Bitcoin in the U.S. taxation scheme -- what is it really good for?

[Jingthing]

I'm putting this in the U.S. section because of the U.S. tax situation with bitcoin. I don't know how other countries deal with it. My understanding is that Thailand has some kind of temporary freeze on bitcoin taxation but that's a separate issue.

 

Anyway, I've been one of those admittedly "OK boomer" bitcoin is like the tulip bulb craze and it's something that has no inherent value.

 

So I have had no interest in getting into it all.

 

However, recently I have a situation where I am having trouble paying for something in the normal ways and bitcoin is an option.

 

So I thought well might as well look a bit into putting a little money into this just for "fun" and as a payment option.

 

Then I learned this. In the U.S. tax system bitcoin is NOT a currency but rather an asset and it's taxed as such.

 

So for example I buy a coffee with it that's a taxable event (with a cost basis and profit or loss).

 

Filing US taxes they ask if you have any bitcoin. Once you say yes you're in that system.

 

Even Thailand based bitcoin exchanges report to the IRS.

 

So other than only as pure speculation like buying gold or a stock, practically speaking, what is bitcoin good for?

 

I'm not really interested in speculating on it so for the time being I'm back to my luddite position on bitcoin.

[hotsun]

4 minutes ago, Jingthing said:

 

So other than only as pure speculation like buying gold or a stock, practically speaking, what is bitcoin good for?

It's digital gold at the moment. I'm holding mine until when the world accepts it as a currency. By that time one Bitcoin could be worth as much as one or several million dollars

[Jingthing]

1 minute ago, hotsun said:

It's digital gold at the moment. I'm holding mine until when the world accepts it as a currency. By that time one Bitcoin could be worth as much as one or several million dollars

That's a big if.

[hotsun]

2 minutes ago, Jingthing said:

That's a big if.

Not if but when. It has no inherent value to folks not willing to do research. If boomers spend as much time learning how to do Internet stuff then I don't see why not Bitcoin too, it's not going anywhere

[Jingthing]

Adding to the current situation for Americans which is where we are NOW, my understanding is that the entire bitcoin thing was founded to be something OUTSIDE the system. Kind of a libertarian kind of thing. But for Americans right now it is actually WORSE than the standard payment options. Like I said I was looking into it mainly as a payment option. It totally sucks for that for Americans NOW. 

[hotsun]

1 minute ago, Jingthing said:

Adding to the current situation for Americans which is where we are NOW, my understanding is that the entire bitcoin thing was founded to be something OUTSIDE the system. Kind of a libertarian kind of thing. But for Americans right now it is actually WORSE than the standard payment options. Like I said I was looking into it mainly as a payment option. It totally sucks for that for Americans NOW. 

People have to understand why it's superior to inflatable money first. Then merchants will accept it as payment

[Jingthing]

3 minutes ago, hotsun said:

People have to understand why it's superior to inflatable money first. Then merchants will accept it as payment

I wasn't referring to it being accepted.

There is something I want to pay that accepts it.

My beef is that making any and all purchases of any kind including a flippin' cup of coffee is a TAXABLE EVENT!

That is totally insane.

With the confusion about Thailand taxation for expat remittances, now more than ever, I'm looking to SIMPLIFY my tax situation, not making it more complicated.

[hotsun]

2 minutes ago, Jingthing said:

I wasn't referring to it being accepted.

There is something I want to pay that accepts it.

My beef is that making any and all purchases of any kind including a flippin' cup of coffee is a TAXABLE EVENT!

That is totally insane.

With the confusion about Thailand taxation for expat remittances, now more than ever, I'm looking to SIMPLIFY my tax situation, not making it more complicated.

