Revenue Canada says BitCoins aren't tax exempt......... V

[Ponce]

Tell me again the SECRET of dealing with Bitcoins where NO ONE knows about it?
===============================================


Just in time for tax season, the Canada Revenue Agency says the users of Bitcoins will have to pay tax on transactions in the upstart digital currency.

BitCoins are a fringe online currency that entered the mainstream this year after speculators rushed in and caused their value to more than quadruple in value. Originally designed as a virtual currency alternative to conventional money, the cash value of a BitCoin jumped from under $50 US to above $250 and back earlier this month, as speculators flooded the market after awareness of them grew.

Price swings like that mean some BitCoin buyers and sellers likely made or lost a lot of money, which raises the question of how that will be handled come tax time.

The issue is not just academic. Saskatoon realtor Paul Chavady said he has listed a house priced in BitCoins, and has found clients willing to pay his fees in the electronic currency.

"When you sell [the BitCoins], they will deposit that in your account," said Chavady. "As soon as it turns into Canadian dollars, it's back in the eyes of the CRA and everybody else. If you get a big deposit of $10,000, or $100,000, [CRA is] going to say, 'Hey, where did that come from?'"

Indeed, the tax man has already thought of that.

The CRA told the CBC there are two separate tax rules that apply to the electronic currency, depending on whether they are used as money to buy things or if they were merely bought and sold for speculative purposes.

"Barter transaction rules apply where BitCoins are used to purchase goods or services," Canada Revenue Agency spokesman Philippe Brideau said in an email.

Barter is the exchange of one good for another good without the use of cash, such as when a farmer who grows vegetables trades with another who raises chickens. Many Canadians don't realize such exchanges are taxable, but they are.

Paragraph 3 of the CRA's Interpretation Bulletin IT-490 clearly states that in a barter transaction between arm’s-length persons, "we generally consider that the value of whatever is received is at least equal to the value of whatever is given up."

In the above example, that means whatever you've received in exchange for your $1 worth of vegetables must be documented as a taxable gain of at least $1 somewhere.

Investing gains
When it comes to trading BitCoins for profit, the tax man says there are tax implications there, too.

"When BitCoins are bought or sold like a commodity, any resulting gains or losses could be income or capital for the taxpayer depending on the specific facts," ruled the CRA.

That section is covered in paragraphs nine through 32 of the CRA's section IT-479R, Transactions in Securities, "which provide general comments for purposes of determining whether transactions are income or capital in nature."

Regina currency trader Jeff Cliff already had that figured out. He's been trading BitCoins for three years and said he claims them on his taxes by converting it to the Canadian dollar equivalent. But, Cliff said, it is an honour system.

"It's fairly anonymous system," he said. "I'm not so much into the privacy side of it, so that's why I claim it."

Some advocates of the electronic currency, which only exists as unique codes in complex crytpographic algorithms, have said one of its advantages is that it can be traded and moved across national boundaries without governments being aware.

But as the CRA statement shows, governments are starting to pay attention.

http://www.cbc.ca/news/business/story/2013/04/26/business-bitcoin-tax.html

[vacuum]

I saw this yesterday, basically they're just saying that bitcoin transactions are like any other barter transactions and therefore tax applies to them. Of course there's always a difference between the laws on the books and the ability to enforce those laws. The only real way the tax man can enforce this is when you withdraw btc to cash and they question where all that cash came from. However, if the btc is spent on other goods and never converted back, it becomes much more difficult.

[EE_]

Sure looks like the beginning of the global digital currency the NWO has been planning for years, to me.
I think anonymity will only be temporary.
Eventually bitcoins will have to be deposited in accounts somewhere to settle debts.
This could be the end of hard currencies?
Viva la NWO!

[vacuum]

Sure looks like the beginning of the global digital currency the NWO has been planning for years, to me.
I think anonymity will only be temporary.
Eventually bitcoins will have to be deposited in accounts somewhere to settle debts.
This could be the end of hard currencies?
Viva la NWO!

What's better/worse: centrally controlled physical money or decentralized electronic money?

