name
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I have a feeling that we are going to have to use "bitcoins" of any kind in the future. If not for anything else, then because they will be able to control and access our money when they want it

techmac
2973
techmac  
on my own:
I have a feeling that we are going to have to use "bitcoins" of any kind in the future. If not for anything else, then because they will be able to control and access our money when they want it

Just imagine JP Morgan that payed $30 billion in fines last years being in charge of your electronic money :):) That would be the uber-thief feast (even the government would order FED (or maybe NSA or CIA ) to "electronically print" some extra money when it is needed to save Dimon and alikes)

name
992
name  
techmac:
Just imagine JP Morgan that payed $30 billion in fines last years being in charge of your electronic money :) That would be the uber-thief feast (even the government would order FED (or maybe NSA or CIA ) to "electronically print" some extra money when it is needed to save Dimon and alikes)

That is Dimons wet dream

thenews
28438
thenews  

IRS Rules Bitcoin Is Property (Not Currency)

After less than three months consideration, the IRS has issued its statement clarifying th etax treatment of Bitcoins (and other virtual currencies) before the April 15th Deadline. The finding, summarized, is that Vitual currencies will be treated as property (not as a currency) which, as WSJ notes, means an investor who buys bitcoin would typically have a capital gain or loss when it’s sold. The price of Bitcoin is rising modestly on this news...

As Bloomberg explains:

Today’s IRS guidance will provide certainty for investors, along with potential income-tax liability.Under the ruling, purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of income for the coffee shop.

...

Under the IRS ruling, Bitcoin investors would be treated like stock investors.Bitcoins held for more than a year and then sold would pay the lower tax rates applicable to capital gains -- a maximum of 23.8 percent compared with the 43.4 percent top rate on property sold within a year of purchase.

...

For investors with losses, U.S. tax law allows taxpayers to subtract capital losses from any capital gains. They can also subtract up to $3,000 of capital losses a year from ordinary income.

As with stocks, Bitcoin dealers would be subject to different rules that wouldn’t allow for capital gains treatment.

Bitcoin miners would have to report their earnings as taxable income with a value equal to the worth on the day it was mined. If they mine as part of a business, they would have to pay payroll taxes as well.

And here is WSJ's Q&A:

How is virtual currency treated for federal tax purposes?

Bitcoin and other virtual currencies are treated as property, not as a currency. Therefore, an investor who buys bitcoin would typically have a capital gain or loss when it’s sold but wouldn’t have foreign-currency gains and losses.

If a taxpayer receives a payment in virtual currency, is it considered income?

Yes, the fair-market value of the currency (in U.S. dollars) on the date the payment was received is considered to be income. For more information on exchange rates, see the notice.

Does a person who makes a payment using bitcoin have a gain or loss on the transaction?

Yes, typically. For example, say a person buys $5,000 of bitcoin, which then doubles in value. If she then uses the bitcoin to pay a $10,000 tuition bill, she could have a $5,000 taxable capital gain on the transaction.

This clarification means that people who use bitcoin in small amounts, such as to buy a meal, could face onerous record-keeping issues.

Is a person who “mines” a virtual currency considered to have received income?

Yes, and if the taxpayer engages in mining as a trade or business, self-employment tax is often due.

Does virtual currency that’s paid by an employer in return for services meet the definition of wages for payroll-tax purposes?

Yes, and it’s also subject to income-tax withholding.

Must payments made in bitcoin be reported to the IRS?

Yes, if they meet the requirements for information reporting on payments made in property. Typically, the threshold is payments of $600 or more.

Will taxpayers be penalized for having treated bitcoin transactions in a different manner before today’s notice?

They could be, especially if they underpayed tax or didn’t report income, or both. But the IRS noted that penalty relief “may be available” to persons who were required to file information reports but didn’t, if there’s a reasonable cause for the nonfiling.

source

thenews
28438
thenews  

The IRS has ruled Bitcoin should be treated as property, not as currency, for tax purposes.

According to Bitcoin tax expert Tyson Cross, this will create a significant burden on Bitcoin users, as every transaction they ever make using the digital currency will have to be reported in some way.

That would not be the case if it had been ruled a digital currency.

"Users will have to track their transactions and determine the amount of their taxable gain each time," he told BI in an email. "It's quite a burden. The rules on taxing foreign currency provide an exception for 'personal transactions' for that very reason. It would be great to have that exception (or something similar) apply to bitcoins as well."

But Cross adds the IRS' guidance may not stand forever. The Treasury Department should now begin developing formal regulations tailored to digital currencies.

