Bitcoins in 2014?

websaway · Mar 25, 2014

Monkey said:
I don't see anything groundbreaking or even interesting in that, I don't understand why anyone even cares (multiple posts on Reddit about it too).

It seemed pretty obvious that capital gains tax was going to apply to it, so I'm not sure how investing in it suddenly got more complicated.

But doesn't the tax treatment on transactions rule it out as a method of common exchange. If you have to calculate loss or gain on each and every transaction won't that undermine it's functionality.

Retired_Member38 · Mar 25, 2014

I guess nobody is going to notice/care once it settles down. If you buy a bitcoin from your taxed income for $1000 then use it to buy $1000 of random things online, there won't be any tax owed.

Evidently nobody buying/selling seems to think its a big deal either:

Last Price:
$582.00
Daily Change:
-$3.99
-0.68%

websaway · Mar 25, 2014

Monkey said:
I guess nobody is going to notice/care once it settles down. If you buy a bitcoin from your taxed income for $1000 then use it to buy $1000 of random things online, there won't be any tax owed.

Evidently nobody buying/selling seems to think its a big deal either:

Last Price:
$582.00
Daily Change:
-$3.99
-0.68%

In that case why not just use dollars ?

Edwin · Mar 25, 2014

websaway said:
But doesn't the tax treatment on transactions rule it out as a method of common exchange. If you have to calculate loss or gain on each and every transaction won't that undermine it's functionality.

Correct. That's the implication that seems to be surfacing in discussions about this ruling.

Retired_Member38 · Mar 25, 2014

So if its a big deal... why has the price not dropped at all?

It seems the only people who think its a big deal, are people who are completely failing to understand the story.

DaveP · Mar 25, 2014

Monkey, there's always Naysayers I heard these same reasons against Bitcoin years ago and I was totally put off buying any.

Now I realise... NO GUTS, NO GLORY!!!

websaway · Mar 26, 2014

DaveP said:
Monkey, there's always Naysayers I heard these same reasons against Bitcoin years ago and I was totally put off buying any.

Now I realise... NO GUTS, NO GLORY!!!

I don't understand, wasn't it at one stage $1200 and now $570
At what stage would you have showed guts ?

The US and the UK could not let this develop as it was, they would have ended up at $xxxxx, they probably could not ban it because it's not illegal and they seem to be taking the view that there is more than one way to skin a cat.

I am not a naysayer and I try to start with an open mind on most things but if someone tries to sell me tulips at £xxxx per bulb I take a second and third look.

http://www.theguardian.com/technology/2014/mar/19/bitcoin-danish-national-bank

diablo · Mar 26, 2014

In the States, the IRS has announced that Bitcoins are to be treated as property not as a currency.

That will have major back tax implications.

Edwin · Mar 26, 2014

diablo said:
In the States, the IRS has announced that Bitcoins are to be treated as property not as a currency.

That will have major back tax implications.

You know it's not going to be good when the word "retroactive" creeps into a tax related discussion

Here's the full text of the IRS document http://www.irs.gov/pub/irs-drop/n-14-21.pdf

Retired_Member38 · Mar 26, 2014

Did anyone seriously think they could buy bitcoins for $10 each, sell them for $600 and not have to pay capital gains?

It's a non story - firmly backed up by a complete non movement in price.

diablo · Mar 26, 2014

Monkey said:
Did anyone seriously think they could buy bitcoins for $10 each, sell them for $600 and not have to pay capital gains?

It's a non story - firmly backed up by a complete non movement in price.

To say this is a non-story is wrong.

What it means is that when Americans spend Bitcoins, they will have to pay capital gains tax. As Bloomberg pointed out, buying a $2 cup of coffee will result in $1 due in CGT.

Charles Allen, chief executive officer of BitcoinShop Inc., an online marketplace, said he’d like to see the IRS reconsider its decision as virtual currencies develop.

“The implications this decision will have on the Bitcoin ecosystem are far reaching, and will be burdensome for both individual users of Bitcoins, Bitcoin-focused business and for the general adoption of virtual currencies,” he said, adding that Bitcoin users will adapt to the rules.

Did anyone seriously think they wouldn't have to pay CGT? Yes, everyone in the States who considers Bitcoin a currency.

Bitcoin and other virtual currencies undermine a state's monopoly on who creates money. For me, that's a very good thing. States will disagree.

Retired_Member38 · Mar 26, 2014

Price stabilising = no cgt and it can effectively be used as a regular currency.

If it's a big deal why hasn't the price moved....

websaway · Mar 26, 2014

Monkey said:
Price stabilising = no cgt and it can effectively be used as a regular currency.

If it's a big deal why hasn't the price moved....

What would cause it to crash ?

Retired_Member38 · Mar 26, 2014

websaway said:
What would cause it to crash ?

My point is that if the IRS stuff was bad news like some people are saying it is... the price would have been battered. Look how volatile the price is... any 'real' bad news is going to knock it down 10% or more and that simply hasn't happened.

I'm off to buy more bitcoins :lol:

Edwin · Mar 26, 2014

Monkey said:
Price stabilising = no cgt and it can effectively be used as a regular currency.

If it's a big deal why hasn't the price moved....

If the price doesn't move, why would future investors want to buy it? Money has been pouring into Bitcoin because of the astronomic ramp-up in value, from sub-$10 to $1,000-ish at one point. That's enough to bring every get-rich-quick-er in existence out of the woodwork.

But take away the "double your money while you sleep" aspect and you're left with a weird quasi-but-not-really currency that - in the US at least - will now impose additional administrative overheads and potentially very real costs every time it is used.

Dig a $5 bill out of your pocket to pay for coffee, nobody cares. Pay $5 in Bitcoin and suddenly both sides of the transaction have to start accounting for the increase in value of the Bitcoin since it was mined/acquired, the price at the moment the Bitcoin is handed over, etc. etc. Even if the price is stable-ish, the IRS ruling demands additional accounting and record keeping.

At the moment, there's still a bit of a head of steam to the market which is propping up the price, since it takes time for the "latecomers" to realise that the wheels have fallen off. But once it dawns on Bitcoin holders that the first out the door are going to be the ones holding the real - rather than paper - profits, and it will be off-the-cliff time...

Retired_Member38 · Mar 26, 2014

I give up. Unsubscribe time.

Edwin · Mar 26, 2014

Monkey said:
I give up. Unsubscribe time.

Is there such a function? It would be good to automatically hide certain threads...

retired_member36 · Mar 26, 2014

Is there such a function

Scroll down, its under thread tools.. Unsubscribe from this thread

Retired_Member42 · Mar 26, 2014

The largest BTC spike in November was caused by the the US senate hearing, not the thousands of news stories about people making a quick buck. You will see a direct correlation between positive/negative events at the BTC price. Same with any stock. Investors use indicators such as the above to buy/sell - not an article on some guy buying a coin for $10 and selling it for $1000. I'm not saying there isn't a lot of it that goes on, there is, but for the big spikes, it's more than just get-rich-quickers coming out of the woodwork.

murph · Mar 26, 2014

Surely the tax owed from both parties "when someone buys a coffee using BC" situation is impossible to administer and enforce. Can't see that working...