The problem with centrally issued money is that it finances the machine and keeps it running. It's not as easy to control on an individual-basis, but in the aggregate it funds all of the control mechanisms. Decentralized electronic money is, theoretically, easier to control at the individual level than cash but it doesn't fund all the control mechanisms. And in reality it is a much closer to cash than typical debit or credit card use.

Cash is only 3% of the money supply, so we're already 97% centrally controlled digital money. What would the benefit be of going from 97% centrally controlled electronic money to 100% decentralized electronic money? Especially if it becomes a gold + bitcoin system.

Gold + bitcoin is much better than cash + checkbook money. The main issue right now is the deflationary nature of the former (see my thread here (http://gold-silver.us/forum/showthread.php?69036-A-Monetary-Blind-Spot)).

[EE_]

What's better/worse: centrally controlled physical money or decentralized electronic money?

The problem with centrally issued money is that it finances the machine and keeps it running. It's not as easy to control on an individual-basis, but in the aggregate it funds all of the control mechanisms. Decentralized electronic money is, theoretically, easier to control at the individual level than cash but it doesn't fund all the control mechanisms. And in reality it is a much closer to cash than typical debit or credit card use.




Cash is only 3% of the money supply, so we're already 97% centrally controlled digital money. What would the benefit be of going from 97% centrally controlled electronic money to 100% decentralized electronic money? Especially if it becomes a gold + bitcoin system.]).

I would think that 3% of the money supply represents all the black market, underground untaxed economy and is what they want to get rid of.



Gold + bitcoin is much better than cash + checkbook money. The main issue right now is the deflationary nature of the former (see my thread here (http://gold-silver.us/forum/showthread.php?69036-A-Monetary-Blind-Spot)).

At this time for me, gold and cash can be carried in my pocket and used to purchase most things anonymously.
Checks have and bitcoins may have a trail.

If you would be kind enough to walk through the process on bitcoins...
1. Say I have $150,000 cash on the table and want to get it to Canada and get it in cash...how does the process work exactly?
2. Say someone buys a Ferrari from me for $150,000 using bitcoins...how do I get the cash?

Thanks in advance,
EE

[vacuum]

If you would be kind enough to walk through the process on bitcoins...
1. Say I have $150,000 cash on the table and want to get it to Canada and get it in cash...how does the process work exactly?
2. Say someone buys a Ferrari from me for $150,000 using bitcoins...how do I get the cash?

Thanks in advance,
EE

1) Going from cash and bitcoins in this scenario is exactly like going from cash to gold then back from gold to cash. There are two options in either case:

(a) You can wire the $150k to an exchange through a bank account, and buy bitcoins on exchange. Then you at the other location, you sell them on the exchange and get the cash wired to your bank account.

(b) The second option is to find someone who wants $150k worth of bitcoins, you bring the cash, he brings the bitcoins. You do the exchange with your laptops in a park or something, and when the transaction clears, you let him leave with the cash. It's just like finding a private buyer for gold and doing the exchange in person. It might not be easy to find the right person for such a large amount, and it might not be the safest thing, so the same disadvantages exist (if you get in a gun battle it might be more difficult to explain what's going on to the police).

So the actual conversion process is very close to converting to precious metals. Of course once it's converted, it can be transported to another country much more easily.

2) The same way if you sold the Ferrari for $150k worth of gold. You could either send it to an exchange like APMEX and get the money wired to your bank account (and have a paper trail), or you could find a private buyer looking for bitcoins and you do a private exchange in a public place.

[joboo]

China has banned virtual currencies.

Basically what's happening is the bankers are starting to freak out a bit, and taking precautions to protect their fiat.

If this is a NWO scheme, I'm having a hard time seeing it as it's all wrapped up in a tight little encryption package, that can be further encrypted, and anonymized, that prevents the crypt fingers from getting their prying hands on it.

AHa!!! Whats that file!?!!! I dunno, you got 25 billion years to try and find out?...maybe waterboard me, I forgot the password....it's either a grocery list, or a million dollars....you decide.


I should add, the royal bank in Canada shut down two btc online exchange accounts with no explanation.

Like I mentioned earlier, it's happening right now...zig, zag, should get interesting. It's like the bit torrent saga all over again.

[Horn]

Say someone buys a Ferrari from me for $150,000 using bitcoins...how do I get the cash?

