So.... with all the traveling lately --- and the "bringing home" the rig... I've been distracted to say the least. The beauty of income investing is that you can be distracted and the cash keeps flowing IN. The $18K from Annaly (NLY) I picked up on the 29th and the $9K from AT&T (T) posted yesterday - just about paid for the fuel burned last week.
With the distraction --- I'd completely forgotten about Bitcoin.... apparently the IRS HASN'T!
While the accounts are "digital" like a Swiss bank... in an audit... you'd have to disclose the transactions. You'd also likely be asked about the unexplained deposits in your checking account. Audits - if they smell fishy - can be especially nasty. Remember too... that trying to hide "income" is the crime. Filing false income taxes is not something that should be taken lightly. I'm not saying anyone is doing this - I'm saying it might be tempting given that Bitcoin is not going to 1099 you like your Schwab account is going to... so it might be "tempting" to just forget about this little extra dough.
http://www.forbes.com/sites/robertwo...ut-of-bitcoin/
This reminds me of a guy that used to work for me. He owned lots of rental property - and had his hand in a restaurant/night club... etc. So he gets an audit - and he proudly takes all his receipts down etc showing that while he made great money - he also expensed nearly every dime. Weeks went by and he finally hears from Uncle Sam... he owed $18K!! Of course he immediately proclaimed that was impossible..... but -- said the IRS officer -- his check book showed NO checks written for cash -- or to a grocery store -- or to the dry cleaners etc.... so asks the agent "what did you live on"?? Thus Robert wrote them a check right then and there rather than risk an even more onerous audit!! He's still laughing about this little "exchange". He also learned a good lesson. Mind you --- this was around 1974 or so -- and 18K was a chunk of change!