Bitcoin, the Funny Money of this decade

[Andrew Noel Schaefer]

Man, thats kinda sad. I bet people who put too much value on funny money are SHITTING PANTS right now

 

[Smutley]

Man, thats kinda sad. I bet people who put too much value on funny money are SHITTING PANTS right now

Your comment made me do some digging in the underbelly of the internet (read: Reddit), and especially the bitcoin subforum. They're taking it about as well as you'd expect.

Big_Man_On_Campus
If they declare it property, then buying something for bitcoin is simply bartering. This would seem to mean that all transactions, even bartering goods-for-goods is taxable. While this is consistent with IRS regulations if you look it up, it is ridiculous on its face. If no dollar amount changes hands, then there is no party to the exchange who is ending up with a more fungible good.
What the IRS is saying is, if you wash my car and I give you a hot-dog, one of us has to pay taxes on the "income" we received for our exchange.

nairbv
Not one of you, but both of you. One of you received income in the amount of the market-value of a car wash, and the other received income in the amount of the market-value of a hot-dog.

Tester24834
Someone should make a wallet app that automatically records all transactions done at grocery stores and the like that can be set under a certain threshold and make millIons. You heard it here first.

bitcointaxes
Already working on it as a feature to bitcointaxes.

PotatoBadger
I see a lot of people concluding that taxation will have serious implications for Bitcoin.
I think that Bitcoin will have serious implications for taxation.

Ilsensine
Here is a question and I apologize in advance if I use a term wrong.
I have been selling a lot of Bitcoin as the price falls.
I had bought 1btc at $900, which I sold for $650. Does that mean I can claim a loss of $250?
At that time the market price of btc was $600, so went and bought another 1btc.
In my mind I had a $50 profit, because I still had my 1btc, but can I also claim the $250(or $200) loss on my taxes?

mustyoshi
Yes, you haven't realized a gain on the 600$ BTC you bought yet, so in that situation you are at a net loss of 250$.

Ilsensine
Later I sold the $650 for $550, and replaced it. For $50 cash profit, $100 property value loss.
I've done this several dozen times, so you're saying I could be sitting on thousands or dollars of write-off?

(note, bitcoins are considered property which has depreciation but it isn't considered a stock or proper investment, so "losses" won't aren't realized).

Haha, reading through this stupid reddit thread is a hell of a lot better than churning out sales reports. PREPARE YOUR BUTTS FOR TEXT DUMPS.

Jiiminy
So if the tax rules are applied equally to all, then tonight when people combine their boiled macaroni with oil and cheese powder to make their Kraft Dinner ( or what ever you make for dinner) you are creating a taxable event. Just like mining BTC, when you combine PC, internet and electricity..

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Jiiminy
If BTC is property like a bushel of corn, a cord of wood or an ingot of gold, then why is it taxed when created?
No other property type is taxed until sold, so they are lying when they say they will treat it as property.
Sounds like the IRS is acting punitively against BTC. Like they attacked the TEA party.

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Jiiminy
Always interesting to here what the IRS has to say but this is a decision for the Courts to interpret the law, not the IRS. As much as the IRS likes to pretend, they are subject to same laws as everyone else.
And off hand it seems the IRS has got mining wrong, unless the law permits special treatment for targeted income groups. The idea that a mined Bitcoin is taxable on mining seem unlawful. That would be like saying if someone combines some bread, mustard and ham they have immediately created a taxable event, clearly ridiculous. No way a Court of the people's Law would allow a special interpretation like that. Or if you were to build a shed in your back yard, that would be a taxable event once built, and when you sell?

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Jiiminy
This is just Obomba being racist. He hates white people and he knows mostly white people own BTC.

truguy
So, the Feds want to use Bitcoin as the route to unrolling a national sales tax? If you can't spend it without taxation, they want you to pay a percentage of your spend.
Honestly, this is how we should respond to the government on this issue: "Fuck off."
They don't own you. They don't own your computer. They don't own your mining resources. They don't own your creations. They don't own your bitcoin.
Who the fuck do THEY think they are, telling us what WE have to do? Of course, it's the same old story, but this is as good of a time as any to buck the trend.

Nillix
They own the prisons they can put you into for tax fraud...

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mc432
Where is William Wallace when you need him? If everyone refused to participate they cant arrest and kill us all, or can they?

