You are viewing a single comment's thread from:
RE: IRS has been tracking Bitcoin usage since 2015 & List of Coins that Can Save You from Spies.
Anonymous coins are all well and good (I hold some myself) but until they are accepted by a merchant for goods or services, you are still going to have to cash out via btc on an exchange and this is where the tax man will catch you.
My understanding is (certainly in the UK) that no tax is owed until you convert your coins into fiat. Not too sure about mining, which may be treated as income.
Unfortunately that's wrong. If you are paid in crypto for anything (UK), then you would owe income tax on the GBP face value of that transaction. If you're doing a lot of crypto sales, you may even be required to add VAT to the sales.
There was an attempt to add VAT to bitcoin a few years ago but this was abandoned.
My reading is that if you earn bitcoin in any way (mining, blogging, other tasks that involve payment for your time or services) you are liable for income tax. Difficult as the value of crypto fluctuates so much.
If you buy and then sell btc and make a profit, you are liable for capital gains tax on the profit (with allowances etc).
I think this is the latest guidance:
https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies
He is correct from the perspective of an investor. They cannot get you for capital gains until you cash out into Fiat or otherwise use the banking system such as a debit card.