Ohio Becomes First U.S. State to Accept Bitcoin for Tax Payments | Hacker News Reader

Ohio Becomes First U.S. State to Accept Bitcoin for Tax Payments

investinblockchain.com

29 pointstwitchchat22 comments

Previously: https://news.ycombinator.com/item?id=18543815.

> On the official Ohio Treasurer’s website, they explain why they are adopting crypto payments:

> Cryptocurrencies cannot be transferred to third parties without user initiation, thereby practically eliminating fraud;

https://www.cnbc.com/2018/06/07/1-point-1b-in-cryptocurrency...

https://www.marketwatch.com/story/steve-wozniak-had-70000-in...

http://fortune.com/2018/02/14/bitcoin-cryptocurrency-blockch...

The Ohio Treasurer has a very dry sense of humor.

Fraud is not the same as theft.

They're using Bitpay, which had a malicious code disclosure yesterday which steals Bitcoin private keys.

https://cointelegraph.com/news/bitpays-copay-wallet-compromi...

>OhioCrypto.com

Wow, didn't even get a .gov, attempt to redefine "crypto" to cryotocurrency vs it's long held meaning of cryptography.

This whole thing seems rather silly and I'd like to read an article about it not from a pro-cryotocurrency site.

Forbes [1] has relatively neutral coverage. It is surprising that they didn't get a .gov for this -- it makes the whole thing look kind of phishy.

[1] https://www.forbes.com/sites/kellyphillipserb/2018/11/26/ohi...

Inb4 a phisher makes OHlOCRYPTO.ORG.

>Once registered, companies are able to use crypto to pay 23 kinds of business taxes from sales tax, utility tax, to employee withholding taxes and more. BitPay, a crypto payments service provider based out of Georgia in the United States, will process all crypto tax payments.

About the processing volume

https://support.bitpay.com/hc/en-us/articles/206003676-How-d...

They look like the anti money laundering limits, anyone know how much bitcoins they actually take with a single transaction?

And then you need to pay taxes on the bitcoin used to pay the taxes!

Well, only if you bought it a while back, in the early stages of the pyramid.

You need to have paid taxes on the USD you use to pay taxes, too. Just saying.

Not really. Paying the taxes with USD doesn't generate a taxable event. Paying with Bitcoin does.

Sure, you could say "Technically, you'd pay taxes on earning those USD...", but anything said after "technically" is irrelevant to the discussion.

Isn't this exactly a way to collect taxes in a way that doesn't require somebody to recognize gains? They can just fork over some bitcoins to Ohio.

No, it still triggers a taxable event. "In general, the sale or exchange of convertible virtual currency, or the use of convertible virtual currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability."

[1] https://www.irs.gov/irb/2014-16_IRB

i'm not so sure that pertains to actually paying your taxes, otherwise we would all be in an infinite loop of tax paying.

You're not taxed on the amount you pay, but if you made capital gains on your BTC.

You can think of it with the same way with shares. Lets say you bought Apple shares for $100 a while ago. To pay your taxes, you sell five of them at $200. You now realized capital gains(aka profit) of $500, so next year that money gets added to your taxable income.

Not sure if it works for BTC, but for shares you can deduct losses till a limit and reduce your capital income. In the above example if you had sold at $50 to pay taxes, you can deduct the $250 from taxable income as a loss next year.

but with BTC, it would be significantly different, wouldn't it? I mean, you're not selling the BTC to pay your taxes in this case, you are directly paying your taxes with BTC. I'm highly doubting there would be any capital gains tax for this situation.

"In general, the sale or exchange of convertible virtual currency, or the use of convertible virtual currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability."

It literally says that exchanging the BTC for your debt counts the same as selling it for USD and then paying your debt. You would get the exchange rate at the time of the transaction.

If I bought a coin at 1k and pay my taxes with it when its at 2k, it then triggers a liability of 1k, on the gains from buying it to using it.

so i pay my taxes with bitcoin. which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes, which get paid in bitcoin, which triggers more taxes

infinite loop.

IF bitcoin keeps going up, yes. If at any point you pay your taxes at less, it would be capital losses and you could deduct it from your other gains/losses.

IF I buy bitcoin at 5k, and pay my taxes at 5k, its not a taxable event.

What you described is the EXACT SAME THING as selling your bitcoin for USD before paying your taxes. They are just letting you skip a step and offering to do the exchange for you.

fair enough. I may still not agree with the policy, however.

what policy? that you have to pay taxes on gains?

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