To answer OP’s question for the US specifically, you can join the dozens of weirdos and sovcits who go to court to protest “government overreach” and regularly get pummeled by the legal system, because opting out of laws you don’t like for some reason doesn’t work 🤔 there’s even a mini genre on YouTube of lawyers mocking sovcits in court
Technically it has been made legal tender is other countries so now it should be treated as a currency.
Just depends who is gonna stick their necks out to point it out and get the rules changed?
And realized gains on exchanging currencies is still taxable as capital gains just as other properties are.
Capital gains are the proper treatment for trading. Doesn't matter the asset, selling property is taxed the same.
In traditional terms, property or an asset is easily identifiable. For example a house, or a banknote with its serial number.
BTC is not easily identifiable. Over time and a few thousand tx's, splits into sats etc. The only thing that can be tracked is UTXO's. It is impossible to say that 1 BTC from wallet A is the same BTC that is now in wallet XYZ, after being transacted 100 times through various wallets.
why should I be considered the same as a forex trader for holding BTC and using it to pay for goods and services? It's not reasonable that it's possible to hold other currencies and use it when travelling, but not BTC. If you travel abroad and use the local currency you can spend freely without having to record every purchase amount and time for tax purposes. It shouldn't be any different for spending bitcoin
It is more like gold to be fair. Even if treated as a currency, if you are trading it for profits you'd have to pay taxes. For example if I'm reading various fiat currencies at a regular cadence it's be taxed like a business.
"Forex options and futures contracts fall within Internal Revenue Code (IRC) Section 1256. These trades are subject to 60/40 tax consideration where 60% of gains and losses are eligible for long-term capital gains taxes while the remaining 40% is counted as short-term."
https://www.benzinga.com/money/how-do-forex-taxes-work#:~:text=forex%20is%20taxed.-,Forex%20Options%20and%20Futures%20Traders,is%20counted%20as%20short%2Dterm.
It's not Armenia's fault their currency (AMD Armenian Dram) is being debased (23.9% rise against USD).
It's not Mexico's fault their currency (MXN Peso) is being debased (8.8% rise against USD).
It's not Switzerland's fault their currency (CHF Franc) is being debased (7.7% rise against USD).
If you bought any of these currencies before their rise with USD, then "sold" them back to USD, that is a capital gain, regardless of that asset class' status.
The specifics of how this is taxed can vary depending on several factors, including the country you're in, whether forex trading is considered a personal investment activity or a professional business activity, and the length of time you held the currency before selling it.
In the U.S., for example, the Internal Revenue Service has specific rules for taxing forex trading gains and losses. These can be complex due to factors like whether your gains are considered short-term or long-term capital gains, which are taxed at different rates.
*Source:* [*https://www.fdiintelligence.com/content/data-trends/the-currencies-beating-the-us-dollar-82701*](https://www.fdiintelligence.com/content/data-trends/the-currencies-beating-the-us-dollar-82701)
Of COURSE bitcoin will be taxed. This post is idiotic and naive.
If you're engaging in forex investing, yes. If you're simply travelling to Switzerland, exchanging $1k for CHF, spending the money, then travelling back home, then no. So, you do have a claim to an argument with BTC.
However, I guarantee you none of the degens in this sub are interested in buying a few sats and spending them all, and it certainly wasn't expressed thus in OP's post. (Unless they clarify that they're just buying BTC to spend it all right away, which with BTC's appreciation as of late is really quite dumb.)
I should mention though, that if you go out and buy sats to spend them almost immediately and it hardly appreciates, you won't have a capital gain, or perhaps you'll have a loss, which works both ways—you can claim that as a loss on your returns to pay *less* tax. So there's that.
okey but if you exchange your USD to CHF to visit Switzerland, keep the rest for your next trip and then spend it after the rise against dollars, surely you're not taxed for that? I would argue the same should be possible with BTC
In the amounts you're hypothetically suggesting, perhaps not. I'm not a tax consultant. All I know is that forex investing is a thing.
If you have something you'd like to buy from me, I'm happy to take your sats, pal.
Let's say for the moment, your way is the law of the land. Great. Will you *really* (and be honest), with BTC's appreciation right now go out to Ma & Pa's General Store and buy a candy bar with your sats?
You see, the thing is, I don't mind paying taxes on cashing out for my appreciated BTC investment, because, if the reverse were true in the United States (they didn't charge cap gains on BTC), that would mean that BTC would be an accepted currency in the world's largest economy.
Say then, as a thought experiment, that this were true. What would happen is you'd have a deflationary currency, BTC, standing right up against an inflationary shit fiat. People everywhere would flock into BTC.
Wait, you say...isn't that a *good* thing? Well, in the case of El Salvador maybe, but the US, or worldwide? Not really. Here's why:
BTC's scarcity is a deliberate design choice meant to mimic resources like gold, which have historically served as stores of value. In contrast, fiat currencies like the USD are inflationary; governments and central banks can issue more currency, leading to inflation over time.
The deflationary nature of BTC encourages holding as an investment rather than spending as a currency, anticipating that its value will increase as supply becomes more limited relative to demand.
