Taxes On Bitcoins http://profitabletradingtips.com/profitable-trading-tips/taxes-on-bitcoins The United States Internal Revenue Service, IRS, has ruled that Bitcoins are property and not a currency. This means that there will be taxes on Bitcoins when they are sold, providing the sale is a realized capital gain. Prior to the new era of taxes on Bitcoins, one could purchase Bitcoins with dollars, receive Bitcoins from a patron at your restaurant, or trade bitcoins on a Bitcoin exchange. This option was recently in the news as Mt. Gox, the Bitcoin exchange located in Tokyo, went belly up and declared bankruptcy a few weeks ago. The issue for the IRS is that some folks managed to buy Bitcoins for a few cents and eventually get rid of them for a thousand dollar each and not pay any taxes. The IRS figures that Bitcoins should be treated like any other investment or traded asset. If a trader buys IBM stock when it is low and sells IBM stock when it is high the trader pays capital gains. The tax may by on short term gains if the stock was held for a year or long term gains if the stock was held for more than a year. Now there will be taxes on Bitcoins following similar rules, when they are sold. Trading Bitcoins One of the attractive aspects of Bitcoins was that one could, theoretically, buy, sell and make a profit under the radar. After all, one was simply buying and selling a currency. However, when you convert one currency into another and then back as a currency trader you are liable for taxes on the gains that you have made and are able to write off losses against other income. Taxes on Bitcoins will likely follow similar rules. Technical analysis can lead to profits in trading and that could include Bitcoins. There are some who say that the IRS ruling just means that Bitcoins have grown up and entered the adult investing and trading world. The opposing view is thatthe world of Bitcoins is unregulated and simply amounts to a big Ponzi scheme and a story that is simply too good to be true. However, traders can make money in good and bad markets. Many who saw the dot com bubble coming or accurately anticipated the 2008 crash made money by purchasing puts on stocks or shorting stocks. There are lots of profitable day trading strategies that could be applied to trading Bitcoins in a transparent market. The trick is not to fall for the free lunch concepts that Bitcoins will go up in value forever or that there are not taxes on Bitcoins in the end.

1. Taxes on Bitcoins

2. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
The United States Internal Revenue
Service, IRS, has ruled that Bitcoins are
property and not a currency.

3. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
This means that there will be taxes on
Bitcoins when they are sold, providing the
sale is a realized capital gain.

4. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Prior to the new era of taxes on Bitcoins,
one could purchase Bitcoins with dollars,
receive Bitcoins from a patron at your
restaurant, or trade bitcoins on a Bitcoin
exchange.

5. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
This option was recently in the news as Mt.
Gox, the Bitcoin exchange located in
Tokyo, went belly up and declared
bankruptcy a few weeks ago.

6. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
The issue for the IRS is that some folks
managed to buy Bitcoins for a few cents
and eventually get rid of them for a
thousand dollar each and not pay any
taxes.

7. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
The IRS figures that Bitcoins should be
treated like any other investment or traded
asset.

8. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
If a trader buys IBM stock when it is low and
sells IBM stock when it is high the trader
pays capital gains.

9. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
The tax may by on short term gains if the
stock was held for a year or long term
gains if the stock was held for more than a
year.

10. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Now there will be taxes on Bitcoins following
similar rules, when they are sold.

11. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Trading Bitcoins

12. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
One of the attractive aspects of Bitcoins was
that one could, theoretically, buy, sell and
make a profit under the radar.

13. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
After all, one was simply buying and selling
a currency.

14. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
However, when you convert one currency
into another and then back as a currency
trader you are liable for taxes on the gains
that you have made and are able to write
off losses against other income.

15. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Taxes on Bitcoins will likely follow similar
rules.

16. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Technical analysis can lead to profits in
trading and that could include Bitcoins.

17. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
There are some who say that the IRS ruling
just means that Bitcoins have grown up
and entered the adult investing and trading
world.

18. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
The opposing view is thatthe world of
Bitcoins is unregulated and simply
amounts to a big Ponzi scheme and a
story that is simply too good to be true.

19. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
However, traders can make money in good
and bad markets.

20. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Many who saw the dot com bubble coming
or accurately anticipated the 2008 crash
made money by purchasing puts on stocks
or shorting stocks.

21. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
There are lots of profitable day trading
strategies that could be applied to trading
Bitcoins in a transparent market.

22. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
The trick is not to fall for the free lunch
concepts that Bitcoins will go up in value
forever or that there are not taxes on
Bitcoins in the end.

23. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Bitcoins in Trade

24. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
One of the ideas behind Bitcoins was that
one could use them to buy things just like
with other currencies.

25. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
To the extent that Bitcoins could be used as
an international currency this was an
attractive idea.

26. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
However, now the IRS says that Bitcoins are
property.

27. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
This means that each time you pay for
something with Bitcoins you need to
calculate what your Bitcoins were worth in
US dollars when you got them.

28. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Then you need to calculate what your
Bitcoins were worth in US dollars when
you used them for a purchase.

29. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
The difference will be your capital gain on
your Bitcoin property.

30. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
Obviously you will need to check with the
IRS on the particulars.

31. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
But our point is that the taxability of Bitcoins
complicates their use in commercial
transactions even while it may legitimize
their tradability as property.

32. http://profitabletradingtips.com/profitable-trading-
tips/taxes-on-bitcoins
The idea of a contrarian approach to day
trading certainly applies to using or trading
Bitcoins for the foreseeable future.