tonycarrera on Nostr: Speaking my language here lol. I understand the recording of the transactions. The ...
Speaking my language here lol. I understand the recording of the transactions. The bulk recording you mention is similar to how some shopping cart software does, they bundle transactions into one invoice you import into Quickbooks or equivalent.
My thing is having to also worry about taxable events and capital gain/loss in general.
For ex: a $1,000 sale could have a COGS expense of $800. The short-term volatility of BTC could be either beneficial if price goes up or a loss if price goes down. Let’s say it takes a few hours or a day and BTC is down 5%. I’d have to sell more than $800 worth of BTC I collected into fiat now to cover vendor COGS (less profit for me). In theory I would have a capital loss but capital gains or loses can’t offset ordinary business income, so it would only apply to future capital gains from BTC or other assets/investments.
Anyway, I think for most small businesses this is added work. Like I mentioned, bitpay does make this easier as they handle it all for you but defeats the point of removing middle-men.
At the moment accepting BTC as payment seems great for soloprenuer service-based businesses with little to no COGS. They might keep all the BTC and pay ordinary income taxes with fiat income from other sales.
Does that make sense or did I complicate it?
My thing is having to also worry about taxable events and capital gain/loss in general.
For ex: a $1,000 sale could have a COGS expense of $800. The short-term volatility of BTC could be either beneficial if price goes up or a loss if price goes down. Let’s say it takes a few hours or a day and BTC is down 5%. I’d have to sell more than $800 worth of BTC I collected into fiat now to cover vendor COGS (less profit for me). In theory I would have a capital loss but capital gains or loses can’t offset ordinary business income, so it would only apply to future capital gains from BTC or other assets/investments.
Anyway, I think for most small businesses this is added work. Like I mentioned, bitpay does make this easier as they handle it all for you but defeats the point of removing middle-men.
At the moment accepting BTC as payment seems great for soloprenuer service-based businesses with little to no COGS. They might keep all the BTC and pay ordinary income taxes with fiat income from other sales.
Does that make sense or did I complicate it?