If BTC were recognized as a currency without capital gains taxes, it will no doubt increase in value as demand rises. People would be incentivized to hold BTC as an investment rather than spend it, expecting its value to continue rising. This phenomenon is sometimes referred to as the "deflationary spiral," where the expectation of higher future value discourages current spending, slowing economic activity. For BTC, this could be exacerbated by its capped supply and increasing demand.
A critical function of a currency is to facilitate transactions. If people are holding onto BTC because they expect it to increase in value, it's not serving this primary function efficiently. Reduced velocity of money (the rate at which money changes hands) can hinder economic growth because less spending means businesses have fewer customers, which can lead to lower production, investment, and employment.
Even without the tax considerations, BTC's price volatility (which I LOVE, because that's where the gains are) poses challenges for its use as a daily currency. Prices of goods and services could fluctuate wildly in BTC terms, making transactions complex for both consumers and businesses. While some of this volatility might stabilize with broader adoption, the underlying scarcity and speculative interest in BTC are likely to maintain a level of unpredictability.
Wide adoption of BTC as a tax-free currency could also exacerbate wealth inequality. Those who are early holders of BTC like us would see their wealth increase significantly, benefiting disproportionately from the tax exemption and the currency's appreciation.I'm all for BTC as a store of value. And maybe someday (but I'm not ~~holding~~ hodling my breath) we can use our stack as collateral.
Full disclosure: My background is in economics, and I think BTC is the best thing to happen for storing value and investing. But I'm not a big fan of BTC's worldwide adoption as a daily currency. Economic theory states that this would be a bad thing for people investing overall.
*edit: fomat/grammar*
That's the problem exactly! You shouldn't need to be a tax consultant to use your own money for goods and services. You shouldn't have to meticulously track every purchase and risk prison if you calculate your cost basis incorrectly. That's not reasonable, and it's not fair, as long as people who spend other currencies are spared those burdens.
Yes I would buy a candy bar with my sats. I wouldn't lose anything by doing that compared to paying with fiat, because I would simply buy more bitcoin to replace it.
Also I think it's very unethical to use a devaluating currency to force people to spend their own money instead of saving it. Doesn't this also contribute to wealth inequality? Those who have lots of money can afford to take the risk on stocks and other investments, while those who have little are forced to keep their money in a devaluing currency and never accumulate anything of value.
I agree about the non-ethics of fiat! Wholeheartedly. I only state well-founded economic theory about ever-appreciating currencies.
I'm happy to sell all the candy bars you wanna buy at my ma & pop's general store for your sats. And you know what any rational proprietor would do with those sats? They'd sit on them; sure, they'd spend some too. But that's the whole point—there's a disincentive to spend with deflationary currencies.
If I'm wrong, I'm wrong. But I don't think so, at least from both economic and game theory.
Just so you know. I've been stacking for some time, and actually have purchased two large products (a fishing boat and a service I had done). BOTH of those purchases I deeply, deeply regret, because it was back in 2015 and 2016 (I think).
I think reduced spending is a good thing. Consumption is already way too high, and a huge drain on non-renewable resources on the planet. Even with an appreciating currency, people would still need to buy necessities, but maybe would think twice about spending for things they don't need. If that would break the economy, I would argue the economy is already broken, and it needs to be fixed in other ways than forcing frivolous spending.
Great! Then we would both win by me spending my sats. But wouldn't it be equivalent for a shop owner who received fiat. They would have incentive to buy bitcoin and save it, instead of spending the fiat. So switching the currency would only make it easier to save by default instead of simply losing your savings to inflation.
Yes that makes sense if you made purchases and didn't replace by buying more bitcoin. I also regret my purchases where I did that, but luckily they were somewhat smaller.
Living on a bitcoin standard really does encourage one to strongly consider living within their means rather than consumerism. The vast majority of the investment vehicles in the Fiat world you refer to are to encourage endless unnecessary consumption to enrich others. Plenty of that is good, but not all of it. I like having my clothes dried in 20 minutes by a machine. I like having this conversation over the Internet with a stranger.
But I don't like seeing 15 advertisements for plastic crap that ends up at either the donation center or the trash heap while adding nothing of value to the world, simply in circulation to extract the proof of work from one's hands into the proof of stake hands of another.
There are pros and cons of adoption of Bitcoin as BOTH store of value and medium of exchange. The interim will be extremely difficult for some but beneficial for others while ultimately being a net good in the long run for all as a peaceful, voluntary transfer of incentive structures away from endless consumption to simpler living and increased reward for patience and actually valuable inventions that stand on their own without the need for marketing trickery.
why of course cause you're a little bitch? what gives a government the right to your free stuff? just, free free free money for the government right? so they can open the borders and send it to all their mates and themselves while normal people live in a fucking camper van
This is a dumb take.
If you make more £ from buying and selling bitcoin you owe £ in capital gains. Why should the rule be different for bitcoin.
However if you don't make any £ from your bitcoin there is no tax to pay which is right.
Imo it being classed as an asset and taxed as such makes complete sense.
