IRS Rules Bitcoin Is Property, Not Currency • Hacker News Board

Re: IRS Rules Bitcoin Is Property, Not Currency

#21

Post by easy_rider » Thu, Mar 27, 2014, 12:20 AM UTC

gamblor956 wrote: post #19

easy_rider wrote: post #8

Earlier quoted context omitted.

And they can subtract their investments (e.g. handguns, crowbars ) from income tax.

You must pay taxes on all income, however earned. However, you are not entitled to deduct all expenses. Expenses related to criminal endeavors cannot be deducted. IOW...you are taxed on your gross criminal income.

I am basing this on remembering one case here in The Netherlands where this supposedly happened, when a bankrobber had to pay a sum of money, but he could put up his pistol as expenses. [1] The Districts Attorney's office was quoted on saying that in certain cases this could be done. Also stating that for example in the cultivation of marijuana, you get taxed for an estimated income amount. You could subtract your expenses n that estimation.

Maybe that's better in the U.S. then..

[1] http://www.nu.nl/algemeen/472183/crimineel-kan-pistool-decla...

Re: IRS Rules Bitcoin Is Property, Not Currency

#22

Post by mcherm » Thu, Mar 27, 2014, 4:55 PM UTC

lutusp wrote: post #11

mcherm wrote: post #9

So that means if I hold it over 1 year I can treat any gains as LONG TERM capital gains, right?

> So that means if I hold it over 1 year I can treat any gains as LONG TERM capital gains, right? The tax issues don't change because you've held an asset for Y years, it depends only on the date when you sell the asset. Remember that capital gains don't apply to assets that aren't sold -- this happens only when they're sold. Any asset held for longer than a calendar year is taxed as long-term capital gains, otherwis…

You have an odd way of phrasing it.

I would have said that the tax issues DO change because you've held an asset for Y years: if Y >= 1 year then you are taxed at one rate and if Y Regardless, the tax consequences are now clear.

Re: IRS Rules Bitcoin Is Property, Not Currency

#23

Post by lutusp » Thu, Mar 27, 2014, 5:12 PM UTC

mcherm wrote: post #22

lutusp wrote: post #11

Earlier quoted context omitted.

> So that means if I hold it over 1 year I can treat any gains as LONG TERM capital gains, right? The tax issues don't change because you've held an asset for Y years, it depends only on the date when you sell the asset. Remember that capital gains don't apply to assets that aren't sold -- this happens only when they're sold. Any asset held for longer than a calendar year is taxed as long-term capital gains, otherwis…

You have an odd way of phrasing it. I would have said that the tax issues DO change because you've held an asset for Y years: if Y >= 1 year then you are taxed at one rate and if Y Regardless, the tax consequences are now clear.

> I would have said that the tax issues DO change because you've held an asset for Y years: if Y >= 1 year then you are taxed at one rate and if Y Fair enough, but my point is that you aren't taxed at all until you sell the asset. People who haven't invested much don't get that, and it's an argument in favor of buy & hold.