It's insane but I don't know how else governments would allow Bitcoin transactions to be legal without getting their cut. El Salvador made it legal tender and not taxable, it's a shame that place isn't liveable

[Jingthing]

2 minutes ago, hotsun said:

It's insane but I don't know how else governments would allow Bitcoin transactions to be legal without getting their cut. El Salvador made it legal tender and not taxable, it's a shame that place isn't liveable

Well there is that expat beach resort bitcoin paradise that they created. Living in El Salvador doesn't interest me but if you're talking about the crime, that has been drastically reduced by their authoritarian dictator president. To me, Panama seems the most desirable expat choice in Central America, bitcoin or not.

[hotsun]

1 minute ago, Jingthing said:

Well there is that expat beach resort bitcoin paradise that they created. Living in El Salvador doesn't interest me but if you're talking about the crime, that has been drastically reduced by their authoritarian dictator president. To me, Panama seems the most desirable expat choice in Central America, bitcoin or not.

If Thailand were innovators it would attract a significant portion of westerners to live and invest here. I don't think they are forward thinking enough to capitalize on this though

[connda]

It's still considered a commodity and subject to capital gains taxes.  However, so are stocks.  My suggestion.  Buy and HODL.  Buy and hold long-term and then wait for a change in the tax laws.  At worse, you simply pay capital gains taxes when you sell.  There SHOULD be pressure to end this craziness has it makes using BTC as a currency difficulty as you have to keep track of every transaction of purchasing then using BTC to buy something.  Imagine having to calculate the capital gains (losses) for each cup of coffee you buy at, say, Starbucks.  Ludicrous, and yet its still the case.  If you're just looking for an investment?  Then it's not different than buying stocks or bonds and then paying capital gains (taking capital lossses) when you sell them.

[Jingthing]

1 minute ago, connda said:

It's still considered a commodity and subject to capital gains taxes.  However, so are stocks.  My suggestion.  Buy and HODL.  Buy and hold long-term and then wait for a change in the tax laws.  At worse, you simply pay capital gains taxes when you sell.  There SHOULD be pressure to end this craziness has it makes using BTC as a currency difficulty as you have to keep track of every transaction of purchasing then using BTC to buy something.  Imagine having to calculate the capital gains (losses) for each cup of coffee you buy at, say, Starbucks.  Ludicrous, and yet its still the case.  If you're just looking for an investment?  Then it's not different than buying stocks or bonds and then paying capital gains (taking capital lossses) when you sell them.

Yeah, that's how I see it.

For now, for Americans, it's for SPECULATION.

Just another choice for that.

[1FinickyOne]

47 minutes ago, hotsun said:

it's not going anywhere

Sure, you can't see it or touch it - - it can't move but you can lose it all if you forget your password - right? 

 

But just like money, it only has any value because some people agree it has value - same as Euros, pesos, dollars, old baseball cards and pet rocks. 

[StandardIssue]

Man, do some research. IMHO You are asking about Bitcoin way too late. People who actually keep on the edge of trends bought BTC when it was $1000 per coin..(2017) now it's close to $120k ... late to the party IMHO

 

This is the LAST place to get any kind of reliable information on anything either than Thailand Immigration rules and requirements and many times that is dubious at best.

 

Anyways as they say in the cryptocurrency culture DYOR .. do you are own research. BTC is more than likely gonna be the defacto standard of holding digital value. (digital gold) Other networks like SOL, ETH or SUI maybe the front runners for daily use like a VISA card or Mastercard.. 

[Digitalbanana]

1 hour ago, Jingthing said:

So other than only as pure speculation like buying gold or a stock, practically speaking, what is bitcoin good for?

Like you said its useful for anonymity and buying stuff (usually dodgy) which cannot be bought with traceable fiat? Its also of use for international transfer of funds outside the traditional banking systems. Most people tho just use it as a speculative asset in what is often referred to as the greater fool type of trade, when they hope some fool will pay more for it than you did in time to come.

[hotsun]

3 minutes ago, 1FinickyOne said:

Sure, you can't see it or touch it - - it can't move but you can lose it all if you forget your password - right? 