Put them up for sale, and prey they don't lose more than half their value in less than 10 hours

[vacuum]

Put them up for sale, and prey they don't lose more than half their value in less than 10 hours

Sometimes it's better than the alternative...

I live in Cyprus and as you already know, the nation's second largest bank has gone bankrupt while the largest bank (BoC) has enforced a 90% haircut on uninsured deposits.

http://www.reddit.com/r/Bitcoin/comments/1dd0bo/help_make_bitcoin_the_new_currency_of_cyprus/

[Ponce]

I would simply reach into my pouch and give him six one oz siver rounds hahhhaahaahahah

V

[EE_]

1) Going from cash and bitcoins in this scenario is exactly like going from cash to gold then back from gold to cash. There are two options in either case:

(a) You can wire the $150k to an exchange through a bank account, and buy bitcoins on exchange. Then you at the other location, you sell them on the exchange and get the cash wired to your bank account.
Nothing anonymous about that. I can buy gold with cash anonymously and sell it for cash anonymously.
If you have to get your money deposited into a bank account what's the difference from just wiring the funds?


(b) The second option is to find someone who wants $150k worth of bitcoins, you bring the cash, he brings the bitcoins. You do the exchange with your laptops in a park or something, and when the transaction clears, you let him leave with the cash. It's just like finding a private buyer for gold and doing the exchange in person. It might not be easy to find the right person for such a large amount, and it might not be the safest thing, so the same disadvantages exist (if you get in a gun battle it might be more difficult to explain what's going on to the police).
The only advantage here is the safety of not carrying a large sum of money that can be taken.


So the actual conversion process is very close to converting to precious metals. Of course once it's converted, it can be transported to another country much more easily.
Not anonymous like converting precious metals.


2) The same way if you sold the Ferrari for $150k worth of gold. You could either send it to an exchange like APMEX and get the money wired to your bank account (and have a paper trail), or you could find a private buyer looking for bitcoins and you do a private exchange in a public place.
Sounds like you will need to go through a bank to get cash with bitcoins.
With precious metals, I can walk into my dealer and walk out with $150k in cash anonymously.

[Shami-Amourae]

Tell me again the SECRET of dealing with Bitcoins where NO ONE knows about it?

It's anonymous or not anonymous if you want it to be. If you want to anonymous simply create a new address for every transaction and no one will know who you are or where you got your Bitcoins from. Again, this was thought out. The cryptocurrencies were designed to get around tyrannical governments.

Think of it like if you take cash to buy a TV at Walmart. You'll pay taxes and the government will have a paper trail. You can also go on Craigslist, meet someone up online who is selling a TV, and pay cash for it WITHOUT there being a tax. The beauty of cryptocurrencies is it allows you to do these transactions like you can do with either examples, and be electronic/online. Bankers/Governments are scared shitless over this for a reason, because it was DESIGNED to DESTROY them.

I have my entire business setup now where I can take 100% of my profits in Bitcoins, and NEVER report any income. Of course, I don't do that since it wouldn't make sense to be living and not having any reported income coming it. It would raise red flags. I want other people to do this.


Finally, anytime you see Bitcoin spelled "BitCoin", you know the author doesn't know WTF they are talking about. Every single article where it's spelled "BitCoin" it's ALWAYS negative, and is always done by someone who doesn't understand how it works.

[EE_]

China has banned virtual currencies.

Basically what's happening is the bankers are starting to freak out a bit, and taking precautions to protect their fiat.
Maybe not freaking out, maybe moving in?


If this is a NWO scheme, I'm having a hard time seeing it as it's all wrapped up in a tight little encryption package, that can be further encrypted, and anonymized, that prevents the crypt fingers from getting their prying hands on it.
A NWO currency will be all digital no hard currency. Once thay have it, you will no longer be able to sell your gold anonymously. You could still barter with silver and gold however. What else will you use when there is no longer cash?


AHa!!! Whats that file!?!!! I dunno, you got 25 billion years to try and find out?...maybe waterboard me, I forgot the password....it's either a grocery list, or a million dollars....you decide.
You will let them know if/when you want to get out of jail.



I should add, the royal bank in Canada shut down two btc online exchange accounts with no explanation.

