BTC Taxation

1. On November 1, 2008, a self styled Satoshi Nakamoto posted a research report on a secret cryptography discussion group. The report expounded his new idea of electronic currency bitcoin came out
on January 3, 2009, Nakamoto g up the first batch of 50 bitcoins on a small server in Helsinki, Finland
on May 21, 2010, the first bitcoin transaction: Laszlo hanyecz, a Florida programmer, bought a $25 pizza coupon with 10000 BTC
on July 16, 2010, the price of BTC rose by US $0.08 from US $0.008. The first sharp price fluctuation shows the rise of new things
on July 17, 2010, the first bitcoin platform was established
on November 6, 2010, the price on mtgox reached $0.5, and the bitcoin economy reached $1 million
on December 7, 2010, the first portable device to portable device transaction was realized on Nokia 900, with a transaction volume of 0.42btc
on February 9, 2011, the price reached US $1 for the first time, which is equivalent to US $1. The news that BTC is equivalent to us dollar has been widely reported by the media, which has aroused people's great attention, and the number of new users has increased greatly. In the next two months, bitcoin and pound sterling, Brazilian currency, Polish currency exchange trading platform has opened
on March 18, 2011, the BTC / USD exchange rate hit a seven week low, falling to US $0.7
on August 20, 2011, the first bitcoin conference and World Expo were held in New York. Among Google trend counties, bitcoin's attention reached a new high, with a price of $11 at that time
on November 14, 2011, the price of bitcoin hit a new half year low of $1.99
on September 15, 2012, the bitcoin conference was held in London. At this time, the price of bitcoin was $11.8
on September 27, 2012, bitcoin fund was founded, and the price of bitcoin was $12.46
on November 25, 2012, the first bitcoin conference in Europe was held in Prague, Czech Republic. At this time, the price of bitcoin was $12.6
on February 19, 2013, bitcoin client v8.0 was released. At this time, the price of bitcoin was $28.66
on April 10, 2013, BTC set a record high price of $110
on May 9, 2013, BTC Chinese, the largest bitcoin reporting website www.sosobtc.com The company obtained the investment fund Union Square's US $5 million round a investment, and the price of bitcoin was US $112.09 at this time< On May 28, 2013, the Department of Homeland Security banned the virtual currency service of Liberty Reserve, a Costa Rican exchange company, for its suspected xiqian and unlicensed fund transfer business, U.S. prosecutors said that this will become the largest international xiqian lawsuit in history, with the scale of absorbing money reaching 6 billion US dollars. A large number of users, including China, will lose all their money. At this time, the price of bitcoin is 128 US dollars
in June 2013, Netcom said that the United States will withdraw from qe3, deflationary bitcoin and quantitative easing monetary policy, which are the relationship between the two
on June 27, 2013, the German Conference made a decision: holding bitcoin for more than one year will be tax-free, which is considered by the instry to recognize the legal status of bitcoin. At this time, the price of bitcoin is $102.24
on June 28, 2013, mtgox obtained the monetary service license issued by the financial crime enforcement network office of the U.S. Department of the Treasury. Transaction standardization may mean that bitcoin is on the right track, government risk is reced, and its pace of integration into the display economy will be accelerated. At the same time, it will play an exemplary role in other virtual currencies. At this time, the price of bitcoin is $97.99
on November 28, 2013, the bitcoin trading price of Mt. GOx, a popular bitcoin exchange, broke through $1000, reaching a record high of $1073
on November 29, 2013, the trading price of bitcoin on Mt. GOx, a popular exchange, hit a record high of US $1242, while the price of gold was US $1241.98 an ounce, surpassing that of gold for the first time.

2.

