Here are the latest items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on Bitcoin taxes.
Precious Metals:
Mike Maloney’s Update On the Gold/Silver Ratio
Stocks:
At Reuters: Dow, S&P snap winning streak as Walmart weighs
Taxes (Bitcoin Taxes):
SurvivalBlog reader Janet X. sent us a scary little snippet from Martin W. Armstrong: Cryptocurrency Maybe Become a Tax Nightmare. JWR’s Comments: While there could indeed be accurate tax tracking of Bitcoin purchases (or sales) through exchanges, what about Bitcoin fractions that are gifts, trades, or personally mined? Can you imagine what a tax audit would be like for someone who trades, gifts, or sells such BTC at a later date? Imagine this series of questions: “What was the US Dollar value when you mined it?” “And what was the US Dollar value on the day that you received it?” “And what was the US Dollar value on the day that you spent or traded it?” Yikes!
With Bitcoin prices all over map in a wild rollercoaster ride for the past three years, who is to say what this crypto’s relative Dollar value was at those precise “taxable event” days or hours? This would be especially confusing for Bitcoin mining, which is often done very gradually. When is the taxable event Dollar-value benchmark for miners?
Consider that from 2014 to 2017 the Dollar value of a Bitcoin ranged from $4 to as high as $20,000. Then In January 2018 it was back down to $6,000. Now (as of February 20th, 2018) it is back up over $10,800. Those tax calculations might be almost impossible to make accurately!
Economy and Finance:
Revealed: Cash eclipsed as Britain turns to digital payments
Tangibles Investing:
Collecting Antique Swords and Edged Weapons Today
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. So please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often “get the scoop” on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
Bitcoin Taxes.
The feds are going to let this run for a while. I don’t think you have to worry about Bitcoin taxation perhaps for several years. When the feds and states are interested in a new company, biz model, or other advancement they tend to have a very hands off approach until…well…they don’t anymore. Take amazon for instance. They let them run wide open for 20 years before mentioning that they might want to start withholding state sales taxes. I think we’ll be fine on the taxation front for several years with crypto cash. After all, the feds have a vested interest (power and money, same as always) in the cashless society. They will continue to let it mature even as they talk about regulation and have hearings and blah, blah, blah.
Of course, they might not wait but I doubt it.
What will you do in 20 years when the Feds seize everything you have until you can prove you paid all the transaction tax on your crypto’s?
I’ve been warning people for a while about crypto currencies. The government NEVER misses an opportunity to tax something. I would get rid of your crypto currency altogether, before they figure out how to tax it completely.
What will I do? Nothing. I don’t own any Bitcoin right now but if it survives I’ll wait until the ‘desert of despair’ * after the crash (presuming Buffett is right) to buy it, if it survives. But one thing is for sure, I’m 100 percent prepared to miss my chance right now…buy low, sell high…right?
Anyway, this is a prepping site not an investing site. The velocity of money is just interesting to me.
*This is a fairly well established and known cycle with new technology. Not just recent electronic technology but cars and personal refrigeration 100 years ago for example.
Oh, how sad. It’s just going to be so tough to figure out when I did whatever I did with my crypto’s but golly gee I can easily figure out what percentage I’m up since I bought it.
I buy a stock and I get one piece of paper giving me the date of the transaction, the price I paid, the purchase/sell date, the settlement date and then I get a 1099 at the end of the year so the government can get theirs if there’s a profit. Simply. Easy. I don’t like paying taxes…but death and taxes you know.
The people who whine about how hard it is to keep records probably can’t remember their wives anniversary either. Or, they don’t want to pay taxes. Who does? However, the government is going to get theirs any way you slice it. Better to keep records so you don’t lose everything later. Take your profits, pay your taxes before the whole sham falls apart like Warren Buffett suggests is going to happen anyway. But at least it’s more interesting than the tulip bubble. Till it isn’t.
Yep. Cost Basis is definitely a thing.
Bitcoin Taxes
Keep good records, pay your taxes or you will someday find your self in serious trouble. Failing to report income is called Tax Evasion and it is a felony.
For that matter, as Ladywest said (and I believe she is spot on) take your profits and get out before you lose all your money. Bitcoin is nothing more than billion dollar Ponzi scheme.
I mine three coins currently and own five, including Bitcoin. The answer is easy: use a spreadsheet and have a tab for each coin or token. Record every transaction. I set my pool payouts high enough that I only get a couple of disbursements per coin per week, so it is not too time consuming to update the sheet every weekend. The tax requirements are really no different than if you buy and sell gold or silver.