IRS Nabs Big Win Over Coinbase In Bid For Bitcoin Customer Data

a reply to: AugustusMasonicus

Arguable. According to the IRS estimates, there's about half a trillion a year in tax evasion.

Have you heard of skin gambling?

In video games, skin gambling is the use of virtual goods, which are most commonly cosmetic elements such as "skins" which have no direct influence on gameplay, as virtual currency to bet on the outcome of professional matches or on other games of chance. It primarily has occurred within the player community for the game Counter-Strike: Global Offensive by Valve Corporation, but practice of it exists in other game communities. Valve also runs the Steam marketplace which can be interfaced by third-parties to enable trading, buying, and selling of skins from players' Steam inventories for real-world or digital currency, though Valve itself condemns the gambling practices and such activity violates Steam's Terms of Service.

Valve added random skin rewards as part of an update to Counter-Strike: Global Offensive in 2013, believing that players would use these to trade with other players and bolster both the player community and its Steam marketplace. A number of websites were created to bypass monetary restrictions Valve set on the Steam marketplace to aid in high-value trading and allowing users to receive cash value for skins. Some of these sites subsequently added the ability to gamble on the results of professional matches or in games of chance with these skins, which in 2016 was estimated to handle around $5 billion of the virtual goods. These sites, along with Valve and various video game streamers, have come under scrutiny due to ethical and legal questions relating to gambling on sporting matches, underage gambling, undisclosed promotion, and outcome rigging. Evidence of such unethical practices was discovered in June 2016, and led to two formal lawsuits filed against these sites and Valve in the following month. Valve subsequently has taken steps to stop such sites from using Steam's interface for enabling gambling, leading to about half of these sites to close down, while driving more of the skin gambling into an underground economy.

a reply to: AugustusMasonicus

he topic is about capital gains/income which you are ignoring.

This topic is about the attempted control of decentralised currency by old failing centralized systems. Something you are ignoring.

a reply to: purplemer

There is truth in that but you have to remember that crypto currency is not that different from other currencies. In fact you could argue that the development of crypto currency is based on achieving the most desirable traits of common currency.

The original Bitcoin software by Satoshi Nakamoto was released under the MIT license. Most client software, derived or "from scratch", also use open source licensing.

Bitcoin is the first successful implementation of a distributed crypto-currency, described in part in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.

Bitcoins have all the desirable properties of a money-like good. They are portable, durable, divisible, recognizable, fungible, scarce and difficult to counterfeit.

bitcoin wiki

One also has to take into account the possibility that cryto currency will eventually be integrated in the regular financial system. Meaning things like fractional reserve banking are not out of the question. Especially since we've seen (proposed) forks or splits of crypto currency

So where does it end?

If I traded paperclips with a friend and somehow pulled off getting more, do I need to consider that a profit and do you think the IRS deserves a cut of that?

We seem to be making the claim that currency doesn't matter, but rather anything you make a profit off of.

It still seem that until the thing being traded or used is transferred to a currency that the government controls is when it is taxed.

So if no one actually converts BT into a $, how is it any different than trading paperclips?

originally posted by: jrod
I do not like your reasoning.

Your feelings are irrelevant. Capital gains taxes are mandatory for all American citizens.

originally posted by: theantediluvian
Arguable. According to the IRS estimates, there's about half a trillion a year in tax evasion.

Which leaves those people open for prosecution and recovery. None of this makes the point any less relevant, if you sell something for a profit you owe the IRS money.

originally posted by: purplemer
This topic is about the attempted control of decentralised currency by old failing centralized systems. Something you are ignoring.

The purpose of Bitcoin is irrelevant to the IRS, the sale for profit is and I don't really care about Bitcoin's raison d'etre.

originally posted by: Tempter
So where does it end?

If I traded paperclips with a friend and somehow pulled off getting more, do I need to consider that a profit and do you think the IRS deserves a cut of that?

We seem to be making the claim that currency doesn't matter, but rather anything you make a profit off of.

It still seem that until the thing being traded or used is transferred to a currency that the government controls is when it is taxed.

