IRS to tax Bitcoin as property

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Ok so the IRS and the FED want to corner the market and shut down Bitcoin. They are going to impose a tax on mining as well as selling, buying and even being paid in Bitcoin. I do not see this having the effect that they want it to have however.

I CAN see this allowing people to claim Bitcoin losses as "real" losses now that the government views it as property. Have they shot themselves in the foot by moving it out of the virtual realm or am I reading too much into this?

reply to post by 200Plus


so if this is virtual currency, and no one has access to your wallet. how are they going to know how much you got.
you can't go by credit or debit card records, because the value of the coins change up or down. and if you buy with a green dot visa, they have no way of knowing you bought them, unless they make the exchanges provide info. if that happens i see the exchanges shutting down.

reply to post by hounddoghowlie


Maybe shutting them down is the point. The fed hates competition after all.

You make very good points about the untraceable aspects of Bitcoin.

Maybe this is a way of shutting down the vendors who were accepting Bitcoin for transactions rather than individuals?

reply to post by 200Plus


i kinda think shutting it down is what the deal is. can't have people spending money or making any with out paying tax on it.

If you can't beat em, join em.

I think we should tear down the IRS building and replace it with a flag at half staff.

Surprised they didn't do this sooner,

Well this definitely let's me know for the first time that "they" really, really, don't like BTCs - but I don't think "they're" afraid of BTCs (because if you want to use them you're more than likely going to have to exchange them for a local paper currency that's still controlled by "them"). I don't think many people are trading with ONLY BTCs and keeping ONLY BTCs - they're exchanging them for paper currency and then using that to pay for whatever. IMO BTCs may be free from the banksters but they're not free from human greed and that's what they're mostly about even though they are not a tool for "them". People just want free stuff IMO and they'll do anything to get it. Sticking it to miners was kind of interesting as well - it's not going to make people using or investing in them smile that's for sure.

BTCs have more or less survived multiple soft crashes - and now "they're" going to plan B. But to repeat - I still think greed will be the biggest enemy to BTCs - and that's got nothing to do with TPTB and everything to do with humans.


(that was a lot of thems and theys)

reply to post by Floydshayvious


Nothing will ever be free of human greed. From flowers to cars, every thing is effected by human nature.

I am curious as to how this decision is going to work when another MT Gox event happens. Will the investors now be able to claim actual property loss rather than investment loss.

Years ago there was a rash of virtual property theft in the MMO-RPG community. Lawsuits and the whole nine. It was funny and judges ruled in most cases that virtual property was not real and did not constitute actual loss. I am curious if this ruling will change that (at least in the area of virtual currency - I doubt someone will steal my Frostmourne anytime soon )

onequestion
I think we should tear down the IRS building and replace it with a flag at half staff.

I'm with you but they don't deserve to be remembered with honor.

200Plus
reply to post by hounddoghowlie

 

Maybe this is a way of shutting down the vendors who were accepting Bitcoin for transactions rather than individuals?

200Plus
Years ago there was a rash of virtual property theft in the MMO-RPG community. Lawsuits and the whole nine. It was funny and judges ruled in most cases that virtual property was not real and did not constitute actual loss. I am curious if this ruling will change that (at least in the area of virtual currency - I doubt someone will steal my Frostmourne anytime soon

)

edit on 26-3-2014 by 200Plus because: (no reason given)

This is exactly whats going to happen, on both fronts. People are going to claim losses and the tax judges are going to cite past virtual property cases as a way to deny deductions from Bitcoin losses, BUT in the end, they will still have to pay taxes on the gains. They are also going to prosecute people accepting Bitcoins as payment under tax laws, whenever they want to because Bitcoins are now subject to backup withholding.

Its a win/win/win for government.

Here is a Q&A:

finance.yahoo.com...

Just wait till the first case reaches the Tax courts, I guarantee that Bitcoins will be found to NOT be capital assets in a majority of transactions, therefore eliminating the possibility of loss deductions. In fact, just mining a Bitcoin generates a tax bill, before you even get a chance to sell it, according to this IRS Q&A.

The IRS is bluffing, sadly most people will not see through it.
The only thing that they have any say in are transaction using federal reserve notes, say buying bitcoins with FRN or trading bitcoins 'for' FRN.