Bitcoins - digital currency - Page 591 - Business, Finances and Investing Forum

A question about paying taxes for using Coinbase. Let's say I purchased 2 bitcoins at $200 each and then sold one of them for $400 and kept one in my account. Do I need to declare taxes for just the $200 of profit, or the entire $400? Or 800?

Also, does this change if I did these transactions on an exchange?

Thanks!

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07-28-2014 , 05:35 PM

#14752

onemoretimes

Pooh-Bah

Join Date: Sep 2012 Posts: 3,535

Quote:

Originally Posted by iloveny161

You would owe on $200. And no it doesn't matter where you bought or sold.

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07-28-2014 , 07:04 PM

#14753

housenuts

1st Quartiled the 500

Join Date: Jul 2004 Posts: 49,725

Where it gets confusing is when you buy 5, say at 100, 200, 300, 400, and 500.
Then you gamble some and lose 1.5 btc, spend 1 btc on a item, gamble some more and win 1 btc, buy a .5 btc item, then sell 2 btc at $350 each.

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07-28-2014 , 09:33 PM

#14754

dmatz327

veteran

Join Date: Jul 2013 Posts: 2,836

Your basis on sale isn't all that confusing if you just follow LIFO, valuing the ones you win gambling is an effing hassle though.

200, 250, 150, 900, and you still have the one you won probably at 35 different valuations based on date won.

Last edited by dmatz327; 07-28-2014 at 09:38 PM. Reason: Math is hard

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07-28-2014 , 10:56 PM

#14755

housenuts

1st Quartiled the 500

Join Date: Jul 2004 Posts: 49,725

Why LIFO and not FIFO? It's an amazingly huge hassle to keep track of everything and report properly.

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07-29-2014 , 12:26 AM

#14756

gadolparah

Pooh-Bah

Join Date: Dec 2009 Posts: 4,356

+1, really have no idea how im going to do this for tax purposes. have wizened up and record everything now but i went a good solid chunk of months without this and now im lost. between all the exchanges, selling to friends, HSNL on 2p2 for various poker sites, and swc i really have no idea how to recreate everything

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07-29-2014 , 04:52 AM

#14757

iloveny161

old hand

Join Date: Feb 2007 Posts: 1,967

Thanks for the help, guys! Confusing stuff.

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07-29-2014 , 09:28 AM

#14758

heltok

old hand

Join Date: May 2012 Posts: 1,695

In Sweden it's FIFO. Not sure which exchange rate to use though, mtgox still ok to use?

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07-29-2014 , 03:04 PM

#14759

andr3w321

adept

Join Date: Jul 2007 Posts: 1,148

Anyone know what the technically correct way to handle taxes on coins won or lost playing poker?

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07-29-2014 , 03:30 PM

#14760

dmatz327

veteran

Join Date: Jul 2013 Posts: 2,836

Quote:

Originally Posted by andr3w321

Anyone know what the technically correct way to handle taxes on coins won or lost playing poker?

My understanding is you would convert each sessions w/l number into a dollar value (have no idea how to select an exchange rate, exact time seems like an insane burden, I'm planning on using a consistent time of day and probably the coin base rate and just roll with that) and then just proceed as normal. You should get basis in your total won coin at whatever value you include in income. And obligatory not tax advice.

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07-29-2014 , 03:49 PM

#14761

housenuts

1st Quartiled the 500

Join Date: Jul 2004 Posts: 49,725

Seems way too burdensome. I would simply record amount of poker btc you have on Jan 1, and it's corresponding value.
Then record amount of BTC you have on Dec 31 and it's corresponding value.

The btc/increase decrease is your income.

The corresponding value increase/decrease is your capital gains/losses.

Think im missing a step there. On phone, not thinking clearly, but something along those lines.

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07-29-2014 , 05:51 PM

#14762

dmatz327

veteran

Join Date: Jul 2013 Posts: 2,836

Quote:

Originally Posted by housenuts

Why LIFO and not FIFO? It's an amazingly huge hassle to keep track of everything and report properly.

