With bitcoin, there is no 1099. There is no reporting agency. No one knows about your profit. Unless some person or entity undertakes some extraordinary and very costly deep accounting investigation to find out. Who is going to do that? Do you believe the ruffians at the IRS will investigate your bitcoin transactions? Sure, the 1040 question exists: ‘Did you partake in any type of virtual currency transactions?’ But how many will answer that question honestly? Like reporting profits from swag. I’d wager few or none. The true attraction of bitcoin, the real attraction, which none will declare publicly is this: BTC transactions are virtually unaccountable and not, in reality, taxable.
Yes, the IRS says profit on bitcoin may be taxed. Just like the IRS says profit on drug trades, on criminal activity and sale of stolen items, and anything else illicit and profitable may be taxed… as the taxpayer so declares. But how many drug dealers declare their profits to the IRS? How many thieves report their profit on stolen goods as income to the IRS? Since I’m (thankfully) not an employee of the IRS, I have no idea. But a very strong and perhaps accurate suspicion is……. ZERO.
If you use two banks for your crypto transactions — first to buy; second to sell — the IRS happenstance of tracking you down and determining tax owed based on crypto profits (and prosecuting you accordingly) is as likely as Elvis showing up and singing “Love Me Tender” dressed only in pink leg warmers on your doorstep.
Bitcoin is not about saving the world from the evil US dollar. Or liberating humanity from the deadly inflationary grip of the Fed as the puerile slack-jawed fool Max Keiser says. There is no 1099. There is no reporting entity. For all intents and purposes — with the IRS as ineffectual as it is — there is no IRS. Bitcoin is about profit and evading tax. Period. Full stop. ‘nuff said.
Enjoy your crypto!
NB: notes on crypto from experience:
Very slow to transact; crypto buy/sell fees are high; due to fee arbitrage amounts for transactions, buy/sell transaction amounts are inexact; if something goes wrong with an exchange or transaction you are hosed; major exchanges block donation addresses, example SouthFront; does not perform as a true or efficient currency.
Novus Confidential 