LOOPHOLE for the New 2018 Tax Law that Taxes All Cryptocurrencies in US

in bitcoin •  8 months ago

Trump's new tax law makes all crypto currency trades a taxable event. You'll be expected to pay a capital gains tax every time you trade one currency for another. Up until now, capital gains tax was only due when you CASHED IN your crypto for dollars or another fiat currency. But now EVERY crypto trade will be subject to a capital gains tax.

Of course they calculate that tax on the appreciation of that cryptocurrency in US dollars. So if you for example bought one litecoin for $200 and a bit later used that 1 LTC to buy 0.01 bitcoin, and the price of that 1 LTC is now $250, then you'll owe capital gains tax on that $50.


 From the Fortune.com article:

Digital currency owners are currently obliged to pay taxes when they exchange it for dollars or physical goods, but the new rule now effectively means all crypto transactions are a taxable event.  
The tax act in Sec. 13303
amends IRC Section 1031 (a)(1) to delete “property” and replace it with “real property” … So, you can see that now I can no longer take the position that my Bitcoin to Litecoin exchange was a like kind one under Sec. 1031, and I have to recognize the gain when I do it. 

http://fortune.com/2017/12/21/bitcoin-tax/ 

Yep, it applies to US citizens and residents. But what most people don't realize is that US citizenship is CORPORATE (by contract) and can be easily quit, and that residency means having an address with a ZIP code, which can be easily quit also.


And that's because United States means United States government, which ONLY has jurisdiction over District of Columbia and territories, which includes all ZIP code areas. And that EXCLUDES LAND of the states of the Union.

Remember, the IRS will NEVER send you mail to California (=state of the Union), but ONLY to a FEDERAL STATE "CA" which is located in a FEDERAL ZONE (is in a ZIP code).

Or that the IRS and BATF, i.e. the agencies that enforce federal tax and gun laws, were created by the US Secretary of the TREASURY, so they ONLY apply to those who voluntarily use the PRODUCT of that Treasury, which si FIAT MONEY, i.e. the Federal Reserve Notes, which are the INTERNAL (NOT national) currency of the US gov't.

And OBVIOUSLY, if you use BITCOIN instead of that US internal currency, you CAN'T be subject to the RULES (Codes) that apply to the USERS of that PRIVATE SCRIP. Remember, United States gov't is a FOREIGN CORPORATION with respect to a State. THAT'S a LAW.

And if US gov't is a foreign corporation with respect to say, California, then the "laws" that govern its INTERNAL currency, DO NOT apply to you if your "income" is in BITCOIN (or gold) and you live in California, and NOT in "CA".

In other words, the EMPEROR HAS NO CLOTHES (authority), unless you willingly give it to him/it.

In other words, if you develop an "income" in bitcoin or other crypto, or if you got enough crypto to stop working, you can QUIT corporate US citizenship and stop using ZIP codes, and be FREE of income taxation as well as of being subject to most Statutes and Codes in US. And that's because you WON'T be in US (CA, FL, NY, TX, etc.) but in California or Florida, etc. where federal law DOESN'T APPLY, unless you engage in interstate commerce.

*************

BTW, it's the law that if you become a NON-RESIDENT alien (such as a State Citizen or Inhabitant), the IRS will change status of your SSN to an ITIN. I.e. no longer a federal subject who's eligible for gov't benefits, but for which he has to pay in the form of income tax.

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

This would be a lot more palatable if their were links to sources to verify the information.

·

It's real simple but first you gotta learn English. For example "CA" in an address DOES NOT mean California. Why are you PRESUMING that it does? It's a POSTAL ZONE. The official abbreviation of California is Calif. So when gov't agencies send you a letter to "CA", they're NOT sending it to California but to some FEDERAL ZONE.

On top of that ZIP codes are NOT required for first class and priority mail so why are gov't agencies requiring it when they want your address? OBVIOUSLY to establish that you're in a FEDERAL ZONE where they have jurisdiction, and NOT in a state of the Union where they DO NOT have jurisdiction.

Just try to get some gov't benefit by insisting that your address has no ZIP code. IT CAN'T BE DONE! Why? Because they have no jurisdiction outside of ZIP codes!

