I have been considering for a long time that microtransactions over LN will create a totally new kind of successful apps or web apps, but just recently consider the fact that "spending btc is a taxable event" in many countries, including the US.
What do people think about it?
A) This shows clearly the benefits of having a non-KYC stack B) It's only a taxable event if you declare it 😉
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Ha.. agree, yet, if you want to have mass adoption, this is not the fix. I would love to live in a world where "social media" is a Value4Value economy instead of an attention economy.
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Ok course it is the fix. Mass adoption will happen precisely when people will understand that Bitcoin can allow them to not paye taxe, or less at least.
Do not care about what sleepy Joe wants, you don't owe him anything, he can't trace millions of micro tx, so enjoy and stop asking for permission particularly when you don't need to
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don't tempt them. they have all our money and love wasting it on frivolous shit. poke the bear too much, and they may retaliate.
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Grow a pair
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B) It's only a taxable event if you declare it 😉
Or if they find out. Or if they suspect hard enough, and demand that you prove it to them, in the boiled-frog manner the IRS has turned into an art form.
Which gives even more force to your first point.
A) This shows clearly the benefits of having a non-KYC stack
Truth.
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100 sats \ 1 reply \ @Krv 7 Feb
Most people would evade taxes if they knew they could get away with it. Even those who nag you about your responsibility to pay.
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I bet, especially those people. :)
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Most laws are written for the mean (average) and edge cases are decided in court.
The vast majority of "BTC spending" is people buying dollars. So the vast majority would be a taxable event anyways due to capital gains. When the majority of BTC spending is for goods and services, maybe this will pressure the regulators to amend their rules.
In the 1990's back when strong cryptography was considered munitions, there were websites that would allow you to "export arms to foreign adversaries" at the click of a button. Then, once regulators realized that clicking a button on a website, which sent an email with PGP source code to a server in Iran was turning thousands of american's into felons, they amend the law.
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534 sats \ 1 reply \ @freetx 7 Feb
There are proposals in congress for a "de minimis" exemption clause to be added to IRS for Crypto:
This is similar to what happens with Forex or if you receive and inbound shipment from foreign country. For example, if you went on a trip to Mexico and bought $1000 of pesos and then when you came back traded the extra back in....without a "de minimis" exemption you would be liable for cap gains....however you are given a $200 per day exemption in this case....
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@koob do you guys donate to legal funds trying to get a de minimis passed?
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Is there really guys among you that declare every beer they buy, every Bitrefill cards they buy, every sell on BISQ they do ?
If yes, Bitcoin is NGMI
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I perfectly get this, but I just don't see something replacing FB, IG or Twitter if it has "taxable event" issues for every engagement.
My point is more about the mass users, who might actually won't even know they are using btc.
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You are just factually correct that it's a big deterrent. Way back roughly 10 years ago Bitcoin payments starting taking off but then crashed. Tax treatment was one of the big reasons. Remember when Stripe originally added bitcoin payments and it seemed like Bitpay was the next big thing? Well tax treatment was one big reasons (definitely not the only one, but a big one for sure) that largely disappeared.
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165 sats \ 7 replies \ @k00b 7 Feb
@supertestnet argues that because bitcoin is legal tender in El Salvador, bitcoin is subject to foreign currency spending laws (which isn't taxable below a certain transaction size iirc).
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Based. I need to know more about this
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@supertestnet please grace us with your reasoning, so that I may parrot it when they kick down my front door
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Section 988 of the IRS Internal Revenue Code is in general titled "Treatment of certain foreign currency transactions." The general principle of that section is that "any foreign currency gain or loss...shall be...treated as ordinary income or loss." However, it outlines a bunch of exceptions, one of which is sometimes called the “de minimis” exemption:
If— (A) nonfunctional currency is disposed of by an individual in any transaction, and (B) such transaction is a personal transaction, no gain shall be recognized for purposes of this subtitle by reason of changes in exchange rates after such currency was acquired by such individual and before such disposition. The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200. source
There’s a lot of legalese there so let’s unpack it, starting with “nonfunctional currency.” This document helpfully defines what the tax code means by functional currency: “Generally, [taxpayers] must make all determinations…relating to income taxes…in [their] respective functional currency. … The dollar shall be the functional currency of [most] taxpayer[s]...regardless of the currency used in keeping [their] books and records.” Basically, your country’s “functional currency” is the one in common use, and any other currencies are “non-functional” currencies.
