Quote:
Originally Posted by L-Pink
Unless you are a US citizen that doesn't want to commit tax fraud ?.
To be IRS compliant with a bitcoin transaction you would have to state the value of the bitcoin when acquired, the value when sold, pay tax on the appreciation.
In a bitcoin transaction almost every transaction will be for a different amount value wise than the bitcoin was acquired for. This variance on a first in/first out value basis will need to be accounted for to be IRS compliant.
For a US citizen to comply with bookkeeping requirements on a small transaction would be a major waste of time.
I'm not saying bitcoins are a bad investment, some have made a killing, I'm saying using them for minor everyday transactions isn't the same as spending a dollar bill.
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I'm not talking about using it for investments or tax fraud. Only as a means of collecting micro-payments. I would think that simply using a monthly accounting period would be enough. At the end of the month you total the amount collected in BTC and convert it to a USD amount and then pay taxes normally on it just as if you would if it were normal USD. I'm not an accountant but this seems to be reasonable to me.