So if no one actually converts BT into a $, how is it any different than trading paperclips?

Like I said, many of you just don't seem to know the topic that well:

Bartering

Bartering is an exchange of property or services. You must include in your income, at the time received, the fair market value of property or services you receive in bartering. For additional information, Refer to Tax Topic 420 - Bartering Income and Barter Exchanges. The Internal Revenue Service always gets its pound of flesh.

originally posted by: AugustusMasonicus
a reply to: Riffrafter


Why shouldn't people pay taxes on their crypto-currency gains? I have to pay them on my other financial instruments and investments.

The fact that bitcoin is property and not a currency makes losses that much more difficult to write off, on the other hand. For the IRS, net capital (or property) losses are capped at $3,000 per year for married and single filers on personal tax returns.
www.investopedia.com...

So, should it be that the net capital GAIN be capped at $3,000 per year as well? You know, only to be fair?

a reply to: AugustusMasonicus

Your feelings are irrelevant. Capital gains taxes are mandatory for all American citizens.

Get over yourself..

Support the problem or the solution

your choice

originally posted by: StoutBroux
So, should it be that the net capital GAIN be capped at $3,000 per year as well? You know, only to be fair?

If the IRS considers it property and not an investment I don't really have a problem applying the same rules as other property. Why would I?

originally posted by: purplemer
Support the problem or the solution

your choice

The problem is people think they shouldn't pay taxes on gains from cryptos.

Oh, well, so sad, you do.

originally posted by: AugustusMasonicus

Your feelings are irrelevant. Capital gains taxes are mandatory for all American citizens.

Tell that to President Trump.

originally posted by: jrod
Tell that to President Trump.

Cool hyperbole, bro, maybe you can call the IRS and report him since they offer bounties.

a reply to: AugustusMasonicus

He is alreeady being audited...but in his words he doesn't pay his fair share in taxes because he is smart.

You have infested this thread hyperbole. Pot meet kettle.

The computer nerds who made bitcoin great will get around this. The IRS does not have the brainpower much less the man power to get the 'blackhats' on bitcoins.

originally posted by: jrod
He is alreeady being audited...

Oh, so you're saying if you don't pay capital gains and the IRS finds out it triggers an audit? Wow! Who knew.

Kinda proves my point, no.

a reply to: AugustusMasonicus

I completely see where you're coming from. Surprise surprise, you're not wrong. Gains made (US citizens) must pay a tax. The IRS would be foolish to ignore those gains made in the crypto market.

However, I would wager that there are folks not going through coinbase or even the US to avoid the IRS. It just happens to be Coinbase is the easiest route, and folks pay for that convenience, in more ways than one.

originally posted by: intrptr
a reply to: AugustusMasonicus

Under the radar insults aren't working, this time. You whined about how you have to pay taxes and bit coin doesn't. May I recommend another investment, like bitcoin?

Just because you have not been paying taxes on bitcoin profits doesn't men you don't owe them. And anyone who has made a lot from them is very likely to be audited because the irs tends to notice when someone becomes a millionaire with no discernible source of income. You pay a lot more once you get caught too.

This was of course inevitable, The IRS is going to do their best to be able to track any transaction that turns the crypto currency back into a normal currency. Really they have to because in a few years I think you will be able to buy anything using a crypto currency and they need to get their act together now or they will have a real hard time taxing anybody, which of course they cannot and will not allow.

PS bitcions tech is garbage, and it will be replaced by other crypto currency's very soon.

a reply to: proximo

PS bitcions tech is garbage, and it will be replaced by other crypto currency's very soon.

originally posted by: purplemer
a reply to: AugustusMasonicus

he topic is about capital gains/income which you are ignoring.

This topic is about the attempted control of decentralised currency by old failing centralized systems. Something you are ignoring.

Do you even know what you're proposing, you're against taxes, yet I bet you're for healthcare, roads, and Social Security. Guess what you can't have one without the other dummy.

When the new paradigm becomes the paradigm it will be taxed just like the old paradigm. This isn't rocket science.

In the real world things actually cost money and money does not grow on trees no matter what liberal fantasy you've heard.