Trade (Or Transact In) Bitcon? ReDo Your Taxes!
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2014-03-28 07:57 by Karl Denninger
in Monetary , 141 references Ignore this thread
Trade (Or Transact In) Bitcon? ReDo Your Taxes!

Another one of these....

smiley

The U.S. government will treat Bitcoin as property for tax purposes, applying rules it uses to govern stocks and barter transactions, the Internal Revenue Service said in its first substantive ruling on the issue.

So it's effectively the same as a share of stock.

Good luck boys and girls if you're trading it, buying it, spending it and such.

I have had years where I filed a book with a the IRS; unfortuantely there is no "book rate" for tax returns, but there should be.  Anyone who has traded actively knows damn well how much of a pain in the ass this is come tax time and is why companies like Wohlers are in business (to sort that crap in a reasonable amount of time and produce the documentation necessary to not wind up audited -- or prosecuted.)

Well........ now things get sticky because every Bitcoin transaction has a basis and a profit or loss.  Worse, the wash sale rule may apply too. And finally, if that's not a big enough kick in the balls, 1099 reporting is also required if you disburse more than $600 worth of it in payment(s) to an individual exactly as it is if you pay an independent contractor more than $600 in a year.

The full IRS release is here and since the blockchain is public if you have transacted in it and don't report it they can find you.  

If it's worth it you can bet they will.