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US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

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Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#141

Post by jaycroft »

rubyfan wrote: post #125
rubyfan wrote: post #78

Earlier quoted context omitted.

You don’t disclose assets to the IRS, only income. If you disclose your income and pay tax on it then convert it to BTC today you aren’t obliged to disclose it. In theory after you sell it you’d have a capital gain to disclose.

If I pay taxes on my income earned in USD, then exchange it for Euros. If the Euros had a better exchange rate to dollars later, would I have to declare a capital gain if I exchange back for USD? What if instead of exchanging I just spent the Euros?

If you are a US citizen, then yes to both questions. Trading any asset for another (which would include spending EUR for goods) creates a taxable event, on which you must declare your gain on the sold asset based on its fair market value at the time of exchange. There are exemptions for certain types of property (notably section 1031 like kind exchanges for real property).

I am not a tax attorney, and more specifically not your tax attorney, nor a certified accountant.

https://www.law.cornell.edu/uscode/text/26

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#142

Post by jaycroft »

jcranmer wrote: post #135
StanislavPetrov wrote: post #69

Earlier quoted context omitted.

>The top 20% are paying 95% of all income taxes, that will continue. You are comparing population with taxes, when you should be comparing wealth to taxes. Of course people in poverty with no tangible income or net worth don't pay income taxes. The wealthy in the US pay far, far less in taxes as a percentage of their wealth than any other developed nation in the world. In addition, the taxes paid by people in all civ…

If you look at the statement "The top X% of the population hold Y% of the wealth and pay Z% of the taxes," it turns out that Z > Y for most values of X.

Until you get to values of x below 1%...

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#143

Post by Tyrannosaur »

Taniwha wrote: post #134
em3rgent0rdr wrote: post #120

Earlier quoted context omitted.

operative word: "foreign". But your bitcoin wallet can exist entirely in US.

Yes, but where does the blockchain exist?

...on my hard drive? If I am running a node, that is.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#144

Post by mirimir »

tehlike wrote: post #136
mirimir wrote: post #131

Earlier quoted context omitted.

You might be surprised at what's available for Bitcoin. Servers and VPN services. Consultants. Plus stuff via dark markets.

So the very niche market. I guess my point is, still bitcoin is mostly speculation - the stuff you talk about wouldn't add up to billions of dollars of marketcap, for example.

Yes, of course it's mostly speculation.

But it's funny for someone on HN to be characterizing what I mentioned as "niche market". I mean, what more than capital, servers and consultants does one need for a startup?

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#145

Post by CryptoPunk »

jfoutz wrote: post #53
rothbardrand wrote: post #15

Earlier quoted context omitted.

And freedom. Remember, freedom is scary. To the downvoters: Seriously it is. For example: Can you imagine what would happen if we allowed people to have bars? People are expected to DRIVE to a BAR and DRINK! Can you imagine what people would do then, if we legalized the existence of bars? People would drive home drunk! Banning bars is obviously the right thing to do!

Drivers and bartenders are licensed. Cars and booze are registered. Requiring a higher standard for risky stuff is how we handle everything.

Drivers should be licensed because they're operating a vehicle on shared public property. That's not the same as creating a gatekeeper that imposes a blanket ban on entire categories of private voluntary exchange (e.g. selling alcohol) that are only lifted on a case-by-case basis if one is approved by that gatekeeper.

>>Requiring a higher standard for risky stuff is how we handle everything.

Not really. There are no laws restricting high-risk sexual practices. In the civil sphere, we correctly recognize that individual liberty trumps the personal risk and even public risk posed by risky actions.

It's only in the economic sphere where we restrict private exchanges, and that's because rejecting economic liberty is a necessary precursor to taxing the public and creating regulatory moats to protect industry incumbents from competition.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#146

Post by CryptoPunk »

Maarten88 wrote: post #72
CryptoPunk wrote: post #36

Earlier quoted context omitted.

It is a violation of privacy rights.

Is there any right to keep your possessions private from the tax agency? Last time I checked, everyone had to specify everything of value owned, and sign for it, to calculate capital taxes due (I live in the EU). This includes BTC holdings. We have to trust the tax agency to keep tax data confidential. It surprises me that the US needs to change laws to require this only now. I'd say the wording of the old laws were…

The income tax requires violating privacy rights, which is why many libertarians oppose it.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#147

Post by heimatau »

krrrh wrote: post #110
heimatau wrote: post #108

Earlier quoted context omitted.

Doesn't apply to crypto. Only have to report if the crypto is sold.

I guess the implication is that you have to report foreign assets specifically because it’s not easy for the IRS to obtain records from foreign financial institutions. Since it’s also not easy for them to obtain records from a decentralized crypto-currency then the same justification exists for adding these to a list of things you must report.

How do implications work? Are there lawsuits that have set a precedence?

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#148

Post by heimatau »

jimktrains2 wrote: post #119
heimatau wrote: post #108

Earlier quoted context omitted.

Doesn't apply to crypto. Only have to report if the crypto is sold.

Please stop using crypto to mean cryptographic currency. Crypto has a well defined meaning.

Fair but context implies I mean CC, as another mentioned. Meaning, devoid of context, is difficult to create. So, please, keep this in mind when you're nit-picking on what you mean.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#149

Post by sophont42 »

rothbardrand wrote: post #16
tfha wrote: post #10

Is there any evidence of Bitcoin being used by terrorist groups? Wouldn't that be a terrible idea for the terrorists?

Yes, it is a terrible idea for terrorists. And currently, bitcoin is too hard to use for terrorists or most criminals. You have to be relatively sophisticated. Yah, you may have gotten your grandma a wallet, but that's not the same as mastering the level of opsec to fund a clandestine organization using cryptocurrencies... And further, since every transaction is recorded forever in the blockchain if any future addres…

Yep, and Obama’s shipped a pallet directly to a state sponsor of terror. Why use BTC?

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#150

Post by tehlike »

mirimir wrote: post #144
tehlike wrote: post #136

Earlier quoted context omitted.

So the very niche market. I guess my point is, still bitcoin is mostly speculation - the stuff you talk about wouldn't add up to billions of dollars of marketcap, for example.

Yes, of course it's mostly speculation. But it's funny for someone on HN to be characterizing what I mentioned as "niche market". I mean, what more than capital, servers and consultants does one need for a startup?

Why do you need bitcoin for that? I don't see the relation.
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