Like I mentioned earlier, it's happening right now...zig, zag, should get interesting. It's like the bit torrent saga all over again.

Canada likes bitcoin...they just don't like getting cut out.

[Shami-Amourae]

The NWO wants a CENTRALIZED virtual currency. We in the crypto-anarchist movement want a DECENTRALIZED virtual currency. The difference is NIGHT and DAY.

No matter what its going to be a virtual currency. The question is do you want to be a slave and restrained by technology, or do you want to be free and empowered by technology? The more we try to go back to "the old ways" the quicker the Elite will get their CENTRALIZED virtual currency. Time is limited.

[Horn]

I would simply reach into my pouch and give him six one oz siver rounds hahhhaahaahahah

V

I would definitely wait until after Cyprus happens before purchasing the Ferrari,

that I would only be caught dead in.

[vacuum]

With precious metals, I can walk into my dealer and walk out with $150k in cash anonymously.
I doubt this is possible. Any transaction over $10k requires government forms to be filled out. And when you sell PMs, a lot of places require ID due to the chance they could be stolen property.

[7th trump]

China has banned virtual currencies.

Basically what's happening is the bankers are starting to freak out a bit, and taking precautions to protect their fiat.

If this is a NWO scheme, I'm having a hard time seeing it as it's all wrapped up in a tight little encryption package, that can be further encrypted, and anonymized, that prevents the crypt fingers from getting their prying hands on it.

AHa!!! Whats that file!?!!! I dunno, you got 25 billion years to try and find out?...maybe waterboard me, I forgot the password....it's either a grocery list, or a million dollars....you decide.


I should add, the royal bank in Canada shut down two btc online exchange accounts with no explanation.

Like I mentioned earlier, it's happening right now...zig, zag, should get interesting. It's like the bit torrent saga all over again.

Your premise is wrong Book.
The central bankers are not worried about bitcoin.......its the government itself who's worried about getting its fair share.

[vacuum]

Your premise is wrong Book.
The central bankers are not worried about bitcoin.......its the government itself who's worried about getting its fair share.

You're correct 7th trump on this article in the OP. Elsewhere, however, most banks are now shutting down any bank accounts used by exchanges dealing in bitcoin. See this post (and the entire thread):
http://gold-silver.us/forum/showthread.php?68831-Regulations-crackdowns-seizures-government-intervention&p=630109#post630109

[Horn]

If you sold 233.3 Ferraris at $150k= in Litecoins each,

you could corner the entire market.

[EE_]

I doubt this is possible. Any transaction over $10k requires government forms to be filled out. And when you sell PMs, a lot of places require ID due to the chance they could be stolen property.

Any time you give a business $10,000 or more in cash, form 8300 will have to be filed.
The place of business does not file when they give it to you.
I've sold over $10,000 at a pop and have seen much larger amounts of cash given to sellers.

[Shami-Amourae]

The central bankers are not worried about bitcoin

All banks are afraid of cryptocurrencies. With cryptocurrencies we never need banks anymore. Honestly I think it's the biggest threat to banking in all human history, and I believe it will be what finally destroys all banking once and for all unless we keep ignoring it as the solution. We don't have to have any middlemen in between our money anymore since it's all Peer 2 Peer. The alternative that we know of is all centralization, and it sucks since its centralization.

[vacuum]

All banks are afraid of cryptocurrencies. With cryptocurrencies we never need banks anymore. Honestly I think it's the biggest threat to banking in all human history, and I believe it will be what finally destroys all banking once and for all unless we keep ignoring it as the solution. We don't have any middlemen in between our money anymore since it's all Peer 2 Peer. The alternative that we know of is all centralization, and it sucks since its centralization.

Watch this presentation to understand exactly how bitcoin can totally destroy banks:


https://www.youtube.com/watch?v=mD4L7xDNCmA

It's got built-in contracts, escrow, arbitration, loans, crowd funding, potentially even investment instruments....all in a trustless environment. Must see.

[EE_]

Most of the younger gererations don't care about privacy, they don't care that everything they say and do is tracked.
To them it is a necessary evil to use new technologies.
Most of that same generation no longer even use cash. I can see why so many think this is the greatest thing.
We are going to a digital currency, whether we like it or not. We are well on our way to end the cash based economy.