·

Thanks for your post!
Please Follow, Upvote & Resteem my post to help us to travel & explore more
https://steemit.com/travel/@jonbee/travel-with-us-ep-01-kushtia-sugar-mills-kushtia-bangladesh-bd-steemian

well, that pretty much sums up the beauty of crypto currencies

·

I really hope cryptos can kill fiat for good! Tired of governments printing trillions out of thing air and we have to pay the bill (aka inflation).

I'm not an American (though my heart lives there) but really hope people like yourself go all anarchist on your governments ass and set a great precedence for the rest of the free world!
Peace and Prosperity and much success on your endeavors!

Even if the information in your piece above is correct, you still face the obstacle of dealing with the California Franchise Tax Board (FTB), which is the most dangerous tax agency in the United States.

If you are correct that you do not have to pay Federal income tax on your cryptocurrency profits, then you still are going to have to pay CA state income tax on those profits.

Also, you cannot easily quit your US Citizenship. In fact, you have to get permission from the US government in order to renounce your citizenship.

One of the top items, on the list of things required to renounce, is that you have paid all Federal income tax due. Your tax compliance will be scrutinized before you can renounce. You will be given an opportunity to make what the IRS calls your frivolous tax arguments at this point.

This provided you still have your US passport, as 2018 is the year the IRS really begins taking passports because of unpaid taxes.

·

See, you're mostly wrong. Cali Franchise Tax board ONLY taxes TAXPAYERS. And taxpayers are defined by the IRS as US citizens and residents. Therefore Non-resident aliens are NOT TAXPAYERS. Furthermore, the Cali FTB gets the taxpayer info from the IRS. So if you're not a US taxpayer on federal level, you aren't one on the State level.
On top of that ALL gov't agencies operate within the FEDERAL ZONE. And that requires having an address with a ZIP code. And they didn't make that ZIP code up; YOU GAVE IT TO THEM, since they would NOT deal with you if you told them that you have an address without ZIP code.
Addresses without ZIP codes are FOREIGN to their federal zone! If you don't believe it, just try to get a driver license by insisting that you DON'T live in a ZIP code. IT CAN"T BE DONE!

See, the current governments ALL operate in the FEDERAL ZONE and that REQUIRES having a ZIP code address. No ZIP code address = no gov't jurisdiction. Etc. etc.

·

And regarding US citizenship, that IS EASY to quit. You see you're a 14th Amendment FEDERAL US citizen via your Birth Certificate. No BC= no US citizenship. And the BC is EASY to kill. What it does is to create an IRREVOCABLE TRUST. So if you want to revoke it, then it's not easy as you mentioned. BUT it is FRAUD.

It presumes that you were born under the jurisdiction of the federal gov't. But that is a LIE. Federal gov't ONLY has territorial jurisdiction over District of Columbia and territories. So you can KILL the Birth Certificate simply by asserting that you were born in a state of the Union, such as California.

BOOM, the BC is DEAD, all you have to claim is a MISTAKE or FRAUD. And No BC = no US citizenship.

Like I said, the Emperor has no clothes (authority). Today's Democracy is CORPORATE and the BC is the contract that got you into it. Kill that and there's no contract, and without that the corporate STATE has no authority over you.

·

And thirdly, if you have to prove that you paid all income tax due before renouncing US citizenship, what do you think will happen when you assert that you NEVER WERE a US citizen, due to a mistake?

Then the IRS should RETURN all the tax you paid, for at least the last 7 years. Don't you think?

·
·

I myself have studied all the points you are making. You are correct in some of what you state. the real problem is in the fight itself, should the govt choose to prosecute. You have to be armed with MUCH knowledge in Constitutional law, and it is difficult to represent yourself in these situations and you ma=y have to spend some time in jail while you await trial to prove your case, should the govt consider you a flight risk. There are real examples of those who fought not needing to drive with a license as such an instrument is only required by commercial vehicles and its owners.., as driving the highways and byways of the United states is a RIGHT and not a privilege of its citizens. I'm interested in learning more. Social Security is voluntary as is income tax... but fighting these things in court is not easy when you make a mistake that State and Federal govt does not like.

·
·
·

Most if not all the people you speak of were US citizens. And ALL US citizens are IN COMMERCE, as their Birth Certificate was registered with the US dept. of Commerce. What I'm saying is that AFTER you got crypto income, you can JUNK the BC and with it the US citizenship. Then you just demand to see a contract, and since they can't produce one, there will be no case and no trial.