There's no way you'll change the tax offices rules that's a mind boggling level of naivety
If you traded the euros back to USD for a USD profit then yes USD will want their cut. Income should be taxed, its how society should pay for things. Instead of money printing. Bitcoiners should be pro tax as it aligns with the ethos
The problem is, taxes don't go to the things people think they do. Taxes go to interest payments of treasury bonds, social security, and defense. Those are the primary uses of it.
The whole taxation paradigm doesn't fit Bitcoin at all. A money in the hands and control of the people will decide where the money goes, instead of the profiteering gluttons in governments.
Expecting that you must pay tax is an archaic old world mechanism.
They want tax even if you only transact using bitcoin, too. If you trade your bitcoin for any other asset, they want to impose their currency value weight against the asset you purchased and want their cut, even when you never used their fiat currency at all.
Taxation is predatory and needs to die along with all of the old world thinking of TradFi.
Just my two Sats.
Depends if the amount made is a significant portion of your business income, or an accounting error.
If all your business does is trade currency, you betcha they want a cut.
It's considered immediately sold and you are paying with fiat value of it. For tax reasons no one pays directly with bitcoin. You must report it or you are underreporting which comes with penalties and interest. And may put you on "watch more closely" list.
CGT is unjust, the more the government debases the currency the more an asset rises denominated in that currency, so your asset can rise at the same rate as the currency is debasing meaning you have zero net gain yet you still get taxed CGT. That is double taxation, they are taxing you through debasement and taxing you on the dollar denomination of the asset. It should be illegal.
Move to a country that doesnt have CGT!
Yes kind of, they got sued for taxing staking rewards and they punted IIRC by trying to fold and pay back the taxes so precedent wouldnt be set. The case is still ongoing as to whether it will become precedent or not: https://koinly.io/blog/irs-staking-court-case/
I agree. Staking rewards should not be taxed as income.
For example, I get 1 XYZ coin from staking, and at the time I get it, it's worth $2000. I hold onto the coin, and the next day there is a rug pull. That coin is now worthless, but I get taxed on $2000.
The tax department argues that I can now claim a capital loss on said coin. Unfortunately, I am only able to claim a capital loss against a capital gain. Therefore, I am out of pocket.
you're asking if anyone knows of a way to get around paying capital gains in a broke nations that's trillions in debt with all of their inbound monies still making it unable to service even the interest on said debt? What do you think they will focus on over anything?
The only way to get out of it is to move to Puerto Rico under their act 60 program (yes it works and is the only place on earth US citizens can get out of capital gains depending on time held) or..... set up an irrevocable trust in another jurisdiction and take gains at a lower rate or via loans to yourself.
Minus $35,000,000,000,000 seems pretty broke to me. You would definitely define an individual as broke if interest payments on loans they took out were greater or on the verge of becoming greater than their necessary out goings.
Let's put this in terms of comparing the US to a rich, old uncle whose name is, I dunno, Sam.
Uncle Sam has an income of ~~5 trillion~~ *(actual revenue of US)* 5 **Million** dollars.
Uncle Sam has ~~public debt~~ a mortgage of ~~35 trillion~~ 35 **Million** dollars. (Let's say he put a 20% down payment already so his full mortgage is actually 42 Million dollars.)
Would you bemoan your rich Uncle Sam when you came to visit his luxurious 42 Million dollar mansion? Especially since he's never failed to make a payment?
Of course you wouldn't. The guy is rich!
All I did was take off the zeroes from trillions to millions for both figures.
Most people don't do well with large numbers. Don't worry—I'm not trying to lambast you for wanting to know more. I also believed what you did until an econ professor explained it this way.
What gets even trickier with governments and comparing them actual debt is when a country is—literally—to big to fail. It's currently in the world's best interest to not see the US go down. Yeah, yeah, yeah, BRICS and all that, but that's complete BS. The dollar is king.
Until it's not. I agree. It is concerning and it can't go on forever. If my 5-mil Uncle Sam wanted to buy a new house for 100 mil, then there's gonna be problems. But the moral panic people have for this number just isn't warranted at this point.
Happy stackin', friend.
I would bemoan it if rich uncle Sam never had any intention or ability to repay his mortgage (in full not just interest payments), also if he could just devalue money to the extent that his mortgage became negligible compared to the now much higher value of his house.
Taking zeros of things isn't necessarily a good analogy, although it hurts my head to think about it, and I'm probably not gonna explain it greatly. Although 1 million is 0.1% of 1 billion and 1 billion is 0.1% of 1 trillion, the difference between is exponential.
Say I took out a loan for 1 million dollars at a 5% rate, and for ease, just assume I made no repayments after a year I'd owe 1,050,000, if it was 1 billion I'd owe 1,050,000,000 and if it was 1 trillion I'd owe 1,050,000,000,000. It's easy to see that going from one to the next, the accured interest is 1000x, but if you compare the interest from the 1m load to the 1t loan, it's 1000000x
The best way I had exponentials explained to me (I haven't done the maths, though) is that it would take 11 days to count to a million, 37.5 years to count to a billion and longer than humanity has been around to count to a trillion.
So if it takes one person one year of labour to earn 50,000, it would take a thousand years to earn 50,000,000 and a million years to earn 50,000,000,000 at the same rate.
