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Comment by DiabloD3 | Hacker News Reader

Small problem, he says "They cannot be taxed, which would remove yet another source of power the state has over individuals."

I hate to inform everyone, but Bitcoins CAN be taxed. Anything that is normally taxable in USD transactions are also taxable as a BTC transaction.

Remember people, pay your damned taxes.

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"They cannot be taxed"

The only possible explanation for such a bizarre statement that I can think of is that the author has never had any experience of paying taxes (in any form).

Moreover, they'll be taxed in the United States based on USD value. So if you are a bitcoin-millionaire in December, you had better hope that the market hasn't imploded when you do your taxes in March.

Why does everyone miss the point that once you cash out your BTC you're paying USD taxes.

The idea is that you never need to 'cash them out', because it is meant to be used as a currency not as a casino game. If you do your transactions in them you don't need to go back to dollars.

Nope, not at all. Ask a certified accounted. This is no different than US companies doing business in foreign currencies... you keep your books in USD equivalent values indexed to an exchange rate that is regularly updated.

As in, daily, weekly, quarterly. Gaming that also raises eyebrows at the IRS.

Yeah I believe you. I don't live in the US so I know nothing about your tax system. I just wanted to make clear that the goal is to get a worldwide (micro-)economy running in BTC, not to bubble and 'cash out' to other currencies. Though it looks that way at the moment...

Because they are dreamily thinking that they will spend BTC directly, and never convert to USD.

No conversion to dollar necessary. An American citizen say lives on the US Canada border and has a job just across the line and gets paid in Canadian dollars they are still expected to pay income tax. If an American citizen lives and works in France for a decade they are expected to file income taxes in the US every year. Income tax is just that, tax on income it applies to every citizen of the US no matter where they live or what currency they get paid in. BTC is no different.

I am no expert on american taxes (eh, IANEOAT?) but I believe there is a treaty between France and USA preventing double taxation. You might or might not be forced to file the papers but if you're already paying taxes from the income in France (as would be the case - since the employer would just deduct it) you wouldn't have to pay the US taxes.

Sorry for the OT

LOL ok, good luck trying to pay your bills in Bitcoin haha.

Even if they never convert it to USD, taxes has to be paid on all revenues, regardless of currency.

The fact the transactions can be pretty anonymous makes them think they will be able to hide them.

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