Bitcoin, Silver, Gold, etc.... AND TAXES
I was reading an article recently on marketwatch. Here's a link to it.
Bitcoin Trader after a Discussion with his accountant
NOTE: FOR MY INTERNATIONAL READERS; Any reference to taxes and capitol gain, is based on the United States Laws. Please refer to your country's tax laws for information that applies to you.
Anyway; the gist of it, is the individual, (And most other crypto currency folks), don't know that they have to pay capitol gains tax on all their profits. Any time they sell, even if they reinvest in similar or different investments, they have to claim capitol gains on any profit from the sale.
And with Crypto Currency being a "Computer/Internet" based concept and tracking; it's almost impossible to hide any profits from the tax man. Not that I'm condoning hiding taxes you owe. Simply saying, it's going to be REAL EASY for the government to KNOW that you made a profit and didn't file your gains with your taxes. CoinBase and other entities used for tracking, selling, buying, etc. crypto currency was ordered by the courts that they have to report ALL crypto transactions.
So, what does this have to do with our "Precious Metals"? The answer is quite simple. Silver and Gold IS REAL!!!! You TOUCH IT. You can FEEL IT. You can put it IN YOUR POCKET. It is REAL MONEY. You can use it to buy something from another individual. You DON'T NEED A THIRD PARTY. With crypto currency like Bitcoin, you need a third party. At the very least, a computer system that maintains BOTH PARTIES ACCOUNTS so you can transfer from one person to another. You can't walk up to someone and say; "Hey, I'll give you this bitcoin for that row boat." and reach into your pocket and hand them a "Bitcoin". It doesn't work that way.
Also, the way that IRS, DHS, and others are set up in the government, unless you use/spend/reimburse more than $10,000 IN CASH, the bank, vendor, etc. doesn't have to report the transaction. E.g. If you go to the bank and withdraw more than $10,000 IN CASH or DEPOSIT more than $10,000 IN CASH, the bank has to fill our a federal form. Supposedly to be able to see if you're getting this cash for illegal activities. (I don't buy this reason, but it's irrelevant. The point is, if you go to a car dealer and pay more than $10,000 IN CASH, the government knows about it. They already know it if you use a credit card or a check. But when doing CASH, they have to be manually told.
Well, if you walk into a coin shop and buy 2 ounces of gold for about $2800 or 500 ounces of silver for about $9500; and you buy it in Cash, the government doesn't know you bought it. If you use a check or credit card, the government MIGHT KNOW you bought SOMETHING from that establishment, but they might not know what. But definitely with cash, there's not trail back to you that you bought any silver and gold.
And, when the time comes to sell the silver or gold back, you can go to the same or different coin shop, and as long as you don't sell back more than what will be $10,000 IN CASH that the dealer gives you, they don't have to report that to anyone. Even if they pay you with a check, (Because the coin possibly doesn't have $9,000 in cash to give you), the check simply has your name on it. It doesn't say WHAT you got the money for. In other words, the government doesn't KNOW that you sold back / exchanged silver/gold for cash/dollars.
Even if the government was to believe that you got this cash/check for selling back silver/gold, they have NO IDEA when you bought the silver/gold in the first place. What the PURCHASE price was when you exchanged for it. What the SELL price was when you exchanged it back for cash. So...... as far as they know, you got the silver at $17 an ounce, you paid $19 an ounce because of the dealer's commission, and when you traded it back, it was $19; and thus.... you didn't make ANY PROFIT. Therefor, NO CAPITOL GAINS.
I'm not saying you should try and avoid capitol gain taxes. I'm not saying you should mislead the government. I'm simply saying that when it comes to silver and gold, and as long as you aren't trading back or forth with MORE than $10,000 in CASH, the government doesn't know and won't know what your silver and gold purchases/sell are; and IF you have any capitol gain taxes owed.
But the big emphasis in this post is in the beginning. With Crypto Currencies, it's ALL ELECTRONICS. What happens if the system crashes. What happens if there's an economic Armageddon (Like what happened in Greece) and the government controlled the ATM machines, banks, computer transfers, etc.? What happens when you don't have access to your money. You can't buy food, fuel, heat, medicine, etc. If you have Silver/Gold, it's PHYSICAL!!! You HAVE IT!!! The government can't control it. You will ALWAYS have wealth that you can use to purchase, barter, trade, etc. with. Of course, I'm not talking about ETF's and other PAPER SILVER/GOLD. That is pure trash. I'm talking about PHYSICAL.
With physical, you OWN IT, you POSSESS IT, no one/government can TAKE IT, and no one else; including the government; KNOW YOU HAVE IT.