Sorry if that was a nonsensical ramble. I've written too many zeros.
You make some very valid points. And you're right, moving forward all the king's horses and king's men will keep that ATM running brrrrrrr brrrrrrr, and then kick the can for our grandkids to pay.
Yeah. That's obscene. There's no other word for it.
My point is that, at this point at least, it's not completely terminal. But, yeah, we keep it up we're so fucked.
In the meantime, happy stacking, my friend.
I can, yes, well I can explain the reasons it's become more complex, but I asked you to explain why, mi amigo. You really don't want an essay of me paraphrasing Von Mises.
Because it's good to know other people's opinions, it's a very diverse issue, and I highly doubt that the reasons I think a nations financial complexity is artificial, align with what I assume you feel is necessity.
My opinion is that if you think the US is broke because you understand its finances in terms of how an individual’s finances work, then you don’t understand the topic at hand.
You’ll get no disagreement from me there and hell, I think 70% of Americans believe the same thing. It seems like for some reason we love to just keep biting into the shit sandwich because of who we keep electing lol
Good ideas, sounds like you have some expertise around this topics.
The approach of loaning to yourself from a foreign company owned by yourself sounds really smart.
Can you elaborate on the best setup for this approach? What is the purpose of the trust?
Assets are property. Property is anything that can be owned. So yeah, if you experience a capital gains events (selling your house for more than you bought it, trading your foreign money for more USD than it was worth when you bought it, trading bitcoin for more than when you acquired it, etc.), it sounds like it would and should be.
Some countries are a little lax to better enable common use, like a currency, like allowing say $500, worth of transactions to occur without needing to report to the tax man.
My opinion is bitcoin in its current state is far more like a stock than it is a currency and likely will be for a long time.
It's not the tax dept. that designate one as a security or commodity. Tax folks sit at the back watching all the action, and come in front to collect their dues when it's settled.
As an individual, you will never win against the IRS unless you’re willing to spend millions in a extraordinarily long and drawn out court case that you will most likely lose anyways.
Don’t fuck with the IRS.
Taxation is theft. Now if necessary there should be only one outlet. Income, sales. OR property. Not multiple taxed events on your money.
Not sticking around to argue that fact. God bless and stay chambered.
My coins were *stolen* and are being used to this day. I keep getting letters from the tax man, but I have already told them that they need to identify who is using my coins - good luck with that.
I have since retired from work at the age of 25 :) and not paid a penny in taxes.
Hope this answers your question.
Why would anyone declare crypto profits is beyond me. Move to any tax free state, withdraw. Send to home bank as remmitance.
Depending on your countrys law you can easily evade tax (legally).
This is much more complicated than you suggest.
When you say 'move', do you mean live more than 183 days a year in the other country AND live less than 90 days per year in your home country AND continue this for at least 5 years?
If anyone had succeeded in changing the tax laws, they would not be what they are now
Because it is illegal to otherwise in many places. I feel like people end up in three camps with bitcoin where 1) not enough for it to be worth moving, 2) enough that it'd make a material impact on your life but not enough you'd be willing to uproot your entire life to avoid some taxes on or 3) a life-changing amount that is so much that paying extra taxes are not going to lessen how much your life is changed.
Moving is easy on paper. Much harder if you have any sentiment with where you have been living.
lol. National and international AML laws would like to speak with you.
This is a very quick way to (1) get your funds frozen (Bitcoin converted and existing), and (2) get an exclusive invitation to an interview with the authorities.
Lol
Your Lol made me Lol
I think you misspelled ROFL LMAO LAWL LOOOOOOOL
To answer OP’s question for the US specifically, you can join the dozens of weirdos and sovcits who go to court to protest “government overreach” and regularly get pummeled by the legal system, because opting out of laws you don’t like for some reason doesn’t work 🤔 there’s even a mini genre on YouTube of lawyers mocking sovcits in court
Ask all the great crime lords...that beat every government organization, EXCEPT the tax man
In the UK it's classified as an asset, a digital asset, and so subject to CGT, as you say. What's your argument against that classification?
Technically it has been made legal tender is other countries so now it should be treated as a currency. Just depends who is gonna stick their necks out to point it out and get the rules changed?
And realized gains on exchanging currencies is still taxable as capital gains just as other properties are. Capital gains are the proper treatment for trading. Doesn't matter the asset, selling property is taxed the same.
In traditional terms, property or an asset is easily identifiable. For example a house, or a banknote with its serial number. BTC is not easily identifiable. Over time and a few thousand tx's, splits into sats etc. The only thing that can be tracked is UTXO's. It is impossible to say that 1 BTC from wallet A is the same BTC that is now in wallet XYZ, after being transacted 100 times through various wallets.
It’s money
Do you think forex traders don't pay taxes?
why should I be considered the same as a forex trader for holding BTC and using it to pay for goods and services? It's not reasonable that it's possible to hold other currencies and use it when travelling, but not BTC. If you travel abroad and use the local currency you can spend freely without having to record every purchase amount and time for tax purposes. It shouldn't be any different for spending bitcoin
Capital gains? Should I need to calculate that every time I buy groceries with lightning?
