Dev.SN ♥ developers
Sections
Dev.SN
posted by
LaminatorX
on Wednesday March 26 2014, @08:40AM
from the you-know-you've-arrived-when dept.
from the you-know-you've-arrived-when dept.
gishzida writes:
Reuters reports, "Wading into a murky tax question for the digital age, the Internal Revenue Service said on Tuesday that virtual currencies such as Bitcoin are to be treated as property for tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency," the IRS said in a statement."
Better put that BTC wallet in a mattress.
This discussion has been archived.
No new comments can be posted.
IRS: Virtual Currencies are Taxable
|
Log In/Create an Account
| Top
| 1000 moderator points
| 12 comments
| Search Discussion
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
I'm not a robot like you. I don't like having disks crammed into me... unless they're Oreos, and then only in the mouth.
-- Fry
(Score: 5, Interesting) by VLM on Wednesday March 26 2014, @10:04AM
Not as I interpret it, no.
The mining has to be declared as income at market rate at the time of mining.
When I software mined, my coins had a total market value of a few cents, a rounding error. I assure you they didn't exchange for much and the 5000 BTC pizza is no myth. So I think I'm all good. However, if I ASIC mined 100 coins today (I'm not into that, but, in theory...), that's a substantial amount of income to declare this year.
Buy and sell is a mere cap gain under cap gain rules, or so they say.
The more important question is now that its categorized, how is the IRS going to require documentation? I certainly can claim long term capgains out of the blue, but if audited how do I prove it? There is some safety in just declaring the whole thing as taxable misc income, I believe no possible audit outcome could involve anything other than a small refund check coming back to me.
I software mined on a machine that hasn't physically existed for years and I certainly have no access and no multiple year old backups. How can I prove in court if it became necessary that someone else did not mine and then pay me income for "whatever" as opposed to the transfer came from a miner that no longer exists but I claim was once mine? And there's a handful of coins I had that spent time living on a mobile phone wallet that no longer exists, lived on a machine I do still have control over, went to my own version of cold storage for awhile, went to an account I control on coinbase... it seems very tricky to prove its long term capgains and not regular income.
Luckily for me its hobby sized money and not my bread and butter. Those guys in the biz must be tearing their hair out over the .gov getting in the way. Providing only half guidance is worse than none at all. As a small amount windfall from hobby screwing around, I personally plan to declare the whole dollar amount from selling on coinbase last fall as plain old taxable income, but to each their own.