As far as destroying the bankers with a cryptocurrency...I don't believe it can happen.
Ask yourself, if you could print the money of the world, what would you do to keep that power?
If you were a banker that could lend money created out of thin air...would you let anyone take that from you?
They will not go down without a fight. They will probably use the Samson Option on all of us.

[Son-of-Liberty]

The CRA(yeah like you are going to believe a bank robber telling you it is OK to rob the bank) told the CBC there are two separate tax rules that apply to the electronic currency, depending on whether they are used as money to buy things or if they were merely bought and sold for speculative purposes.

"Barter transaction rules apply where BitCoins are used to purchase goods or services," Canada Revenue Agency spokesman Philippe Brideau said in an email.

Barter is the exchange of one good for another good without the use of cash, such as when a farmer who grows vegetables trades with another who raises chickens. Many Canadians don't realize such exchanges are taxable, but they are.

Paragraph 3 of the CRA's Interpretation Bulletin IT-490 clearly states that in a barter transaction between arm’s-length persons, "we generally consider that the value of whatever is received is at least equal to the value of whatever is given up."

In the above example, that means whatever you've received in exchange for your $1 worth of vegetables must be documented as a taxable gain of at least $1 somewhere.
http://www.cbc.ca/news/business/story/2013/04/26/business-bitcoin-tax.html

Being a non-taxpayer I don't really have this problem but for everyone who is, this example is Bull Shit!

In barter for like value there is no gain. You gain $1 worth of chicken and lose $1 worth of vegetables. There is no gain unless you admit to CRA receiving $2 of chicken for $1 of
vegetables. The only way you would have a realized gain is if you convert to $. These fuckers forget to tell you that.

Lets say I trade a motorbike I think is worth $4000 for a car that I think is Worth $6000. I tell the CRA I have a $2000 gain and pay tax on it. Then I go to sell the car and find out the transmission is shot and can only get $3000 instead of $6000 for a $1000 loss. Is the CRA going to give me my money back? Where is the realized gain here?

You can trade Bitcoins all you want and never have a realized gain until you convert to $$$.

The CRA is misleading the public trying to make Bitcoin look bad.

[Son-of-Liberty]

Even though there is a permanent record of transactions in Bitcoin it is as private as the user wants it to be. You can mine it, trade it and buy goods and services with it, with out ever attaching your name to it. You can buy Bitcoin or sell Bitcoin for cash in person. How are these traits any different then PM's?

You can bet your ass the bankers hate Bitcoin.

[joboo]

Maybe not freaking out, maybe moving in?


A NWO currency will be all digital no hard currency. Once thay have it, you will no longer be able to sell your gold anonymously. You could still barter with silver and gold however. What else will you use when there is no longer cash?


You will let them know if/when you want to get out of jail.




Canada likes bitcoin...they just don't like getting cut out.


Bitcoin is the same as cash, or pm's but in digital form. Ideally people remove the banks from the equation altogether, and trade directly in a currency created by the people for the people. You can actually make this stuff yourself, as can anyone. Try printing up some truckloads of cash, and see what happens. Digital format is the only thing thats going to fly right now, as it's encrypted...no evidence of what it is if desired.

The day people start getting tossed in jail over suspicions of what an encrypted file could be in their posession will be quite the interesting scenario indeed. It's basically over at that point, FEMA camp paradise, line up to get your meal for the day, and back to the rock pile.

Then there's the security aspect....I'd rather lose a Phone, or usb key, than a bag of gold en route to make a purchase. Using pm's is one thing, carrying them around all over the place is another, which is where the paper notes came from in the first place.

This could all spiral out of control very quickly, as the convenience factor is huge, which is why cash caught on so well, and plastic even moreso. If people trade bitcoins back and forth for goods, the banks are going to feel the pain, and they know it.

Their options are play along, and grab some transaction fees, or get side stepped altogether. Exact same thing as bit torrent.

[Ponce]

As with the example of the Ferrari.......You sell the car for bitcoins and the next day the bitcoins looses 50% of its value, you just gave away the car for half its value but the buyer still has the car at full value............... sell it for physical silver and the next day you still have the full value of the car....It could happen to silver but at a slower pace.

V