169

Anybody that guarantees a monthly (for example 5%,11%,16%, 20%) return that would be great if that was a annual return, is running a scam. If they guarantee they could take your 20K euros and make enough money to pay you a guaranteed 24K euros 30 days later and keep the rest for themselves, then they are running a scam. If they are legitimate then they ...


164

The existing IRS guidance in the US related to bitcoin indicates it will be taxed as property. You'll sell your coins then when you file your taxes for that year you will indicate the dollar value that you sold as a capital gain with a $0 cost basis since you can't prove your initial cost. You can use a block chain explorer to get an idea of when the ...


164

Apologies for the brevity and avoidance of in-depth discussion in this answer, for simplicity's sake. To understand Bitcoin and its failures, we must understand what a 'currency' is, and why it is important. Prior to currency, people bartered for goods - I give you 4 chickens, you give me a goat. What if you don't want my chickens? How do I get my goat? ...


119

Question: if I could guarantee 20% monthly, why would I let you in on it? I wouldn’t. I’d mortgage my home, take out the biggest loan I can, and keep the 20% myself. And that’s how you know it’s a scam. If it was true, it would not be offered to you.


105

Yes, it’s a scam. After you have irrevocably paid him the Bitcoin, the check will turn out to be invalid and you’ll have to pay the money back to your bank. You might also come under investigation for money laundering.


91

Barter is a taxable event. You would owe taxes on the full fair market value of the Bitcoin the moment that you trade housing for it. Things would work the same way if you bartered baseball cards or a car for rent. Later, if it appreciated, the appreciation would be taxed as capital gains. But the original receipt is regular income.


72

Here's the question, what I don't understand and I haven't been able to find the answer to, is if I own some bitcoin, how does that help me buy groceries at the market, or gas for my car? The market I go to doesn't accept bitcoin and neither do the gas stations. If I can't do that, how is bitcoin worth anything to me? The market you go to probably doesn't ...


64

Yes it is. You might want to check out some of the other questions on this site tagged scams or sugar-daddy. Cut off contact with this person and do not have anything further to do with them. Almost certainly the prepaid card was not his own money but stolen from another victim. He is trying to use you to launder the money.


61

Stocks, bonds, and real estate all have the advantage that they are investments in underlying assets that are expected to become more valuable over time. Economies grow over time which means that, broadly, companies become more valuable over time and, broadly, land becomes more valuable over time. Sure, there is volatility. And there will be winners and ...


59

Document how you came to have the stuff in the first place. First to defend against potential government inquiry; and second to establish that you held the asset more than one year, so you qualify for long-term capital gains rate. I wouldn't sell it privately all at once, if you can avoid it. If you can prove you held it more than a year, you should ...


53

How is Bitcoin useful as a currency if so few services accept it? That's the point. It's not useful as a currency because so few services accept it. So far, it has some other uses - international transfers, storage of value, speculation object. Just because it was intended to be a currency doesn't mean it's useful as one. Like gold. Gold is not useful as ...


43

A $100,000 (US) compounded monthly at 20% would become a $5.6 billion in 5 years. Unfortunately, if this was a non sheltered account, you'd be in the maximum tax bracket and you'd only make a 'mere' $4.6 billion. TANSTAAFL (There ain't no such thing as a free lunch) If it sounds too good to be true, it usually is Money doesn't grow on trees How do you ...


38

Financial institutions are subject to additional reporting requirements where they deal with U.S. persons (→ FATCA). Many institutions therefore decline potential customers that are U.S. persons, either because the effort is uneconomical or because they are not allowed by local laws to report that data to the U.S. U.S. persons are not only U.S. citizens, ...


37

The key concept is margin requirement. Conceptually, when shorting, you are indeed credited with $60k and negative 1 bitcoin. However, first of all, you cannot simply create such a position from an empty account -- any more than you can go long from an empty account and have 1 bitcoin and negative $60k. In either case, in order to borrow (bitcoin or cash), ...


35

HUGE scam. Gigantic scam. Bitcoin is a money transaction that is irreversible. Once sent, it can't be reversed, EVER. Anytime person X sends you money, and then wants money back via an irreversible transaction -- that's always a scam. Some other irreversible methods are Western Union and Zelle. But there are still others. The money they send you is sent ...