 

But just like money, it only has any value because some people agree it has value - same as Euros, pesos, dollars, old baseball cards and pet rocks. 

there are Bitcoin ETFs now

 

 

[hotsun]

8 minutes ago, StandardIssue said:

Man, do some research, why are you asking such juvenile questions here. You are asking about Bitcoin way too late. People who actually keep on the edge of trends like myself bought BTC when it was $1000 per coin..(2017) now it's close to $120k ... way late to the party bubba

 

This is the LAST place to get any kind of reliable information on anything either than Thailand Immigration rules and requirements and many times that is dubious at best.

 

Anyways as they say in the cryptocurrency culture DYOR .. do you are own research. BTC is more than likely a way to hold value. Other networks like SOL, ETH or SUI maybe the front runners for daily use like a VISA card or Mastercard.. 

I also bought it when it was $1000. Unlike you though I see thats it's not too late. It's still very early, most people don't get it. As you can see here, even people that bought it like yourself doesn't understand its value

[1FinickyOne]

21 minutes ago, Jingthing said:

Yeah, that's how I see it.

For now, for Americans, it's for SPECULATION.

Just another choice for that.

Yes, there are ETF's for BTC, Ethereal and now XRP - you can buy them on Schwab in the same way as you might buy IBM - and when you sell, there will be profit or loss to be calculated for taxes - Dallas Taxes - plenty of places to speculate - 'There is no sanity clause' 

[StandardIssue]

22 minutes ago, Jingthing said:

Yeah, that's how I see it.

For now, for Americans, it's for SPECULATION.

Just another choice for that.

 

It's not just for speculation. It is more or less the store of value standard for cryptocurrencies. It is getting less and less volatile and is only going to increase in value as cryptocurrency becomes a standard of payment rather than the old centralized banking system and FIAT money. It is freedom and decentralized. Over the years there have been a lot of nasayers on this board. All of them with their foots in their mouths right about now 

[StandardIssue]

2 minutes ago, hotsun said:

I also bought it when it was $1000. Unlike you though I see thats it's not too late. It's still very early, most people don't get it. As you can see here, even people that bought it like yourself doesn't understand its value

 

From a perspective of mass adoption it "may" not be too late to the party. But by my standards anyone asking what it's good for now is late to the party. 

 

The question is how and when will mass adoption of a few decentralized block chain networks occur. BTC is the store of value standard and that is a given. Will SOL, ETH or SUI or some other fast network become the global payment network? that is the big question. That may be a decade or more off at this point.

 

I do understand it's value and will be HODLing mine for awhile. I will only sell it when I have met a few goals.. like enough to be buying a large estate somewhere in SE asia etc..

 

I have a deep understanding of the underlying block chain technology. I ran a BTC node for a few years and was accessing the block chain via the command line. I am continuing to accumulate, my interests are SOL right now. Did pretty good with my ETH holdings as well. Looking at some RWA projects, these may be very interesting as well as some solid DeFi platforms. 

 

 

[1FinickyOne]

3 minutes ago, hotsun said:

I also bought it when it was $1000. Unlike you though I see thats it's not too late. It's still very early, most people don't get it. As you can see here, even people that bought it like yourself doesn't understand its value

That is correct - for me, it has no practical value - - however, I would have said that about a smart phone many years ago and recently a QR code which now has a very nice convenience factor for me, for a few things - so, I am open to things that can make life easier, or make money for me - they recently came out with ETF's for XRP  - and at $3+ I can see that as more likely to double than BTC - - - not for any intrinsic reasons... just as an investment and everything has the potential to boom or crash - - that's the world you live in - I live in my own bubble - I talk to the trees and shrubs in the garden. 

[hotsun]

1 minute ago, StandardIssue said:

 

From a perspective of mass adoption it "may" not be too late to the party. But by my standards anyone asking what it's good for now is late to the party. 