For a long time, bitcoin didn't fit the first part of this exemption because anyone who tried to say bitcoin is a nonfunctional “currency” would get tripped up on the currency part. A judge, for example, would ask what country accepts it for payment of all debts, public and private. The bitcoiner would have no answer, and the judge could then just say, “Nice try, but bitcoin is clearly not a currency.” But now, bitcoin is legal tender in el salvador (including for government bills), so we can say it is currency there. That means bitcoin now fits the first condition in this exemption: it is a nonfunctional currency disposed of by some individuals in some transactions.
The second part says the exemption only applies to personal transactions. A personal transaction is defined as “any transaction entered into by an individual” (as opposed to a business) and not including a self-employed person’s business expenses (or what would be business expenses if that person’s business was incorporated -- for more info see the full definition here).
Given these definitions and conditions, the exemption applies to bitcoin in this way:
If a person (“an individual”) spends his bitcoins (“nonfunctional currency”) for everyday reasons (“personal transactions”), then it can’t be taxed (“no gain shall be recognized”) just because it appreciated in value (“by reason of changes in exchange rates”) after he acquired it (“after such currency was acquired...and before such disposition”) unless the value of the appreciation exceeds $200 (“[That] does not apply if the gain...exceeds $200”).
Since bitcoin is a foreign currency now, taxpayers can legitimately not disclose their bitcoin expenditures to the IRS as long as the gains on each transaction are below $200. That is beneficial for privacy and an incredible boon to the usefulness of bitcoin. Note well: no other cryptocurrency gets this exemption because no other cryptocurrency is a foreign country's legal tender.
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110 sats \ 0 replies \ @anon 13 Feb
Beautiful. Thank you @supertestnet, and thank you Nayib Bukele for making Bitcoin legal tender in El Salvadore.
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Fantastic reasoning. Well done!
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Beautiful :)
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This is beautiful (if it actually works)
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I ain't declaring nuthin'!
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52 sats \ 0 replies \ @Neo 7 Feb
Sent you some sats, don't forget to declare that...
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42 sats \ 1 reply \ @anon 8 Feb
Just use Strike or other equivalents. Get best of both worlds.
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For the compromisers, this is the best option IMO. If you're gonna buy in a KYC fashion, may as well get your tax documents from the same company for simplicity
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Sweet monkeys there are some statist replies in this thread. You guys should rather become eth maximalists and embrace your CBDCs
Anyway thanks for bringing this to the foreground. When the rubber hits the road people must decide whether they want shiny pet rocks or to fix the world even if that comes with risk.
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I’m sorry to humble brag that Singapore doesn’t have capital gains taxes. So I can benefit from SN while the good times last haha
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42 sats \ 3 replies \ @ek 7 Feb
At least in Germany, below 600€ (in profit?) per year you don't have to declare anything.
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Germany: If you have bought and resold an asset (crypto or stuff on ebay) within 12 months, this sale will result in other income. However, this is only taxable if you have made a total profit of at least 600 euros on all the sales you have made in a year. This amount is an exemption limit. If this threshold is reached, your entire profit must be taxed, not just the part that exceeds 600 euros. But: If you hodl BTC for at least 1 year and then sell, all you capital gains a tax free. And that's about it and the only positive aspect in Germany.
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Per asset, or total?
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0 sats \ 0 replies \ @ek 7 Feb
I think total
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This is objectively false. For just a tiny taste of how many times non-kyc bitcoin has been doxxed: https://www.investopedia.com/news/nsa-worked-track-down-bitcoin-users-snowden-papers-reveal/ https://decrypt.co/66411/cia-bitcoin-surveillance If you've ever forgotten to use VPN/Tor even once your bitcoin/nostr can probably be doxed by FBI/NSA. Every website and server is constantly hoovering up device info, IP, operating system, cross system tracking cookies, etc. Realistically you will probably never be a big enough target for this to be an issue. But realize if you have a big enough stack and avoid enough taxes, or especially in a highly adversarial environment where the government 6102's everything, you can be found out.
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I think the money laundering angle is what they will use to shutdown sites like this.
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Bitcoin doesnt ask permission. As a user IDGAF what the gov say about bitcoin taxes. I buy, spend and sell(p2p) when I want. As a public business probably there are other implications, maybe don't sell or convert it immediately to fiat, don't know.