According to the regulations of notice 2014-21 of the IRS:

1. The information range of virtual currency payment is consistent with that of other property payment

2. Virtual currency paid to service providers and independent contractors should be taxed, and the tax rules of freelance also apply to virtual currency. Taxpayers usually have to get form 1099-MISC

3. When using virtual currency to pay wages to employees, they must also pay taxes, and they also need to pay federal income tax and payroll tax

4. The third party accepting virtual currency settlement payment on behalf of the merchant must report the payment status in form1099-k, payment card and the third party network dealer

5. Based on the fact that the virtual currency in the hands of taxpayers is a kind of capital asset, the gains or losses in the transaction of virtual currency and the sales of virtual currency need to be taxed

extended information:

legal status of bitcoin in China

in China, the regulations on the administration of RMB prohibit the proction and sale of token tickets. Because there is no clear judicial interpretation of the definition of token ticket, if bitcoin is included in the "token ticket", the legal prospect of bitcoin in China will face uncertainty

the notice of the Ministry of culture and the Ministry of Commerce on strengthening the management of virtual currency of online games (Wen Shi Fa [2009] No. 20) on June 4, 2009 stated that the application scope of virtual currency of online games was defined for the first time, and the distinction between the current virtual currency of online games and the virtual props in the game was made; At the same time, the notice said that the "notice" stipulates that enterprises engaged in related services must be approved before they can operate< br />

3. In the digital currency community, bitcoin is considered as currency, but according to the 12.5 notice of the central bank and other five ministries and commissions, bitcoin is defined as a special Internet commodity, and people can buy and sell it freely at their own risk. Last August, Germany defined bitcoin as a unit of account, a private currency. Some people think that bitcoin is a kind of taxable property, while others think that bitcoin is money.

4. A wise man once said that once a man is born, he cannot escape taxes and death. However, when the concept of bitcoin was proposed, there was a glimmer of hope that most of us thought we might be able to evade taxes. Unfortunately, this was a flash in the pan, as the IRS decided to tax virtual currency holdings. Now, bitcoin is regarded as an official asset by various government agencies in the United States, so it has to pay taxes
How do we know what should and should not be taxed? Now, we have some experts who can help us understand, but if you are involved in cryptocurrency and live in the United States, it will be easier. Laura shin is such a kind and helpful person. She explains how to deal with digital currency and the IRS when it comes to taxation. Her article in Forbes clearly explains the different sources of bitcoin and digital currency. First, all digital monetary assets are regarded as capital assets like stocks and bonds. The IRS calls cryptocurrency an asset in its guidance 14-21
there is only one way to own digital currency or spend it, and that is to start mining. If you succeed in mining some bitcoin, any block reward you may get depends on the amount of bitcoin you get and the market value at that time. It's very important to have the right record, because the value of bitcoin is bound to fluctuate, and you never know how much bitcoin is worth when you pay taxes. The calculation of tax depends on whether it is a long-term or short-term capital gain
do you get a return in bitcoin? The good news is that if you try to save some, and the price of bitcoin goes up, your salary could double. The bad news is that you'll pay income tax on wages and VAT on assets that hold the subsequent gains in bitcoin. However, it is best to record the actual value of legal tender when payment for services is received
if your salary is paid in the form of bitcoin, you may want to spend some in the form of bitcoin itself (for others who own bitcoin by any means). The expenditure of any bitcoin is equivalent to the sale of assets, and the gain or loss will occupy the holding period. So in order to find out the holding period, people have to know which bitcoin they are selling and when they receive a special bitcoin, which is almost impossible unless you use a new wallet for every transaction. A better way is to have a set of predefined rules for all bitcoin revenues and expenditures. Laura suggests the implementation of LIFO or FIFO accounting methods
if you give or accept bitcoin as a tip or gift, it is best to publish or ask for information about the cost base and date of digital currency. If this could be done, it would be easier to calculate capital gains. Otherwise, in the absence of information, people can always explain it in terms of income and get out of trouble. If you are donating to a registered charity, the digital currency unit income from the donation can be written off from the account, which is not taxed. Laura suggests using digital currency donations to rece taxes
when trading bitcoin, it is wise to keep a record of the fair market value on the date of the transaction. If a trading platform or transaction issues a 1099-b report, this will help record the profit and loss. These suggestions will come in handy for those who are already working on bitcoin and want to know how to track the gains and losses of their digital currency.

