Interesting talk about taxes on btc debit card.

[Pinoy-T-X]

A few days ago while hanging out with a friend, we had a conversation about a friends relative of his - that was being audited for taxes.

I’m not sure what debit card it was, maybe bitpay. But according to the tax audit he didn’t declare gains he had on BTC, he was using the card for withdrawals from sports betting.
since he gave his SSN , they found out about the debit card attached to whatever bank it was. I guess it was the KYC policy of the bank.

Here’s my question. I understand that you have to declare btc gains for tax purposes, but how can you declare the gain if you are just making a withdrawal from the book to what ever wallet to the debit card.

Maybe you had a few cents gains, or like like most of us, lost some cents during the transfer.

On what I’ve understood he was using it as a transfer, so how does he have to declare gains?

To make a long story short , he hired a tax lawyer and it’s still up in th air.

you guys heard stories like this?

[mrpapageorgio]

The main question the IRS would be asking is "Where did you get the bitcoin from?" If he was using it purely as a means of exchange, then he would have to declare how he got the Bitcoin. (I.e. Payment for gambling winnings). So say he deposited $100 and withdrew $1000, he would have to declare $900 in profit as gambling winnings. If he held onto the bitcoin, then if it appreciated in value, he would also declare the amount above $1k as capital gains, or if it depreciated, could declare losses.

[Pinoy-T-X]

The main question the IRS would be asking is "Where did you get the bitcoin from?" If he was using it purely as a means of exchange, then he would have to declare how he got the Bitcoin. (I.e. Payment for gambling winnings). So say he deposited $100 and withdrew $1000, he would have to declare $900 in profit as gambling winnings. If he held onto the bitcoin, then if it appreciated in value, he would also declare the amount above $1k as capital gains, or if it depreciated, could declare losses.

I agree. This shit can get really complicated.unless you have proof all your losses, you could be paying taxes more than once. Lol

[Optional]

Hopefully US govt drops the personal tax on gambling eventually.

It's such a messy thing to be doing even without bitcoin. Considering the licensing is supposed to be set up so players lose overall anyway. Not to mention the ethics of double taxation of the money being used to bet to start with. This is why almost no countries do it.

[Pinoy-T-X]

Hopefully US govt drops the personal tax on gambling eventually.

It's such a messy thing to be doing even without bitcoin. Considering the licensing is supposed to be set up so players lose overall anyway. Not to mention the ethics of double taxation of the money being used to bet to start with. This is why almost no countries do it.

Fat chance on that , that is why the states are approving sports gambling because they want a piece of the pie. Greedy mofos, i’m telling ya.

it’s like when you play slot machines in the casinos and hit over $1200, the money doesn’t come out, a person attends your blinking slot machine that just won, gets your ID and info, makes you sign paperwork then give you the $1200, meanwhile when tax season comes , this info was already submitted to the government and then you file your winnings, they basically take out around 30% give or take.

[littlekona]

It’s a pre paid card bottom line...many peeps dump there whole paycheck on pre paid cards esp people with no bank account....unless your pumping mega bucks through them not sure how irs can double tax since there are so many logical ways to explain....with so many ways to change btc to $$ or other spendable it’s just wise to use multiple vehicles just to be safe I guess

[Pinoy-T-X]

It’s a pre paid card bottom line...many peeps dump there whole paycheck on pre paid cards esp people with no bank account....unless your pumping mega bucks through them not sure how irs can double tax since there are so many logical ways to explain....with so many ways to change btc to $$ or other spendable it’s just wise to use multiple vehicles just to be safe I guess

You have a valid point, brah.

[TheMoneyShot]

Not worried about it. You know how many people load their bitches prepaid with dough on it? There were dozens and dozens of prepaid before this Bitcoin epidemic. Never heard of anyone with an IRS issue because of "extra" money on the side. Let's face it... have you ever ran a CASH BUSINESS? Hundreds of people load deb crds with practically unaccounted for $ on it. I don't see anyone doing anything about it. Not one news story.


The day you hear Bitpay being subpoenaed.... run to Canada.

[dlknfdslknfdlskn]

Do you know if he ever got this resolved, and what the outcome was?

[habitualwinning]

Do you know if he ever got this resolved, and what the outcome was?

Ya I'm curious what the result of this was too. I've honestly never heard of anyone having any tax issues with prepaid cards before. The funds on them are so random that I would think it's so convoluted that nothing can even be proven. I mean you can load these cards in so many ways. Even with the bitcoin cards like bitpay you can still get dir dep to it, load cash at convenience stores etc. Idk how they would even know it was btc versus those other methods I just stated. All they know for certain is the amount of money you spent on the card via the transaction history.

It's interesting to note that I've been seeing some fugazi going on with these prepaid cards and the economic impact payments aka the $1200 Trump checks. Apparently some people were having their checks loaded onto these prepaid style cards and then having the payments reversed or having banks and creditors seize the funds for old debts they owed. I didn't even know something like that was possible. Who knows maybe they're starting to clamp down on these cards or maybe some people that use them exclusively instead of regular banks are stupid with them, idk.