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blakejack
“To compel a man to furnish funds (taxes) for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.” ― Thomas Jefferson

happyjustbecause
Looking for a serious answer, What if I find a USB stick in a landfill site with 1 BTC on it, do I need to pay taxes on that as I spend it?

This is one of the ones that sticks with me the most. This is honestly a belief of many libertarians / Free Men / Freemen on the Land, that there is some kind of magical set of words in some forgotten codex that will get them out of anything they could want. It's wish fulfillment, pure and simple. They concoct these crazy schemes for getting out of trouble, schemes like, "Well, like, I stumbled upon a USB stick in a landfill and that stick had bitcoins on it, and I didn't mine them and I didn't buy them so WHAT NO IRS you hold no authority over this FOUND ASSET".

In 100% of cases brought before a judge these never pass. Sometimes they even get hit with more severe penalties.

pierebel
I'll be honest, they are fucking stupid. Who owns the property? How do you define this? Bitcoin reside in the blockchain, every full node owns the blockchain, is every full node responsible for paying capital gains taxes on the entirety of bitcoin? Lets not forget you can't prove that only one person has control of a single private key, it is possible through sheer luck that they are duplicated, then what? I mean this goes into a recent ruling here http://torrentfreak.com/ip-address-not-person-140324/ <-- This should VERY MUCH apply to bitcoin addresses and makes taxing anyone participating in bitcoin idiotic.

Bitcoins have been proven countless times as very traceable, and the blockchain provides a very easy way for anyone who wants to look at transacations to do so. Sure, you may have 3 private wallets, 2 of which are offline only and never tied to your name, but at some point if you cash out at an exchange, trade for goods, or purchase a bunch of stuff from a retailer like Overstock.com (which uses a service to convert bitcoins on the fly so they never actually touch the stupid stuff), you'll be discovered.

DafarheezyRises
Sooo..... are we in for ANOTHER huge dip in price?
Is bitcoin about to be dead?

thecodyshow
quite the opposite I would say. Think of all the large institutional money that will flow into bitcoin now that they have set guidelines. Its annoying for the small timers dealing with day to day bitcoin purchases but for the value of bitcoin this will help prices go up.

IT'LL ONLY GO UP FROM HERE!!!!!!!!!!!!!!

 

[Smutley]

Shamelessly stolen from Gawker, here's a dude who's so sure bitcoins won't drop below $1000, that he said he'd eat a hat if they did before January 1st.

They did.

Then he did. For 46 minutes.

http://www.reddit.com/r/BitcoinMarkets/comments/1rmc4m/can_you_guys_stop_bashing_the_bears/cdouq69

I'm very familiar with the two year charts as are you. I've seen your name around these parts for some time now. Those who bought during the "bubble" (readorrection) in April are smart enough to not sell for any less than they bought in at. This market has a ways to go with us having been given the green light by the US government and I believe we have yet to see the price show the true market value for where we're at right now. I have no doubt that the market will overshoot bitcoin's "true value" but if I had to guess it'll happen much higher than we are and bottom out about where we are right now. I'll eat a hat on video with ketchup if we're below $1000 come January 1st. Tell me right now that if we hit 2000 you wont go in with all you got if the price dips to 1000.

 

[DeagleDad420]

I don't know if anyone's posted this link before because I'm an illiterate sperg and can't read threads before I post in them but buttcoin.org is literally chock full of hilarious horror stories.

One of my favorites here, a horror story about some poor fuck trying to cash out of Bitcoins.

 

[Morbid Boredom]

The Resolution of the Bitcoin Experiment

I just stumbled across this, and I figured why not necro a 21-month old thread?

Apparently, a guy big in the Bitcoin scene has given up, and he explains why. One of the more telling problems is that only a handful of people control Bitcoin, not unlike the governing bodies that control fiat currencies.

 

[AnOminous]

The Resolution of the Bitcoin Experiment

I just stumbled across this, and I figured why not necro a 21-month old thread?

Apparently, a guy big in the Bitcoin scene has given up, and he explains why. One of the more telling problems is that only a handful of people control Bitcoin, not unlike the governing bodies that control fiat currencies.

Even worse for Bitcoin, though, is that handful of people is a bunch of fucking lolcows.