I find LIFO to be much easier, you can use either though I believe.

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07-29-2014 , 08:05 PM

#14763

DrawNone

Pooh-Bah

Join Date: May 2013 Posts: 5,023

if anyone is playing on Betcoin, or considering it, they should read this thread.

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07-29-2014 , 10:39 PM

#14764

dmatz327

veteran

Join Date: Jul 2013 Posts: 2,836

Quote:

Originally Posted by housenuts

Problem with this if you are a U.S. taxpayer is you can't net your gambling wins and losses like that unless you are filing as a pro on schedule C. That sure would make it a whole lot easier.

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07-29-2014 , 11:46 PM

#14765

WiltOnTilt

veteran

Join Date: Aug 2004 Posts: 2,893

Quote:

Originally Posted by DrawNone

if anyone is playing on Betcoin, or considering it, they should read this thread.

thanks for posting, wow

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07-30-2014 , 10:26 AM

#14766

housenuts

1st Quartiled the 500

Join Date: Jul 2004 Posts: 49,725

looking to run a bitcoin nfl survivor pool
http://forumserver.twoplustwo.com/46...-pool-1463304/

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07-30-2014 , 11:28 AM

#14767

bucktotal

old hand

Join Date: May 2006 Posts: 1,667

bitpay: free - unlimited - forever

http://blog.bitpay.com/2014/07/29/bi...d-forever.html

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07-31-2014 , 11:10 AM

#14768

Praetor

Carpal \'Tunnel

Join Date: May 2006 Posts: 11,807

how are they going to make money if they dont charge any fees?

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07-31-2014 , 11:26 AM

#14769

LozColbert

Pooh-Bah

Join Date: Jul 2004 Posts: 3,646

freemium model

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07-31-2014 , 12:13 PM

#14770

bucktotal

old hand

Join Date: May 2006 Posts: 1,667

Quote:

Originally Posted by Praetor

how are they going to make money if they dont charge any fees?

well, they can still charge markups when they sell the coins (privately).

this move likely means their investors are getting more impatient to collect bitcoins. first step is lowering processing fees to 0%.

Next step is when they start offering increasingly more favorable exchange rates to encourage even more spending? ... then merchants offering discounts, etc...

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07-31-2014 , 12:24 PM

#14771

Happy_Fish

Carpal \'Tunnel

Join Date: Mar 2012 Posts: 7,497

It seems to me like some sort of tiered service, where you get X free but if you want more features you pay extra.

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07-31-2014 , 01:22 PM

#14772

WiltOnTilt

veteran

Join Date: Aug 2004 Posts: 2,893

maybe they will do like banks, no fees on currency conversion just terrible spreads

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07-31-2014 , 01:39 PM

#14773

aggo

Carpal \'Tunnel

Join Date: Feb 2008 Posts: 10,422

nah they still charge businesses that do lots of volume for their services. If you need accounting done, programming, and tech support they will charge you.

all they are doing is removing a barrier of entry and scooping up as many small merchants and users as possible. It's a race to collect as many businesses before the real boom occurs 2-8 years down the road.

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07-31-2014 , 05:22 PM

#14774

Bitcoin boom

journeyman

Join Date: Nov 2013 Posts: 361

Quote:

Originally Posted by WiltOnTilt

maybe they will do like banks, no fees on currency conversion just terrible spreads

This.

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07-31-2014 , 10:09 PM

#14775

TomCollins

Carpal \'Tunnel

Join Date: Jul 2003 Posts: 43,058

Quote:

Originally Posted by aggo

The last part is the biggest thing IMO. They want to be the standard and will do what it takes to get there. They have enough funding to last a while and get the ecosystem built. It wouldn't surprise me if the funding they got was dumped into Bitcoins a lot, so they grow Bitcoin, they grow themselves. Spread is also something that they can control if they have motivated buyers.

Keeping the price down by encouraging more merchant adoption is also a good idea if they are trying to acquire coins cheaply now.

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