Why does that make it harder for businesses to accept bitcoin?
― james franco tur(oll)ing test (Hurting 2), Tuesday, 25 March 2014 20:00 (ten years ago) link
I guess it depends to what extent they want to "accept" them. Currently no businesses (that I know of) actually keep any coins - they just use a service like Bitpay to convert them to $$$ immediately. If they actually do for whatever reason decide to keep Bitcoins they're now looking at reporting taxes on all that and they could get massively boned from year to year should the price ever take a sharp dive (as it's been known to do)
― frogbs, Tuesday, 25 March 2014 20:36 (ten years ago) link
j0n posted mt gox source code on twitter
― Little Nicky Pizza loved that rascal Rust (upper mississippi sh@kedown), Tuesday, 25 March 2014 20:40 (ten years ago) link
― frogbs, Tuesday, March 25, 2014 4:36 PM Bookmark Flag Post Permalink
I don't think this is correct. They would have to pay taxes (to the extent there is profit in the business) on the value regardless of whether it was treated as "property" or "currency." There are already complex tax rules for treatment of paper gains/losses in the value of an asset, so again I don't know why this would be any different.
― james franco tur(oll)ing test (Hurting 2), Tuesday, 25 March 2014 21:53 (ten years ago) link
There's a good Q&A here that gives better answers than I can obv:http://dealbook.nytimes.com/2014/03/25/i-r-s-says-bitcoin-should-be-considered-property-not-currency/?_php=true&_type=blogs&_r=0
― james franco tur(oll)ing test (Hurting 2), Tuesday, 25 March 2014 21:55 (ten years ago) link
yeah maybe "harder" isn't the word, but it certainly seems much less attractive now. you never know when the price is going to massively crash and as I understand it if you take in a bunch of BTC at $600 and the next year they're only $300 you still have to pay taxes on the $600 price.
― frogbs, Wednesday, 26 March 2014 13:30 (ten years ago) link
I think more importantly, this makes mining even more terribly unprofitable, since you still have to spend cash on the equipment and tons on electricity and when you finally get the bit you gotta pay taxes on it, in dirty fiat no less! (as of now would be like $200 per)
of course, like only .5% of these dudes are actually gonna report, so whatever
― frogbs, Wednesday, 26 March 2014 13:36 (ten years ago) link
If you buy a bunch of bitcoins at $600 and they fall to $300 you don't pay taxes on anything
― 龜, Wednesday, 26 March 2014 13:49 (ten years ago) link
But yeah if you made one and when you made it it was $600 you'd have to pay taxes on that $600
I think it'd be a little more complicated than that. You could probably deduct the expenses of mining.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 13:57 (ten years ago) link
Only if you didn't take the standard deduction and most people can't since their deductible expenses don't rise above the 2% AGI floor so it doesn't make sense
― 龜, Wednesday, 26 March 2014 13:59 (ten years ago) link
A lot of miners today are businesses, not individuals.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 14:12 (ten years ago) link
right, but say you get paid in them. you sell something for 10 BTC @ $600, then next year the bits are at $300. so essentially you have $3000 worth of bits but you have to pay taxes on $6000.
― frogbs, Wednesday, 26 March 2014 14:14 (ten years ago) link
Presumably you had purchased whatever you sold with after-tax dollars so it wouldn't really be income to you therefore you wouldn't have to pay tax on the bitcoins
― 龜, Wednesday, 26 March 2014 14:33 (ten years ago) link
Business taxes are more complicated than that. First of all, you don't pay taxes on your gross, you pay on your net. Second, you could probably write off the valuation loss of the bitcoins if you actually held them.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 14:34 (ten years ago) link
I don't think you could depreciate bitcoin value loss over time but you could definitely deduct the loss when you sell them, but you'd have to sell them first
― 龜, Wednesday, 26 March 2014 14:36 (ten years ago) link
http://www.businessinsider.com/irs-bitcoin-is-property-not-currency-full-release-2014-3
I think you're correct -- losses would only be written down when they are realized, i.e. when the bitcoin is used to pay for something or sold. Still, one assumes that would occur eventually.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 14:56 (ten years ago) link
You don't realize the loss when you sell it you recognize it
― 龜, Wednesday, 26 March 2014 15:00 (ten years ago) link
Actually you do both but the recognition is what you're after
― 龜, Wednesday, 26 March 2014 15:01 (ten years ago) link
not sure what you mean. that's what a realized loss is.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:01 (ten years ago) link
sry xp that got all garbled
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:02 (ten years ago) link
you realize the loss when you sell it, you recognize it when you report it
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:03 (ten years ago) link
we're basically saying the same thing
You can realize a loss but if you have something that would offset it then you would never recognize the loss even though you realized it
― 龜, Wednesday, 26 March 2014 15:07 (ten years ago) link
this is getting more technical than it needs to be for the conversation and veering off track, but I believe you would recognize the loss, but the offset would just change the net impact to your taxes.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:11 (ten years ago) link
we're not talking about bitcoins anymore, are we
― Clay, Wednesday, 26 March 2014 15:12 (ten years ago) link
Nah you'd realize the loss, not recognize it xp
What I'm trying to say is that, taxes are more fun than bitcoins
Where's sarahell???