"That typically begins with a request for public comments, which was included in the notice," he said. "Tax professionals can then identify issues and advocate possible solutions. So between now and the issuance of actual regulations (which takes years), there's ample opportunity to shape the tax treatment."

The agency says anyone who holds the currency will have to calculate its value from the date it was received to determine whether a gain or loss was realized, and report the result.

If you've done any Bitcoin mining, the fair market value of the virtual currency as of the date of receipt is includible in gross income.

If you pay anyone in Bitcoin, you must file a W-2.

The Wall Street Journal's tax guru Laura Saunders has a great explainer on what this all means »

Here is the full text of the IRS' detailed Q&A:

Q-1: How is virtual currency treated for federal tax purposes?

A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.

Q-2: Is virtual currency treated as currency for purposes of determining whether a transaction results in foreign currency gain or loss under U.S. federal tax laws?

A-2: No. Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.

Q-3: Must a taxpayer who receives virtual currency as payment for goods or services include in computing gross income the fair market value of the virtual currency?

A-3: Yes. A taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received. See Publication 525, Taxable and Nontaxable Income, for more information on miscellaneous income from exchanges involving property or services.

Q-4: What is the basis of virtual currency received as payment for goods or services in Q&A-3?

A-4: The basis of virtual currency that a taxpayer receives as payment for goods or services in Q&A-3 is the fair market value of the virtual currency in U.S. dollars as of the date of receipt. See Publication 551, Basis of Assets, for more information on the computation of basis when property is received for goods or services.

Q-5: How is the fair market value of virtual currency determined?

A-5: For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied.

Q-6: Does a taxpayer have gain or loss upon an exchange of virtual currency for other property?

A-6: Yes. If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency. See Publication 544, Sales and Other Dispositions of Assets, for information about the tax treatment of sales and exchanges, such as whether a loss is deductible.

Q-7: What type of gain or loss does a taxpayer realize on the sale or exchange of virtual currency?

A-7: The character of the gain or loss generally depends on whether the virtual currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is a capital asset in the hands of the taxpayer. For example, stocks, bonds, and other investment property are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the sale or exchange of virtual currency that is not a capital asset in the hands of the taxpayer. Inventory and other property held mainly for sale to customers in a trade or business are examples of property that is not a capital asset. See Publication 544 for more information about capital assets and the character of gain or loss.

Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?

A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.

Q-9: Is an individual who “mines” virtual currency as a trade or business subject to self-employment tax on the income derived from those activities?

A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax. See Chapter 10 of Publication 334, Tax Guide for Small Business, for more information on self-employment tax and Publication 535, Business Expenses, for more information on determining whether expenses are from a business activity carried on to make a profit.

Q-10: Does virtual currency received by an independent contractor for performing services constitute self‑employment income?

A-10: Yes. Generally, self‑employment income includes all gross income derived by an individual from any trade or business carried on by the individual as other than an employee. Consequently, the fair market value of virtual currency received for services performed as an independent contractor, measured in U.S. dollars as of the date of receipt, constitutes self‑employment income and is subject to the self-employment tax. See FS-2007-18, April 2007, Business or Hobby? Answer Has Implications for Deductions, for information on determining whether an activity is a business or a hobby.

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thenews
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thenews  

Mt. Gox says working with police in missing bitcoin probe

In the first confirmation of a criminal investigation at Mt. Gox, the failed Tokyo-based bitcoin exchange said on Wednesday it was working with the police "with regard to the disappearance" of bitcoins worth some $490 million at current prices.

Mt. Gox said in a brief statement on its website that it had submitted records and documents to the Tokyo Metropolitan Police as part of its civil rehabilitation application. A police spokesman declined to comment and said no announcements were planned.

Mt. Gox filed for bankruptcy protection in Tokyo on Feb. 28, saying 750,000 bitcoins belonging to its customers and 100,000 of its own bitcoins were stolen by hackers who exploited a security flaw in its software. It also said $28 million were "missing" from its Japanese bank accounts.

It was not immediately clear if the police investigation was looking into those missing funds. A representative on a helpline for Mt. Gox creditors told Reuters the exchange had been working with the police as of "two days ago." Lawyers for Mt. Gox were not immediately available to comment.

A court-appointed administrator is due to report by Friday on a month-long examination into Mt. Gox and determine whether the exchange can be rehabilitated or should be liquidated.

