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Sorry, I don't click on random web links. Perhaps some info on what Coinbase is would help.

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lonestarguy said:   Sorry, I don't click on random web links. Perhaps some info on what Coinbase is would help.
  It's a PC World article.  But search "Coinbase IRS" in Google, and there's a bunch of similar stuff on this.

Coinbase is a leading Bitcoin exchange.  They're headquartered in San Francisco.  Many people (I think well over a million) have accounts with them.

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IRS is going to have a field day if this is true. I doubt anyone on there pays taxes on their bitcoin transactions.

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avalon6 said:   IRS is going to have a field day if this is true. I doubt anyone on there pays taxes on their bitcoin transactions.
  Judgment day is nigh.

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IRS should be happy because i didn't claim the loss of $11,000+ on gambling...

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The IRS can get lost!!!

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darkxkiller said:   IRS should be happy because i didn't claim the loss of $11,000+ on gambling...
How can they be happy when they do not even know about the lack of such claim ??

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Unless you had 11k in winnings in the same year it wouldn't change your tax liability. Gambling losses can't offset other types of income.

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TravelerMSY said:    Gambling losses can't offset other types of income.
  that's unfortunate.

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The problem is the IRS doesn't consider bitcoin a currency, but an asset like a common stock/security. I do have a Coinbase account and their debit card. I'm no big bitcoin investor but I have used the debit card. Does the IRS expect everyone to calculate a cost basis every time you make a purchase with bitcoin, even for buying a cheeseburger?

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burgerwars said:   The problem is the IRS doesn't consider bitcoin a currency, but an asset like a common stock/security. I do have a Coinbase account and their debit card. I'm no big bitcoin investor but I have used the debit card. Does the IRS expect everyone to calculate a cost basis every time you make a purchase with bitcoin, even for buying a cheeseburger?
  
You have to pay taxes on currency exchange capital gains as well... so even if they considered it a currency they would still be showing up with a big tax bill.

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So... if I buy a whole bunch of euros and the dollar goes down against the euro, I now have a paper profit. If I convert them back to dollars, I have a gain that I should pay taxes on. However, if I go to Europe and buy a bunch of cheeseburgers, there's no tax (if I bought an asset in Europe, sold that for dollars, I should pay taxes since I'm just trying to get around the conversion).

With bitcoin, if I have a paper profit and I buy a cheeseburger, how does it work? Is bitcoin really converting that to dollars for the merchant or is the merchant accepting bitcoins as payment? If it's being converted to dollars, the profit should be taxable... if they're paying the merchant in bitcoin, then I'm guessing it wouldn't be.

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This is what I'm referring to. If bitcoin was a currency, the IRS would, in more likelihood, hassle you less:

https://coincenter.org/entry/how-is-bitcoin-taxed

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BigFatCat said:   So... if I buy a whole bunch of euros and the dollar goes down against the euro, I now have a paper profit. If I convert them back to dollars, I have a gain that I should pay taxes on. However, if I go to Europe and buy a bunch of cheeseburgers, there's no tax (if I bought an asset in Europe, sold that for dollars, I should pay taxes since I'm just trying to get around the conversion).

With bitcoin, if I have a paper profit and I buy a cheeseburger, how does it work? Is bitcoin really converting that to dollars for the merchant or is the merchant accepting bitcoins as payment? If it's being converted to dollars, the profit should be taxable... if they're paying the merchant in bitcoin, then I'm guessing it wouldn't be.


That's where this whole thing gets tricky. I'm also thinking of Zenbanx. It's a U.S. and Canadian bank that lets you keep multi-currency balances, transfer between them and use a multi-currency debit card. If you transferred money into euros when euros were low. Later the euro zoomed in value and you were able to not only buy thousands of cheeseburgers in Europe with your euros, but an entire McDonald's in Berlin, I don't think that's a capital gain because the transaction wasn't converted back to dollars.

Anyway, with bitcoin, it looks like the IRS will always win.

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If you have foreign currency that appreciates then you are suppose to pay taxes based on the USD exchange rate relative to your cost basis.

I believe there is a $200 exemption to prevent people from doing calculations on their currency appreciation when traveling and buying a cheeseburger... but for a purchase like buying a house taxes would be due if there was any significant currency gain.

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If you have foreign currency that appreciates then you are suppose to pay taxes based on the USD exchange rate relative to your cost basis.

I believe there is a $200 exemption to prevent people from doing calculations on their currency appreciation when traveling and buying a cheeseburger... but for a purchase like buying a house taxes would be due if there was any significant currency gain.

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Countries all over the world are contemplating eliminating cash. Some countries are even considering banning gold. The goal is to be able to track and/or tax every transaction.  See what is going on in India right now

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riznick said:   Countries all over the world are contemplating eliminating cash. Some countries are even considering banning gold. The goal is to be able to track and/or tax every transaction.  See what is going on in India right now
 
Another reason is negative interest rates. Negative interest rates can't work because individuals will pull their money out of banks and keep it under a mattress rather than pay interest to a bank for the privileged of saving money. If governments can take away physical currency then they can impose negative rates and effectively steal the wealth of savers. 

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