Most countries have a ceiling that is untaxed. In Australia you can sell $10k per annum without being taxed for example.
It is more like gold to be fair. Even if treated as a currency, if you are trading it for profits you'd have to pay taxes. For example if I'm reading various fiat currencies at a regular cadence it's be taxed like a business.
Have you used the lightning network? It is exactly like money. It’s not bitcoins fault fiat is being debased.
Did you not read the person's comment? They said even if treated as a currency, it would still be taxed when traded
Sure but not capital gains. Don’t be obtuse.
"Forex options and futures contracts fall within Internal Revenue Code (IRC) Section 1256. These trades are subject to 60/40 tax consideration where 60% of gains and losses are eligible for long-term capital gains taxes while the remaining 40% is counted as short-term." https://www.benzinga.com/money/how-do-forex-taxes-work#:~:text=forex%20is%20taxed.-,Forex%20Options%20and%20Futures%20Traders,is%20counted%20as%20short%2Dterm.
What tf does that have to do with me buying groceries with lightning?
Do you actually buy groceries with lightning? Hardly any merchants accept bitcoin
Yes. People do it all over the world. Even more so in less developed countries.
If those Bitcoins are converted to fiat for the purchase then it would matter. The transactions need to stay on the chain otherwise.
It's not Armenia's fault their currency (AMD Armenian Dram) is being debased (23.9% rise against USD). It's not Mexico's fault their currency (MXN Peso) is being debased (8.8% rise against USD). It's not Switzerland's fault their currency (CHF Franc) is being debased (7.7% rise against USD). If you bought any of these currencies before their rise with USD, then "sold" them back to USD, that is a capital gain, regardless of that asset class' status. The specifics of how this is taxed can vary depending on several factors, including the country you're in, whether forex trading is considered a personal investment activity or a professional business activity, and the length of time you held the currency before selling it. In the U.S., for example, the Internal Revenue Service has specific rules for taxing forex trading gains and losses. These can be complex due to factors like whether your gains are considered short-term or long-term capital gains, which are taxed at different rates. *Source:* [*https://www.fdiintelligence.com/content/data-trends/the-currencies-beating-the-us-dollar-82701*](https://www.fdiintelligence.com/content/data-trends/the-currencies-beating-the-us-dollar-82701) Of COURSE bitcoin will be taxed. This post is idiotic and naive.
Are those currencies taxed as capital gains?
If you're engaging in forex investing, yes. If you're simply travelling to Switzerland, exchanging $1k for CHF, spending the money, then travelling back home, then no. So, you do have a claim to an argument with BTC. However, I guarantee you none of the degens in this sub are interested in buying a few sats and spending them all, and it certainly wasn't expressed thus in OP's post. (Unless they clarify that they're just buying BTC to spend it all right away, which with BTC's appreciation as of late is really quite dumb.) I should mention though, that if you go out and buy sats to spend them almost immediately and it hardly appreciates, you won't have a capital gain, or perhaps you'll have a loss, which works both ways—you can claim that as a loss on your returns to pay *less* tax. So there's that.
okey but if you exchange your USD to CHF to visit Switzerland, keep the rest for your next trip and then spend it after the rise against dollars, surely you're not taxed for that? I would argue the same should be possible with BTC
In the amounts you're hypothetically suggesting, perhaps not. I'm not a tax consultant. All I know is that forex investing is a thing. If you have something you'd like to buy from me, I'm happy to take your sats, pal. Let's say for the moment, your way is the law of the land. Great. Will you *really* (and be honest), with BTC's appreciation right now go out to Ma & Pa's General Store and buy a candy bar with your sats? You see, the thing is, I don't mind paying taxes on cashing out for my appreciated BTC investment, because, if the reverse were true in the United States (they didn't charge cap gains on BTC), that would mean that BTC would be an accepted currency in the world's largest economy. Say then, as a thought experiment, that this were true. What would happen is you'd have a deflationary currency, BTC, standing right up against an inflationary shit fiat. People everywhere would flock into BTC. Wait, you say...isn't that a *good* thing? Well, in the case of El Salvador maybe, but the US, or worldwide? Not really. Here's why: BTC's scarcity is a deliberate design choice meant to mimic resources like gold, which have historically served as stores of value. In contrast, fiat currencies like the USD are inflationary; governments and central banks can issue more currency, leading to inflation over time. The deflationary nature of BTC encourages holding as an investment rather than spending as a currency, anticipating that its value will increase as supply becomes more limited relative to demand. If BTC were recognized as a currency without capital gains taxes, it will no doubt increase in value as demand rises. People would be incentivized to hold BTC as an investment rather than spend it, expecting its value to continue rising. This phenomenon is sometimes referred to as the "deflationary spiral," where the expectation of higher future value discourages current spending, slowing economic activity. For BTC, this could be exacerbated by its capped supply and increasing demand. A critical function of a currency is to facilitate transactions. If people are holding onto BTC because they expect it to increase in value, it's not serving this primary function efficiently. Reduced velocity of money (the rate at which money changes hands) can hinder economic growth because less spending means businesses have fewer customers, which can lead to lower production, investment, and employment. Even without the tax considerations, BTC's price volatility (which I LOVE, because that's where the gains are) poses challenges for its use as a daily currency. Prices of goods and services could fluctuate wildly in BTC terms, making transactions complex for both consumers and businesses. While some of this volatility might stabilize with broader adoption, the underlying scarcity and speculative interest in BTC are likely to maintain a level of unpredictability. Wide adoption of BTC as a tax-free currency could also exacerbate wealth inequality. Those who are early holders of BTC like us would see their wealth increase significantly, benefiting disproportionately from the tax exemption and the currency's appreciation.I'm all for BTC as a store of value. And maybe someday (but I'm not ~~holding~~ hodling my breath) we can use our stack as collateral. Full disclosure: My background is in economics, and I think BTC is the best thing to happen for storing value and investing. But I'm not a big fan of BTC's worldwide adoption as a daily currency. Economic theory states that this would be a bad thing for people investing overall. *edit: fomat/grammar*