Like I said, the current gov't is CORPORATE, since it went bankrupt in 1933. So they no longer can claim any sovereignty. Even Trump couldn't claim executive privilege when a court shut down his executive order recently.

Thanks for the info. So are you a Non-resident now, who is exempt from paying taxes. Have you accomplished everything necessary to align yourself with the position you state of in your post? If so, some resources to do this step-by-step would be greatly appreciated for all of us.

This strategy seems incredibly risky. It might sting, but paying your taxes now will save a huge headache later on if you are audited. Speak to an accountant. It will help mitigate your risks and chances of audit... they could even save you money.

·

Returning to the Republic and reclaiming your status as One of the sovereign people is the New Frontier. And just like populating the West 200 years ago, it ain't for the faint of heart. You gotta be armed, just this time with knowledge, not weapons, to be able withstand attacks of the savages.

Thank's for the post, the article and comment's have been a very interesting read, I'm not American but you have shown a very out of the box look at your local law's, kind of(but very different) a "Sovereign vs UN Law" type scenario.

What facts do you have that the income tax laws apply to anyone?

Again, say you are correct. If my client owes $60,000 to the IRS because the IRS believes he is a US citizen, and his passport is seized at TSA, what are the steps I have to take to get his passport back?

·

The IRS doesn't believe that he's a US citizen, it KNOWS. If you got a Birth Certificate then you ARE a US citizen. And a simple way of dealing with the income tax liability is promoted by this company. They help people for a few $hundred and claim to be successful. Of course my way is different, it's via a 12USC411 demand for lawful money.

http://www.weissparis.com/

Good luck with that. I'm sure the Federal Government will just throw their hands up and say "you got me!, good one. I guess you're free to do whatever."

·

Yes it will. FYI my bank account is exempt from levy. IRS had a $150k lien against me and couldn't touch it. I also pay no income tax. IRS knows it and they don't mess with me. Haven't heard from them in years. Knowledge is power.

·

Upvote for best comment!

Hope your right. But I've heard people say this about income tax, they ended up in jail.

Up until now, capital gains tax was only due when you CASHED IN your crypto for dollars or another fiat currency. But now EVERY crypto trade will be subject to a capital gains tax.

Every CPA I talked to said that all crypto trades has always been a taxable event. The tax bill clarified that like-kind does not apply to crypto which does NOT mean that it applied in the past! Nothing has changed except they made the words more easy to think about.

·

That is close. Not every trade is a taxable event. Investopedia defines taxable event as:

"A taxable event is any event or occurrence that results in a tax liability."

Since some crypto trades result in a loss, or a break even, they are NOT taxable events. I like to say that every crypto trade results in a bookkeeping event, but not every trade results in a taxable event.

The tax profession is sloppy when its practitioners incorrectly state that all crypto trades are taxable events.

As of today, I would not bet that the like-kind exchanges for crypto will hold up pre-2018, but the jury is still out on that case.

At this point why not just separate yourself form the straw man corporation that is your social security number and your name in the registry of the government. You will be separate from all laws and be under maritime law since you would no longer have that contract between you and the government.

·

Now you are under Statutory law, i.e. in commerce. When you cancel all contracts with the corporate STATE, you'll be under Common/Public law of the Republic. That is, all the pre-1933 laws. And under those the income tax is unconstitutional, as it is an EXCISE tax.

Thanks for your post!
Please Follow, Upvote & Resteem my post to help us to travel & explore more
https://steemit.com/travel/@jonbee/travel-with-us-ep-01-kushtia-sugar-mills-kushtia-bangladesh-bd-steemian

Beware following this advice without first educating yourself on the implications of this. There are many loopholes in this argument which can be used to put you in federal prison for "tax evasion."

I agree with it in sentiment, but I know that the powers that be don't like people sliding through the cracks without them extorting their hard earned gains...I mean without paying their fair share of taxes...

I am not surprised this will happen in the near future just as I expected it. It was really like going smoothly doing bitcoins and crypto-trading over a year ago without these tax implementation on every profits that you make on trading. Crypto has been spread virally and some government agencies are trying to hold people from delving into this kind of wealth distributed equally to all of us by banning crypto trading in China and making capital gains taxable in the US. All we need to do is balance our activities from doing traditional business and online earnings very well so that If one time we wake up and there would be a resolution to ban all cryptos all over the world then we will all be prepared for the outcome.