What are bitcoins and how do they avoid taxes?

Bitcoins

There has been a lot of press surrounding bitcoins lately. They are viewed as a fun way to invest and play a virtual market with high potential gains. There is risk involved as with any investment, but there’s a huge advantage of trading bitcoins that few realize.

Taxes? What taxes?

This graphic by the money-knowing folks over at Intuit breaks down the loophole and shows the advantages and disadvantages of the digital currency world. When you have money without borders, what could go wrong?

Answer: a lot. Is it worth the risks?

Bitcoins
Written by Connor Livingston

+Connor Livingston is a tech blogger who will be launching his own site soon, Lythyum. He lives in Oceanside, California, and has never surfed in his life. Find him on Twitter, Facebook, and Pinterest.
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3 Comments »

 
#1
Silas Barta
July 21st, 2011 at 1:38 am

Why is there a TurboTax add on your little graphic?  Is someone forgetting to disclose something?

 
 
#2
Commenter
July 21st, 2011 at 12:08 pm

There is a Turbo Tax icon in the sources section, what more could you want?
 

 
 
#3
Audit the Fed
September 15th, 2011 at 3:25 pm

USD transaction?  Like sales tax automatically added to my purchase, income tax automatically taken out of my pay, and interest or capital gains reported to the IRS every year?  I think what you mean is that BitCoins are covered under tax law as bartering or tips and thus up to the individual to declare (under penalty of law, if they catch you).  But, certainly, there is a BIG difference.  Unless of course you really believe that people voluntarily do pay sales tax on things they sell at a garage sale, buy on Ebay or Amazon, or declare all their tips.

 

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