
Originally Posted by
Melonie
It's actually worse than an 'alternate currency' scenario. Gold is a ( taxable ) commodity. Thus if a US customer 'purchased' a one ounce gold bar for price X ( from somewhere ), and then 'sold' it to you for price Y a day / week / year later as payment for services rendered, the transaction would have to be reported to the IRS by that customer - with the capital gain or loss ( from the price fluctuation ) accounted for versus other capital gains and losses ( with potential additional taxes due if Y was greater than X ).
A virtually identical situation is also technically true for payments via BitCoin, which is considered to be a ( taxable ) equity i.e. shares of stock. And if the price you 'paid' to the customer for the gold bar / bitcoin stock 'shares was zero dollars, the customer would have even bigger tax reporting problems because this could constitute a 'barter' transaction with a whole 'nuther set of IRS reporting requirements for that transaction ... see . Thus transacting in precious metals or crypto-currencies is highly likely to launch both the customer and your 'business' to the top of the IRS audit priority list.
Besides the customer's 'end', if you received a one ounce gold bar as payment, and later 'sold' it to APMEX or whoever, you would ( eventually ) have to make a similar transaction report on your tax return because APMEX is required to report the sale to the IRS ( via an annual broker's statement with 1099's for each transaction ). On your own business tax return, you would have to account for the gold price on the day you actually received the gold from the customer, the amount of money you actually paid for the gold bar ( i.e. zero ), the gold price on the day that APMEX 'bought' the gold bar from you, and the amount of money you actually received for the gold bar. You would then have to count the difference in price as a taxable short term capital gain or loss, while counting the price on the day you received the gold from the customer as ordinary or 'barter' income.
Also, I'm not sure how that capital gain would 'interact' with your web income because, unless you are incorporated, the capital gain could be considered to be 'personal' income. Accounting wise, this could create a situation where your web 'business' continually operates at a huge loss ( all dollar denominated expenses but no offsetting dollar denominated business income ). If nothing else, this is guaranteed to get you audited at some point ... in addition to creating huge business accounting / tax filing nightmares.
Also, did I mention that the IRS filing requirements for such transactions also require that the 'business' operator must obtain the real name, real address, and real SS# of every customer who pays via 'barter' or precious metal / equity 'sale', and that, as a side effect, every customer must be provided with the unincorporated camgirl's real name, real address, and real SS# which are listed on the 1099-B which the unincorporated camgirl must fill out and issue to the customer and the IRS for every separate non-cash based customer transaction ? This could be avoided if the business is incorporated under it's own name and own EIN ... but of course that involves additional money and additional 'paperwork'. And doing so then raises the question as to whether that business must jump through the regulatory 'hoops' to become a licensed and certified 'commodities broker' to trade in gold and silver, or a licensed and certified 'stock broker' to trade in BitCoin.
In case this isn't already totally obvious, the US gov't has set things up such that attempts to use gold and silver as de-facto currencies are a practical impossibility under existing laws and IRS regulations. And recent rulings now place BitCoin in the same situation. Indeed, businesses which began transacting in BitCoin before the US court rulings declaring it to be 'stock shares' rather than a 'currency' may face huge after-the-fact 1099 compliance requirements.
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