Mt. Gox has also filed for bankruptcy protection in the United States after U.S. customers with funds and bitcoin frozen at Mt. Gox began a class-action against the exchange, alleging fraud by the company and its 28-year old CEO, Mark Karpeles. Another class-action suit was filed in Canada on March 16, alleging a lengthy security breach resulted in "the pilfering of millions of dollars' worth of Mt. Gox users' bitcoins."

Both lawsuits also named Mizuho Bank Ltd, one of Japan's largest lenders, for allegedly aiding in a fraud by providing banking services to Mt. Gox. The plaintiffs say their money was held in an account or accounts at Mizuho. The bank has previously declined to comment on the lawsuits.

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techmac
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techmac  

Now that IRS has it ruling I hope that this bitcoin frenzy will stop once and for all. The whole thing was ridiculous

thenews
28438
thenews  

Bitcoin Is Getting Destroyed On Rumors That China Is Banning It

Bitcoin was down nearly 12% on rumors China has banned Bitcoin, CoinDesk's Jon Southurst reports.

This follows an erroneous report that that had occurred last week.

But this time the reporter writing up the news is sticking by his story, Southurst says, although the PBOC has not released any information:

News that the Chinese government would penalize any bank transacting with bitcoin exchanges after 15th April started to break around mid-morning China time on Thursday 27th March. This time, it was reported as fact by a number of news services.

Here's the price action:

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pavaka
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pavaka  

Bitcoin, being extension of USD..................

thenews
28438
thenews  

BitBeat: China Rumor (Since Refuted) Drops Bitcoin Prices

Crossing Our Desk:

- Bitcoin prices are dropping again on Friday. While the moves are not large — at least in bitcoin terms — they get attention when you see it falling further away from the $600 range where it had been comfortably sitting. The culprit appears to a news report, since refuted, that China was planning a bitcoin ban effective April 15.

The price was above $600 two days ago, but has been sliding steadily; it traded as low as $563.46 today, according to CoindDesk’s index, and is around $580 now.

The report appeared on the Sina news service’s website (you can see a translated version of it here), saying that the People’s Bank of China would ban all bitcoin transactions on April 15. Of course, news like this spread quickly, with redditers posting, reporting and debating what it all meant (that was where we first saw reference to it). There’s nothing on the Bank’s English-language website, certainly, and as quickly as the news spread, the news that it wasn’t really news spread as well.

We called Sina’s offices in California, but haven’t heard back yet.

Yes, this is one more example of why bitcoin trading is risky (and of course, will be a kind of selling point for folks like Barry Silbert and the Winkelvii who are developing bitcoin trust fund). We’re talking about a relatively thin, illiquid market that can be and is moved by rumor and innuendo. On the other hand, the U.S. stock market is a huge, liquid market than can be and is moved by rumor and innuendo.

Bitcoin’s growth in China is hotly debated topic. You’ve got an authoritarian regime controlling about a billion and a half people with a burgeoning middle class, and that is a perfect nesting ground for a disruption, stick-a-finger-in-the-eye, slippery, decentralized, libertarian technology like bitcoin. The People’s Bank in December declared that bitcoin was not currency, and that put a dent in its growth there.

It isn’t clear how big that dent is, though. Bobby Lee, the CEO of BTC China, has been arguing that bitcoin is still growing in China. You can argue to the extent to which he is correct, but today’s price moves make it clear that bitcoin still has a big interest in China.

In the News:

- Mark Karpeles apparently dug deep into the cushions of his couch and found $120 million in loose change. Or something like that. Mt. Gox, the now-bankrupt bitcoin exchange run by Mr. Karpeles, announced overnight that it found about 200,000 bitcoin in an “old wallet,” a storage filed it had not used since 2011.

How the company could just not be aware of $120 million worth of bitcoin is certainly surprising. But it at least provides Gox’s customers that they may recover something after all. The find lowers the amount of bitcoin lost from 850,000 to 650,000, although the company didn’t specify if the found bitcoin belonged to customers or the exchange itself.

- Bill Miller was a darling in the equities markets for years, a Legg Mason mutual fund manager who had an impressive streak of beating the S&P 500 for 15 years running. The streak ended in 2005, and Mr. Miller sank into the weeds, just another smart guy managing money.

So, make of this what you will, but Mr. Miller is investing in bitcoin. “Bitcoin is like making a venture bet,” Mr. Miller told Bloomberg’s Tom Keene. “The potential return is huge.” He said he’s investing personally, and would buy bitcoin for his fund “when Bloomberg can get a quote on it and it can be securley stored.”

source