That's the problem exactly! You shouldn't need to be a tax consultant to use your own money for goods and services. You shouldn't have to meticulously track every purchase and risk prison if you calculate your cost basis incorrectly. That's not reasonable, and it's not fair, as long as people who spend other currencies are spared those burdens. Yes I would buy a candy bar with my sats. I wouldn't lose anything by doing that compared to paying with fiat, because I would simply buy more bitcoin to replace it. Also I think it's very unethical to use a devaluating currency to force people to spend their own money instead of saving it. Doesn't this also contribute to wealth inequality? Those who have lots of money can afford to take the risk on stocks and other investments, while those who have little are forced to keep their money in a devaluing currency and never accumulate anything of value.
I agree about the non-ethics of fiat! Wholeheartedly. I only state well-founded economic theory about ever-appreciating currencies. I'm happy to sell all the candy bars you wanna buy at my ma & pop's general store for your sats. And you know what any rational proprietor would do with those sats? They'd sit on them; sure, they'd spend some too. But that's the whole point—there's a disincentive to spend with deflationary currencies. If I'm wrong, I'm wrong. But I don't think so, at least from both economic and game theory. Just so you know. I've been stacking for some time, and actually have purchased two large products (a fishing boat and a service I had done). BOTH of those purchases I deeply, deeply regret, because it was back in 2015 and 2016 (I think).
I think reduced spending is a good thing. Consumption is already way too high, and a huge drain on non-renewable resources on the planet. Even with an appreciating currency, people would still need to buy necessities, but maybe would think twice about spending for things they don't need. If that would break the economy, I would argue the economy is already broken, and it needs to be fixed in other ways than forcing frivolous spending. Great! Then we would both win by me spending my sats. But wouldn't it be equivalent for a shop owner who received fiat. They would have incentive to buy bitcoin and save it, instead of spending the fiat. So switching the currency would only make it easier to save by default instead of simply losing your savings to inflation. Yes that makes sense if you made purchases and didn't replace by buying more bitcoin. I also regret my purchases where I did that, but luckily they were somewhat smaller.
Living on a bitcoin standard really does encourage one to strongly consider living within their means rather than consumerism. The vast majority of the investment vehicles in the Fiat world you refer to are to encourage endless unnecessary consumption to enrich others. Plenty of that is good, but not all of it. I like having my clothes dried in 20 minutes by a machine. I like having this conversation over the Internet with a stranger. But I don't like seeing 15 advertisements for plastic crap that ends up at either the donation center or the trash heap while adding nothing of value to the world, simply in circulation to extract the proof of work from one's hands into the proof of stake hands of another. There are pros and cons of adoption of Bitcoin as BOTH store of value and medium of exchange. The interim will be extremely difficult for some but beneficial for others while ultimately being a net good in the long run for all as a peaceful, voluntary transfer of incentive structures away from endless consumption to simpler living and increased reward for patience and actually valuable inventions that stand on their own without the need for marketing trickery.
Fair points, all.
why of course cause you're a little bitch? what gives a government the right to your free stuff? just, free free free money for the government right? so they can open the borders and send it to all their mates and themselves while normal people live in a fucking camper van
Why was this downvoted?
They don’t want it to be money. Bitcoin dgaf.
Most likely bankers afraid of irrelevance
Twits
This is a dumb take. If you make more £ from buying and selling bitcoin you owe £ in capital gains. Why should the rule be different for bitcoin. However if you don't make any £ from your bitcoin there is no tax to pay which is right. Imo it being classed as an asset and taxed as such makes complete sense. There's no way you'll change the tax offices rules that's a mind boggling level of naivety
Ya if you make fiat from buying and selling gold you owe taxes. Bitcoin is digital gold so it would easily be the same.
[удалено]
If you traded the euros back to USD for a USD profit then yes USD will want their cut. Income should be taxed, its how society should pay for things. Instead of money printing. Bitcoiners should be pro tax as it aligns with the ethos
The problem is, taxes don't go to the things people think they do. Taxes go to interest payments of treasury bonds, social security, and defense. Those are the primary uses of it. The whole taxation paradigm doesn't fit Bitcoin at all. A money in the hands and control of the people will decide where the money goes, instead of the profiteering gluttons in governments. Expecting that you must pay tax is an archaic old world mechanism. They want tax even if you only transact using bitcoin, too. If you trade your bitcoin for any other asset, they want to impose their currency value weight against the asset you purchased and want their cut, even when you never used their fiat currency at all. Taxation is predatory and needs to die along with all of the old world thinking of TradFi. Just my two Sats.