5. China's financial market itself is a financial system that has not developed for a long time. If our country does not reform and manage well in the overall development, then China's financial market will be more chaotic. The situation of China's stock market and futures market has graally improved, and the investment environment has changed. Of course, as a financial planner, I still suggest that you do not enter the stock market for about three years. After all, the next three years will be economic transformation, with great risks

the stock market and futures market are part of the normal financial market. However, I am very puzzled that there is a market for bitcoin in China now. This kind of bitcoin is obviously a scam, and it has harmed countless people. It should have been banned for a long time. However, there is a news recently that bitcoin has to charge the so-called service fee, which is really incomprehensible, Does the state allow certain scams to continue

we need to point out that bitcoin trading in China started very late and has long passed the good time of bitcoin. Now most countries in the world prohibit the bitcoin market, and many developed countries have special documents, because bitcoin is fraulent to a certain extent, and it attracts people through a virtual thing, It is very easy to cause losses to the people, and the state should have resolutely stopped it for a long time

the three major bitcoin trading platforms in China are themselves irregular platforms. For the country, it is the most important thing to protect the vital interests of the people. Now the so-called bitcoin platform has to start charging transaction service fees, which is even more inconceivable. Why can such irregular things show off in China, It shows that our country's supervision is not enough, and we need to continue to strengthen it

it is suggested that the national government should ban such illegal transactions as soon as possible, so as not to mislead the people and suffer losses in these deceptions. Bitcoin was invented by the Japanese, but even Japan seems not to allow bitcoin trading, so China should respond quickly, eliminate these irregular markets directly, and create a harmonious financial investment market for the common people. This is the most important thing.

6.

Recently, the U.S. Supreme Court said in a lawsuit that with the growth of time, people's views on money will change greatly, or bitcoin will become a form of compensation for employees one day in the future. It is understood that the US Supreme Court said for the first time in its ruling the existence of bitcoin

On June 21, the Supreme Court of the United States made a ruling in the case of Connecticut central Co., Ltd. the dispute involved in this case is whether the recognized stock option can be taxed in the same way as money as a way of compensation

it is understood that the subsidiary of Canadian national railway company lost the lawsuit at the beginning, and the district court and later the court of Appeal ruled that the tax on stock options was based on the US tax law

However, according to the opinion released on Thursday, the US Supreme Court's decision on lease out determined that the shares would not be included in the monetary reward, and the case should be "further litigated in accordance with this opinion". For more details, please click

7. Bitcoin is not legal currency. It's just a virtual currency in the Internet world. To be honest, it can't be used for circulation. Legal currency, such as China's RMB, the world's Euro, U.S. dollar and so on, this is.

8. I want to say that this netizen misunderstood bitcoin. Bitcoin is not banned in China. Bitcoin in China is defined by the central bank as a kind of special and Internet goods, citizens can buy and sell freely at their own risk. What the central bank denies is the monetary nature of bitcoin. In some other countries in the world, the bitcoin generally adopts a cold treatment attitude, and the qualitative difference of the bitcoin is very big. Germany is the most open-minded and defines bitcoin as a private unit of account and private currency. Australia regards bitcoin as a kind of property, which needs to be taxed. In the United States, some people regard bitcoin as property, while others do not. Even the statements of various departments are different, sometimes even contradictory

bitcoin has entered a stage of rational development, bitcoin has been recognized by more people, bitcoin start-ups have sprung up all over the world, and bitcoin related companies have become the love of venture capital companies. As for bitcoin's extrication from the predicament, it should be the sharp rise of bitcoin's price. I feel that the big fluctuation of bitcoin's price is not necessarily beneficial to the ecosystem of bitcoin. Bitcoin should go through a long and slow stage of self-development, self-improvement and self maturity.

9. In the digital currency community, bitcoin is considered as currency, but according to the 12.5 notice of the central bank and other five ministries and commissions, bitcoin is defined as a special Internet commodity, and people can buy and sell it freely at their own risk< In August last year, Germany defined bitcoin as a unit of account, a private currency. Some people think that bitcoin is a kind of taxable property, while others think that bitcoin is money.