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Let me start by saying taxation is theft. More specifically, it's extortion.
extortion :- the practice of obtaining something, especially money, through force or threats.
I know this makes some people angry but just let the thought sink in for a second before reacting to it. A small group of people decided, before you where born, that dollars are legal tender. You did not consent to these decisions and yet you are still bound by them through laws you also did not consent too.
In other words, due to circumstances beyond your control you are legally required to pay tax in dollars and spending BTC is a taxable event. Almost as if the people who created these laws didn't want competing currencies circulating in their economies? Funny that.
Remember, taxation evolved from the kings men riding up to you and pointing a sword in your face until you paid. We might be a little more civilized today, but it hasn't evolved as far as some would like you to believe.
For the record, I pay my taxes. I just don't think the world needs to be this way forever. Taxation might very well be a necessary evil for society to function, but that doesn't mean we should just accept it as the only solution and stop looking for better alternatives.
But here's the thing.. the world can and does change. Sometimes it's peaceful change through protest, politics and diplomacy, sometimes change is messy with violence and war. That's how change happens.
Change is required for Bitcoin to win. Make no mistake, that fight is already happening.
But what are we fighting for? We are fighting for a better world for future generations. The humans on the earth today are not the same humans that will be here in 100 years. The people making the rules today will soon be dead and new people will take their place. Those future humans will be our children and grandchildren.
Okay, that got a little morbid but my point is that we shouldn't stop moving just because there's a few barriers in the way. These laws are just challenges to overcome and we do that by pushing forward.
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lmao, imagine paying taxes. bitcoin is for tax dodgers, not pussys.
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100 sats \ 2 replies \ @KLT 7 Feb
I love what the Satoshi action fund is doing and it’s feeling like within the next year or two, in the US we’ll be able to transact and not have to pay taxes on spending under $200 dollars.
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I've been hearing this for a decade. Will believe it when I see it
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Can’t even argue with you there
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The Founding Fathers and patriots who established this great nation were tax dodgers.
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I guess that the people using SATs will behave very similar to the one using cash. If you have a brick and mortar store, would you declare 100% of the sales you made on cash?
So,with the cash you set aside you can freely zaps post on stacker news and not worries about the tax events.
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Ok, I will avoid "Taxation is theft", it's hard but it's true.
There is NO way that any "central" authority could handle 1M transaction per month per user... the microtransactions are impossible to report or track, just a maniac (the state) and the people with power to use force could possible write that kind of law/rule.
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Yes, Canada made KYC requirements minimal for amounts under $1000. Is that they don't want to know about those? No, of course they do. It' s that they don't have the resources to keep track all transactions that occur. Hence, I suspect most countries will more or less ignore small value transactions. Or, very selectively go after individuals. But, probably make rules such that they don't have to deal with them.
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Indeed... you need to be a "target" so... maybe one day some politic think you look bad to him and, because they have "the law", you could be imprison <3.
We need to remove money from state, at least.
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14 sats \ 0 replies \ @Krv 7 Feb
That's why privacy is so important. I wish people got the importance of this more. Many will have to learn the hard way.
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Yes yes good 👍
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Bitcoin is money.
Defining it as digital commodity is just mental gymnastic.
Country adhering to this artificial definition will be disadvantaged in the long run.
Jurisdiction where Bitcoin is treated as money and where there are are no capital gain taxes on Bitcoin like El Salvador, Argentina (?), Switzerland etc. will flourish.
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Increased regulation and de-banking probably.
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Invert invert invert
If these apps exist, what is the future of organizations that use taxation?
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Bitcoin is my property and I don't have to account for it to some dude in the IRS.
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Read whitepaper its peer to peer, No govt can control it, it's decentralised.
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Fortunatelly in my country spending BTC (spending crypto in general) is not a taxable event. But this trend of appearing diffent modalities to pay directly with crypto (cards, apps) I'm almost sure that government will change their "status" soon about "non taxable" to taxable
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IMHO I believe a lot of crypto-wise people are waking up to the fact that there are far better (and cheaper) places in Latin America with lower taxes.
I've seen a bunch of youtube channels about six-figure-worth people who gave up their citizenship to migrate to tax-friendlier LatAm countries.
I firmly believe that crypto's future depends much on how those Latin countries will thrive.
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I try not to.
Taxation shouldn't be so burdensome.
The informal economy will always exist. If they want it to be smaller they know what to do.
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It’s not fair
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.