Take Care:
CYA: SE:
Bitcoin Trader after a Discussion with his accountant
NOTE: FOR MY INTERNATIONAL READERS; Any reference to taxes and capitol gain, is based on the United States Laws. Please refer to your country's tax laws for information that applies to you.
Anyway; the gist of it, is the individual, (And most other crypto currency folks), don't know that they have to pay capitol gains tax on all their profits. Any time they sell, even if they reinvest in similar or different investments, they have to claim capitol gains on any profit from the sale.
And with Crypto Currency being a "Computer/Internet" based concept and tracking; it's almost impossible to hide any profits from the tax man. Not that I'm condoning hiding taxes you owe. Simply saying, it's going to be REAL EASY for the government to KNOW that you made a profit and didn't file your gains with your taxes. CoinBase and other entities used for tracking, selling, buying, etc. crypto currency was ordered by the courts that they have to report ALL crypto transactions.
So, what does this have to do with our "Precious Metals"? The answer is quite simple. Silver and Gold IS REAL!!!! You TOUCH IT. You can FEEL IT. You can put it IN YOUR POCKET. It is REAL MONEY. You can use it to buy something from another individual. You DON'T NEED A THIRD PARTY. With crypto currency like Bitcoin, you need a third party. At the very least, a computer system that maintains BOTH PARTIES ACCOUNTS so you can transfer from one person to another. You can't walk up to someone and say; "Hey, I'll give you this bitcoin for that row boat." and reach into your pocket and hand them a "Bitcoin". It doesn't work that way.
Also, the way that IRS, DHS, and others are set up in the government, unless you use/spend/reimburse more than $10,000 IN CASH, the bank, vendor, etc. doesn't have to report the transaction. E.g. If you go to the bank and withdraw more than $10,000 IN CASH or DEPOSIT more than $10,000 IN CASH, the bank has to fill our a federal form. Supposedly to be able to see if you're getting this cash for illegal activities. (I don't buy this reason, but it's irrelevant. The point is, if you go to a car dealer and pay more than $10,000 IN CASH, the government knows about it. They already know it if you use a credit card or a check. But when doing CASH, they have to be manually told.
Well, if you walk into a coin shop and buy 2 ounces of gold for about $2800 or 500 ounces of silver for about $9500; and you buy it in Cash, the government doesn't know you bought it. If you use a check or credit card, the government MIGHT KNOW you bought SOMETHING from that establishment, but they might not know what. But definitely with cash, there's not trail back to you that you bought any silver and gold.
And, when the time comes to sell the silver or gold back, you can go to the same or different coin shop, and as long as you don't sell back more than what will be $10,000 IN CASH that the dealer gives you, they don't have to report that to anyone. Even if they pay you with a check, (Because the coin possibly doesn't have $9,000 in cash to give you), the check simply has your name on it. It doesn't say WHAT you got the money for. In other words, the government doesn't KNOW that you sold back / exchanged silver/gold for cash/dollars.
Even if the government was to believe that you got this cash/check for selling back silver/gold, they have NO IDEA when you bought the silver/gold in the first place. What the PURCHASE price was when you exchanged for it. What the SELL price was when you exchanged it back for cash. So...... as far as they know, you got the silver at $17 an ounce, you paid $19 an ounce because of the dealer's commission, and when you traded it back, it was $19; and thus.... you didn't make ANY PROFIT. Therefor, NO CAPITOL GAINS.
I'm not saying you should try and avoid capitol gain taxes. I'm not saying you should mislead the government. I'm simply saying that when it comes to silver and gold, and as long as you aren't trading back or forth with MORE than $10,000 in CASH, the government doesn't know and won't know what your silver and gold purchases/sell are; and IF you have any capitol gain taxes owed.
But the big emphasis in this post is in the beginning. With Crypto Currencies, it's ALL ELECTRONICS. What happens if the system crashes. What happens if there's an economic Armageddon (Like what happened in Greece) and the government controlled the ATM machines, banks, computer transfers, etc.? What happens when you don't have access to your money. You can't buy food, fuel, heat, medicine, etc. If you have Silver/Gold, it's PHYSICAL!!! You HAVE IT!!! The government can't control it. You will ALWAYS have wealth that you can use to purchase, barter, trade, etc. with. Of course, I'm not talking about ETF's and other PAPER SILVER/GOLD. That is pure trash. I'm talking about PHYSICAL.
With physical, you OWN IT, you POSSESS IT, no one/government can TAKE IT, and no one else; including the government; KNOW YOU HAVE IT.
Take Care:
CYA: SE:
THE KEY TO MAKING MONEY IN STOCKS IS NOT TO GET SCARED OUT OF THEM
ReplyDeleteGET BEST intraday Stock Tips