33

Aside from the points everyone else has made, consider this: if they fail to live up to their guarantee to return 5% a month, what are you going to do about it? Do they live in the same country as you do? Do you really even know who they are and where they are actually located? If you go to your local police and tell them "Some folks on the Internet talked ...


31

Imagine a doomsday scenario and consider: what is stopping the value of the investment from going to zero? You mentioned four investments: Real estate: if everyone suddenly decided your house is worthless and won't buy it even for $0, you can still live in it, rent it out, or sell the land. Stocks: let's say you own Microsoft stock. If everyone suddenly ...


31

The IRS has a site about virtual currency, including Frequently Asked Questions. In general, a gain that you make buying and then selling cryptocurrency is subject to capital gains tax. There is no minimum amount of gain that you need before you have to pay tax, but the capital gains tax rate is based on how long you held the asset before you sold it (more ...


29

(Assuming US based on profile) Welcome to the world of income taxation. Your $1,000 in short-term gains will be treated as "normal income" and subject to your marginal tax rate. So there is fundamentally no difference in this and "I just got a $1,000 bonus - how can I reduce the tax on that income". The answers would be the same: Do something to increase ...


28

BTC isn't considered a currency so it's taxed as an asset under capital gains tax This statement is wrong. Let's say you charge 1 BTC rent on Nov 1st. From the IRS standpoint your earnings are the dollar value of 1 BTC on Nov 1st, so that's approx $6k. You will be charged income taxes on $6k. Now, if you keep your Bitcoin until the end of the year and ...


28

You need to meet a woman (or man if you are in a state that allows same sex marriage) who has a carried forward loss or other loss that exceeds the $3K/yr they can take against their own income. If they had a loss of $200K some time ago, and are taking $3K/yr, they may still have $100K they can offset with you. Marriages have been based on less than this.


24

When the network lacks sufficient processing power to protect against attack Take a look at CoinYe (West). There have been no trades since 2017 and the currency is considered defunct. Essentially Kanye West sued them for using his name and likeness, and the original developers dumped their coins. Interest waned and the network lost 99% of its processing ...


24

I think the best way to explain it would be step by step, building from concepts that can be explained in more practical terms that she might understand. You may feel the below is overly harsh, but at bear minimum, think of it like this: If you can't articulate why I am wrong about the below [and while the below is quite opinionated, these are indeed ...


20

Yes, there are ways to convert cryptocurrency to various real [believe me, I very specifically chose that word] currencies. If someone claims they can't they are probably setting up fraud of some type. The 'smell test' that fails here is that demanding very specific payment techniques, to the exclusion of all others, is often step 1 in committing some sort ...


19

There are a lot of details involved in the answers to your question. Some of them would require specialized knowledge and is institution dependent...you would need someone who writes or oversees code for a particular transaction. I will do my best to give you the big, economic, picture. Neither I nor most people in this stackexchange are CS experts. How ...


18

Bitcoin or any other crypto currency is an incredibly volatile place to put your money. Its value fluctuates significantly, increasing its risk, and its value proposition is entirely unclear. In my opinion,the only true value of bitcoin is (a) hype; and (b) a tool for money launderers and organized crime. That is only my opinion, but to buy an asset I ...


16

1) Document that you held the bitcoins for more than one year. This should not be particularly difficult. Since you haven't moved the bitcoins, you hold the key to an address that has held them for more than one year. While this isn't absolute proof, it should be sufficient. 2) Since you can't document how you bought them easily, you can just assume a tax ...


16

It actually works a lot like gold. You even mine it in a similar way to gold: spend some regular currency for the mining equipment and cost of running the equipment, and hope you mine enough to make it worth it. (Sidenote: These days it's quite difficult to mine bitcoin at a rate that doesn't cost more in electricity than you make from mining) When it comes ...


15

You can reduce your capital gains taxes in two ways (USA), off the top of my head: Sell something else at a loss to offset some of the gains Don't sell until you've held the asset for more than 1 year to qualify for the lower long-term capital gains rate.


Only top voted, non community-wiki answers of a minimum length are eligible