is on a public road traveling and not driving?


You mean walking?  Pedestrians still have to pay capital gains taxes on your bitcoin sales, but if you get audited the IRS agent might show mercy since you're too broke to afford a car.
 
2021-04-12 4:08:50 PM  

balko: mrmopar5287: Ignoramist: It's property.  If you buy property using $ and realize a gain in $ from the sale of property (or exchange for goods), the IRS is rightfully going to expect a cut of the action.

If I exchange one piece of property for another, that's untaxed barter. The IRS doesn't tax me if I trade a classic Chevy Camaro for someone's Honda Odyssey van if I feel the sports car has to go and I need a reliable ride for my family. Someone gets the Camaro and I get the Odyssey: an exchange of property for property is untaxed barter.

Note to self: Do NOT hire mrmopar5287 to do my taxes. See Form 1099-B


I think they're conflating "you generally don't get caught doing this" with "it's ok to do this".

Capital gains is capital gains.
 
2021-04-12 4:12:23 PM  

frogblast: mrmopar5287: frogblast: https://www.irs.gov/newsroom/four-thin​gs-you-should-know-if-you-barter

That's for businesses. I worked at an oil change place where they wanted the asphalt driveway resealed. The asphalt guy agreed to do it in exchange for a few oil changes in his trucks. They should fill those forms out (but most likely did not).

Barter between individuals (not businesses) is a separate issue.

It's a pretty short page.  Right at the top:

The IRS reminds all taxpayers that the fair market value of property or services received through a barter is taxable income.


Ah, but mrmopar is not an individual, he's a meat popsicle.

He's also not done farking this particular chicken.
 
2021-04-12 4:13:12 PM  

Marcus Aurelius: ZAZ: The IRS has been bluffing for years now. Nobody is going to believe them until a few traders are indicted for tax evasion.

The IRS isn't so much for enforcement any more as it is a weapon.


I don't understand. Isn't taxation a good thing?  Or only when it happens to the OTHER guy?

/You're always "rich" to someone else
 
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