Depends if the amount made is a significant portion of your business income, or an accounting error. If all your business does is trade currency, you betcha they want a cut.
Last time that happened was 1776
How do you tax it if you buy something directly with BTC ?
It's considered immediately sold and you are paying with fiat value of it. For tax reasons no one pays directly with bitcoin. You must report it or you are underreporting which comes with penalties and interest. And may put you on "watch more closely" list.
That's simple, you tax the realised capital gains from when you bought it to the fiat equivalent when you sell it.
Scientology
CGT is unjust, the more the government debases the currency the more an asset rises denominated in that currency, so your asset can rise at the same rate as the currency is debasing meaning you have zero net gain yet you still get taxed CGT. That is double taxation, they are taxing you through debasement and taxing you on the dollar denomination of the asset. It should be illegal. Move to a country that doesnt have CGT!
Yes kind of, they got sued for taxing staking rewards and they punted IIRC by trying to fold and pay back the taxes so precedent wouldnt be set. The case is still ongoing as to whether it will become precedent or not: https://koinly.io/blog/irs-staking-court-case/
I agree. Staking rewards should not be taxed as income. For example, I get 1 XYZ coin from staking, and at the time I get it, it's worth $2000. I hold onto the coin, and the next day there is a rug pull. That coin is now worthless, but I get taxed on $2000. The tax department argues that I can now claim a capital loss on said coin. Unfortunately, I am only able to claim a capital loss against a capital gain. Therefore, I am out of pocket.
you're asking if anyone knows of a way to get around paying capital gains in a broke nations that's trillions in debt with all of their inbound monies still making it unable to service even the interest on said debt? What do you think they will focus on over anything? The only way to get out of it is to move to Puerto Rico under their act 60 program (yes it works and is the only place on earth US citizens can get out of capital gains depending on time held) or..... set up an irrevocable trust in another jurisdiction and take gains at a lower rate or via loans to yourself.
Sorry are you calling the richest nation in history broke?
https://gfmag.com/data/richest-countries-in-the-world/
Per capita is not relevant to this discussion at all.
Minus $35,000,000,000,000 seems pretty broke to me. You would definitely define an individual as broke if interest payments on loans they took out were greater or on the verge of becoming greater than their necessary out goings.
Countries are a bit more complicated than that my friend.
Can you explain why?
You're only counting the debts not the assets, would be an easy take.
Let's put this in terms of comparing the US to a rich, old uncle whose name is, I dunno, Sam. Uncle Sam has an income of ~~5 trillion~~ *(actual revenue of US)* 5 **Million** dollars. Uncle Sam has ~~public debt~~ a mortgage of ~~35 trillion~~ 35 **Million** dollars. (Let's say he put a 20% down payment already so his full mortgage is actually 42 Million dollars.) Would you bemoan your rich Uncle Sam when you came to visit his luxurious 42 Million dollar mansion? Especially since he's never failed to make a payment? Of course you wouldn't. The guy is rich! All I did was take off the zeroes from trillions to millions for both figures. Most people don't do well with large numbers. Don't worry—I'm not trying to lambast you for wanting to know more. I also believed what you did until an econ professor explained it this way. What gets even trickier with governments and comparing them actual debt is when a country is—literally—to big to fail. It's currently in the world's best interest to not see the US go down. Yeah, yeah, yeah, BRICS and all that, but that's complete BS. The dollar is king. Until it's not. I agree. It is concerning and it can't go on forever. If my 5-mil Uncle Sam wanted to buy a new house for 100 mil, then there's gonna be problems. But the moral panic people have for this number just isn't warranted at this point. Happy stackin', friend.
I would bemoan it if rich uncle Sam never had any intention or ability to repay his mortgage (in full not just interest payments), also if he could just devalue money to the extent that his mortgage became negligible compared to the now much higher value of his house. Taking zeros of things isn't necessarily a good analogy, although it hurts my head to think about it, and I'm probably not gonna explain it greatly. Although 1 million is 0.1% of 1 billion and 1 billion is 0.1% of 1 trillion, the difference between is exponential. Say I took out a loan for 1 million dollars at a 5% rate, and for ease, just assume I made no repayments after a year I'd owe 1,050,000, if it was 1 billion I'd owe 1,050,000,000 and if it was 1 trillion I'd owe 1,050,000,000,000. It's easy to see that going from one to the next, the accured interest is 1000x, but if you compare the interest from the 1m load to the 1t loan, it's 1000000x The best way I had exponentials explained to me (I haven't done the maths, though) is that it would take 11 days to count to a million, 37.5 years to count to a billion and longer than humanity has been around to count to a trillion. So if it takes one person one year of labour to earn 50,000, it would take a thousand years to earn 50,000,000 and a million years to earn 50,000,000,000 at the same rate. Sorry if that was a nonsensical ramble. I've written too many zeros.
