US taxation, does FEIE apply to Bitcoin

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US taxation, does FEIE apply to Bitcoin


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Old 18th April 2019, 10:00 PM
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Default US taxation, does FEIE apply to Bitcoin

Say you're selling Bitcoin for $50,000 per year, US citizen living in Germany. Since those 50k are the only income, can it also be off-set with the 102k of the FEIE and if not then how can I pay myself those 50k in capital gains from bitcoin without paying US tax but only Germany tax on it as I'd live 365 days per year in Germany.

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Old 19th April 2019, 06:30 AM
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No, the FEIE only applies to so-called "earned income" which means salary and wages. If you have a business established in Germany, you can apply the FEIE to your earnings from the business, but only up to what would be considered a "reasonable salary" for the work you put in. Capital gains are very much excluded from the FEIE for US tax purposes.

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Old 19th April 2019, 03:40 PM
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Understood, now considering you're selling bitcoin which is classified as asset, Germany to my knowledge does not tax any bitcoin assets held for over 1 year. So in Germany, the country I would live I do not pay tax while in the US where I do not live nor have anything I pay a tax-rate of 0%, 15% or 20%. How on earth is the IRS ever gonna find a bitcoin sale from an expat, especially since it's never considering a taxable amount in german law

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Old 19th April 2019, 08:10 PM
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First of all, the US and German tax authorities don't exchange information as a rule - unless one side or the other has reason to suspect that some source of income isn't being reported, and that it's enough to generate a bit of tax for the government.

I frankly have no idea how either Germany or the US tax bitcoin transactions, though I suspect they are taxed more or less like "investments."

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