 

The question is how and when will mass adoption of a few decentralized block chain networks occur. BTC is the store of value standard and that is a given. Will SOL, ETH or SUI or some other fast network become the global payment network? that is the big question. That may be a decade or more off at this point.

 

I do understand it's value and will be HODLing mine for awhile. I will only sell it when I have met a few goals.. like enough to be buying a large estate somewhere in SE asia etc..

 

I have a deep understanding of the underlying block chain technology. I ran a BTC node for a few years and was accessing the block chain via the command line. I am continuing to accumulate, my interests are SOL right now. Did pretty good with my ETH holdings as well. Looking at some RWA projects, these may be very interesting as well as some solid DeFi platforms. 

 

 

I'm not a blockchain guy, it's clear that Bitcoin is the winner and is the future

[hotsun]

12 minutes ago, StandardIssue said:

large estate somewhere in SE asia

Sounds like a waste of money

[StandardIssue]

13 minutes ago, hotsun said:

I'm not a blockchain guy, it's clear that Bitcoin is the winner and is the future

 

Yea, steer clear of that block chain stuff and just invest in bitcoin

[brianwilliamswales]

36 minutes ago, 1FinickyOne said:

Sure, you can't see it or touch it - - it can't move but you can lose it all if you forget your password - right? 

 

But just like money, it only has any value because some people agree it has value - same as Euros, pesos, dollars, old baseball cards and pet rocks. 

Not so.Money has value begause its pegged to and backed up by GOLD reserves held by the country which issues the money ...which Im sure you agree has value ...unless your a  dog...then it has no value.

[StandardIssue]

3 minutes ago, brianwilliamswales said:

Not so.Money has value begause its pegged to and backed up by GOLD reserves held by the country which issues the money ...which Im sure you agree has value ...unless your a  dog...then it has no value.

Nixon phased that out in the 70's. The worlds money supply is not backed by gold any longer. It is FIAT currency backed by the country of issue.

 

Striclty speaking, money that is issued by the USA has no value other than the backing of the government and agreement of parties that is has value.

[hotsun]

18 minutes ago, StandardIssue said:

 

Yea, steer clear of that block chain stuff and just invest in bitcoin

Are you saying that ironically? Ethereum and Solana flopped. The ETH ETF is a bust

[1FinickyOne]

27 minutes ago, brianwilliamswales said:

Not so.Money has value begause its pegged to and backed up by GOLD reserves held by the country which issues the money ...which Im sure you agree has value ...unless your a  dog...then it has no value.

I don't study this but I think it has not been linked to gold or silver in many many years - I remember when coins had silver in them [silver dollars] and paper money said 'silver certificate' on top. And I don't necessarily agree that gold has particular value - the greatest value is that it is used in adornment, jewelry. I think there is some element of it having a hardness factor, but like printed money, there is a societal agreement that it holds value. [as does btw lately] 

 

• he 1944 Bretton Woods system made the US dollar the world’s reserve currency backed by gold at $35/ounce, but decades of American monetary expansion led to foreign governments redeeming dollars for undervalued gold, forcing Nixon to completely sever the dollar-gold link in 1971.
• Since 1971, gold has functioned primarily as an investment and store of value rather than currency, 

[mark5335]

2 hours ago, Jingthing said:

Anyway, I've been one of those admittedly "OK boomer" bitcoin is like the tulip bulb craze and it's something that has no inherent value.

 

So I have had no interest in getting into it all.

 

However, recently I have a situation where I am having trouble paying for something in the normal ways and bitcoin is an option.

 

So I thought well might as well look a bit into putting a little money into this just for "fun" and as a payment option.

If your are considering using crypto primarily as a payment gateway, then you should buy and use stable coins such as USDC instead of Bitcoin.

[Jingthing]

2 minutes ago, mark5335 said:

If your are considering using crypto primarily as a payment gateway, then you should buy and use stable coins such as USDC instead of Bitcoin.

I assume still classed as an asset not a currency by the IRS so I'm not really considering.