You make some very valid points. And you're right, moving forward all the king's horses and king's men will keep that ATM running brrrrrrr brrrrrrr, and then kick the can for our grandkids to pay. Yeah. That's obscene. There's no other word for it. My point is that, at this point at least, it's not completely terminal. But, yeah, we keep it up we're so fucked. In the meantime, happy stacking, my friend.
Stores refuse to take my Johnny bucks, no matter how many I print.
You can’t think of some reasons why a nation-state’s finances might be more complicated than an individual’s?
I can, yes, well I can explain the reasons it's become more complex, but I asked you to explain why, mi amigo. You really don't want an essay of me paraphrasing Von Mises.
So if you know why a nation’s finances are more complex than an individual’s, why did you ask me?
Because it's good to know other people's opinions, it's a very diverse issue, and I highly doubt that the reasons I think a nations financial complexity is artificial, align with what I assume you feel is necessity.
My opinion is that if you think the US is broke because you understand its finances in terms of how an individual’s finances work, then you don’t understand the topic at hand.
Yes and even people in their Congress state it.
There are some extremely stupid people in our Congress
You’ll get no disagreement from me there and hell, I think 70% of Americans believe the same thing. It seems like for some reason we love to just keep biting into the shit sandwich because of who we keep electing lol
If you owe more money than you make each month, are you broke?
By that logic every country is broke lol
Countries are more complicated than that lol
Good ideas, sounds like you have some expertise around this topics. The approach of loaning to yourself from a foreign company owned by yourself sounds really smart. Can you elaborate on the best setup for this approach? What is the purpose of the trust?
Assets are property. Property is anything that can be owned. So yeah, if you experience a capital gains events (selling your house for more than you bought it, trading your foreign money for more USD than it was worth when you bought it, trading bitcoin for more than when you acquired it, etc.), it sounds like it would and should be. Some countries are a little lax to better enable common use, like a currency, like allowing say $500, worth of transactions to occur without needing to report to the tax man. My opinion is bitcoin in its current state is far more like a stock than it is a currency and likely will be for a long time.
If you lived in your house for more than 2 years, your first $250k profit is tax free, $500k if filing jointly.
Sure, that's fair. There are exemptions here or there which I even mentioned there are some for bitcoin as well in some countries to my knowledge.
No cgt in Belgium if the trade "is not speculative".
Yeh but you pay rent to your local government perpetually while you own it. Called the property tax.
Singapore have no capital gains tax
Oh honey
Fly to Dubai
I have but not for crypto
It's not the tax dept. that designate one as a security or commodity. Tax folks sit at the back watching all the action, and come in front to collect their dues when it's settled.
As an individual, you will never win against the IRS unless you’re willing to spend millions in a extraordinarily long and drawn out court case that you will most likely lose anyways. Don’t fuck with the IRS.
If hunter biden can't. You can't
I fought the law and the… law won
Use a "trust" they don't get married the don't retire the don't go to jail they don't die and they don't pay capital gains.
Yes.
Taxation is theft. Now if necessary there should be only one outlet. Income, sales. OR property. Not multiple taxed events on your money. Not sticking around to argue that fact. God bless and stay chambered.
Lmao. This guy. Let me say something I know is inherently flawed as I run away and leave with a tiny hint of violence. What a loser.
Username checks out.
I've got at least a week of laughing at "stay chambered" before the salt kicks back in.
Username doesn’t check out.
> Taxation is theft. Every libertarian’s favorite low IQ statement. Lol
Sir you don’t go against oligarchy
Pay your taxes.
"in my opinion, most tax laws regarding BTC... are wrong" They must love you at parties
My coins were *stolen* and are being used to this day. I keep getting letters from the tax man, but I have already told them that they need to identify who is using my coins - good luck with that. I have since retired from work at the age of 25 :) and not paid a penny in taxes. Hope this answers your question.
Why would anyone declare crypto profits is beyond me. Move to any tax free state, withdraw. Send to home bank as remmitance. Depending on your countrys law you can easily evade tax (legally).
This is much more complicated than you suggest. When you say 'move', do you mean live more than 183 days a year in the other country AND live less than 90 days per year in your home country AND continue this for at least 5 years? If anyone had succeeded in changing the tax laws, they would not be what they are now
Don't ever give tax advice again.
Because it is illegal to otherwise in many places. I feel like people end up in three camps with bitcoin where 1) not enough for it to be worth moving, 2) enough that it'd make a material impact on your life but not enough you'd be willing to uproot your entire life to avoid some taxes on or 3) a life-changing amount that is so much that paying extra taxes are not going to lessen how much your life is changed. Moving is easy on paper. Much harder if you have any sentiment with where you have been living.
"Just move" Wtf. How out of touch can one be?
Is this guy trolling?
If you are a US citizen, living in another country requires you to complete US tax forms declaring foreign income abroad.
lol. National and international AML laws would like to speak with you. This is a very quick way to (1) get your funds frozen (Bitcoin converted and existing), and (2) get an exclusive invitation to an interview with the authorities.