― 龜, Wednesday, 26 March 2014 15:13 (ten years ago) link
i.e. you have a realized $3000 loss when you take bitcoins you bought for $7K and sell them for 4K. You also sold a lot of magic the gathering cards that you purchased for $4K for $9K, a gain of $5k. Your capital gain of $5K may "offset" your capital loss of $4K, giving you a net gain of $1K. That doesn't mean you don't "recognize" the $4K loss, it just means that your gains exceeded your losses and you don't wind up having anything to write off. I could be wrong, I'm no accountant.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:14 (ten years ago) link
the result is the same so we're just talking terminology.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:15 (ten years ago) link
ha no I meant like "loss" as in emotional or personal loss in that paragraph kinda works similarly? thus my 'joke'
― Clay, Wednesday, 26 March 2014 15:15 (ten years ago) link
If you sold two things during the tax year and had a loss of 99 on one but a gain of 100 on the other, you'd realize both the gain and the loss but you'd only recognize a gain of 1, that's the amount you'd pay tax on
― 龜, Wednesday, 26 March 2014 15:16 (ten years ago) link
again, result is the same, we're just talking terminology
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:16 (ten years ago) link
Yeah but your terminology is wrong
Real eyes realize real gains and losses, is what I'm saying
― 龜, Wednesday, 26 March 2014 15:18 (ten years ago) link
I'll have to dig up an adequate source a little later when I get the chance, but I'm p sure YOUR terminology is wrong B-)
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:31 (ten years ago) link
i.e., the fact that you have other gains that "offset" your losses doesn't mean that you don't "recognize" the loss, it just changes the net amount that's taxable or write-off-able.
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:33 (ten years ago) link
my co-worker who took an accounting class in college says he thinks I'm right so ha
― james franco tur(oll)ing test (Hurting 2), Wednesday, 26 March 2014 15:38 (ten years ago) link
i hate you all
― Nhex, Wednesday, 26 March 2014 17:59 (ten years ago) link
get the FASB on this motherfucker asap
― panettone for the painfully alone (mayor jingleberries), Wednesday, 26 March 2014 18:01 (ten years ago) link
can bitcoin loss debt be forgiven >?with a 1099?
― Brian Eno's Mother (Latham Green), Wednesday, 26 March 2014 18:35 (ten years ago) link
poetry
― We hugged with no names exchanged (forksclovetofu), Wednesday, 26 March 2014 18:38 (ten years ago) link
Seems like Bitcoin enthusiasts are trying to put on a brave face on this IRS ruling, but the more I read about it the less favorable it sounds:
http://marginalrevolution.com/marginalrevolution/2014/03/did-bitcoins-just-become-less-fungible.html
― o. nate, Thursday, 27 March 2014 21:41 (ten years ago) link
wow the comments. These people are so motherfucking STUPID
― james franco tur(oll)ing test (Hurting 2), Thursday, 27 March 2014 21:44 (ten years ago) link
This sounds like a pretty serious strike against Bitcoin, but then again it seems like the kind of thing where people should have planned in advance for no help from the IRS. Is there international internet wizardry they can just do to sidestep this stuff?
― ▴▲ ▴TH3CR()$BY$H()W▴▲ ▴ (Adam Bruneau), Thursday, 27 March 2014 22:08 (ten years ago) link
price def appears to be hurting since the ruling. But I don't understand, did people think the IRS would just, like, do nothing?
― james franco tur(oll)ing test (Hurting 2), Thursday, 27 March 2014 22:10 (ten years ago) link
Dan Weber March 27, 2014 at 5:04 pmYes, the market should define tax law.
― panettone for the painfully alone (mayor jingleberries), Thursday, 27 March 2014 22:46 (ten years ago) link
https://www.youtube.com/watch?v=mjiX7xiFD-o
Last November, in what he later described as a drunken state, a Redditor by the username, Anndddyyyy, wrote a post claiming that if Bitcoin was below $1000 come January 1, he'd do exactly that. "I may be an idiot," he wrote in an update to the original post, "But I like to think I'm an idiot with integrity."
― We hugged with no names exchanged (forksclovetofu), Friday, 28 March 2014 17:09 (ten years ago) link
FORTY 6 MINUTES LONG
― purposely lend impetus to my HOOS (BIG HOOS aka the steendriver), Friday, 28 March 2014 18:42 (ten years ago) link
In b4 "fuck eating a hat"
― bi-polar uncle (its OK-he's dead) (Phil D.), Friday, 28 March 2014 18:44 (ten years ago) link
If anyone wants to read something by a more level-headed, skeptical but hopeful bitcoin enthusiast who doesn't sound batshit or dumb:
https://medium.com/p/a9d53ce3688a
― james franco tur(oll)ing test (Hurting 2), Friday, 28 March 2014 18:44 (ten years ago) link