USA Earned Income in Bitcoin & Income Taxes
For the bitcoin and tax geeks:
Hypothetical1: You live outside of the USA, have a job that pays you in bitcoin, you save in bitcoin and you pay income tax in the USA on said bitcoin income. To pay your income tax in USD requires you to convert part of your bitcoin savings to USD.
Question1: Would you need to pay a capital gains tax when you exchange bitcoin savings for USD to pay your USA income tax?
Question2: Would you have to pay capital gains tax in the USA if you bought another good or currency using your bitcoin in the case where bitcoin has appreciated since you earned it?
Question3: Same as 2, but what if the good purchased is priced in bitcoin?
Hypothetical2+Same Questions for comparison: Same USA tax framework applicability but instead not on bitcoin, but on standard currencies: You are an American citizen and taxed on your worldwide income. You live in a foreign country, and you earn income in that foreign country and paid income tax in the US on that GBP earnings. What are the responses for the questions above if you were earning GBP, and the pound appreciated vs the USD, would you pay capital gains in the US if you were to buy USD at some point in the future? What about just buying goods in the UK for GBP?
Thanks!
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from Bitcoin - The Currency of the Internet https://ift.tt/34rAB9u
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