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Because BTC is wothless. Or rather that is what you could try to claim. If I mine a bunch of BTC and then pay you with it, I have not assigned any value to it. And if you never convert it to USD, you do not assign value to it either. When you fill out your tax forms, what would you put for its value? Moreover the IRS has no standard way to measure it. They cannot use Mt Gox any more than they can use Craig's list. The BTC is way too small and fluctuates too much to be accurately measured unless USD is involved somewhere.

I am not a lawyer or a CPA and the above is just a theory, not advice.



If I give you 1 bitcoin and you give me a donut, we've agreed that 1 bitcoin is worth a donut.

(it is similar to the situation with barter, in the U.S. it is taxable and the IRS will expect you to put a dollar value on the income and be able to defend the valuations you use)



I believe that is why coupons say they are worth $0.0001

Guy wins free donuts and is issued a $237 tax bill.

http://sports.yahoo.com/mlb/blog/big_league_stew/post/Astros...


It could be worse than a regular barter transaction, because the IRS could be looking for capital gains on your bitcoins as well.


If you aren't sure, you can ask the IRS.




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