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Title: Bitcoin & Tax Write-Off Post by: huryde on December 15, 2013, 05:27:22 PM So it seems safe to say you must report earnings if you had funds from trading on exchanges deposited in your account to the IRS. If you are mining at home can you write off a portion of your electrical bill?
https://en.bitcoin.it/wiki/Tax_compliance Quote: What expenses can I deduct/expense/itemize if I set up a Bitcoin mining operation? That depends on your situation. Generally speaking, though, you can deduct business expenses that are ordinary and necessary. Buying video cards would be both of these, buying a big screen TV to watch while mining would be neither. Title: Re: Bitcoin & Tax Write-Off Post by: empoweoqwj on December 16, 2013, 01:37:14 AM So it seems safe to say you must report earnings if you had funds from trading on exchanges deposited in your account to the IRS. If you are mining at home can you write off a portion of your electrical bill? https://en.bitcoin.it/wiki/Tax_compliance Quote: What expenses can I deduct/expense/itemize if I set up a Bitcoin mining operation? That depends on your situation. Generally speaking, though, you can deduct business expenses that are ordinary and necessary. Buying video cards would be both of these, buying a big screen TV to watch while mining would be neither. I would argue that the electricity used for mining is an absolute necessity for the business and hence an expense, but I don't work for the IRS. Surely this crops up with other businesses? Whether you can deduct electricity charges? Title: Re: Bitcoin & Tax Write-Off Post by: mgio on December 16, 2013, 05:59:10 AM So it seems safe to say you must report earnings if you had funds from trading on exchanges deposited in your account to the IRS. If you are mining at home can you write off a portion of your electrical bill? https://en.bitcoin.it/wiki/Tax_compliance Quote: What expenses can I deduct/expense/itemize if I set up a Bitcoin mining operation? That depends on your situation. Generally speaking, though, you can deduct business expenses that are ordinary and necessary. Buying video cards would be both of these, buying a big screen TV to watch while mining would be neither. Yes, but there are a lot of rules you need to follow if you are operating a business out of your home. If you are attempting to write off electricity you probable need to have a separate meter on your mining equipment so you can say exactly how much electricity it is using and write off that portion. Also note that you are writing it off against your mining income. So you need to declare every satoshi you mine and the exchange rate it was at the time you mined it and declare it as income. Title: Re: Bitcoin & Tax Write-Off Post by: empoweoqwj on December 16, 2013, 06:07:11 AM So it seems safe to say you must report earnings if you had funds from trading on exchanges deposited in your account to the IRS. If you are mining at home can you write off a portion of your electrical bill? https://en.bitcoin.it/wiki/Tax_compliance Quote: What expenses can I deduct/expense/itemize if I set up a Bitcoin mining operation? That depends on your situation. Generally speaking, though, you can deduct business expenses that are ordinary and necessary. Buying video cards would be both of these, buying a big screen TV to watch while mining would be neither. Yes, but there are a lot of rules you need to follow if you are operating a business out of your home. If you are attempting to write off electricity you probable need to have a separate meter on your mining equipment so you can say exactly how much electricity it is using and write off that portion. Also note that you are writing it off against your mining income. So you need to declare every satoshi you mine and the exchange rate it was at the time you mined it and declare it as income. I'm glad I don't live in the "land of the free" then ;) Title: Re: Bitcoin & Tax Write-Off Post by: SgtSpike on December 16, 2013, 07:15:18 AM So it seems safe to say you must report earnings if you had funds from trading on exchanges deposited in your account to the IRS. If you are mining at home can you write off a portion of your electrical bill? https://en.bitcoin.it/wiki/Tax_compliance Quote: What expenses can I deduct/expense/itemize if I set up a Bitcoin mining operation? That depends on your situation. Generally speaking, though, you can deduct business expenses that are ordinary and necessary. Buying video cards would be both of these, buying a big screen TV to watch while mining would be neither. Yes, but there are a lot of rules you need to follow if you are operating a business out of your home. If you are attempting to write off electricity you probable need to have a separate meter on your mining equipment so you can say exactly how much electricity it is using and write off that portion. Also note that you are writing it off against your mining income. So you need to declare every satoshi you mine and the exchange rate it was at the time you mined it and declare it as income. Title: Re: Bitcoin & Tax Write-Off Post by: mgio on December 16, 2013, 04:55:42 PM So it seems safe to say you must report earnings if you had funds from trading on exchanges deposited in your account to the IRS. If you are mining at home can you write off a portion of your electrical bill? https://en.bitcoin.it/wiki/Tax_compliance Quote: What expenses can I deduct/expense/itemize if I set up a Bitcoin mining operation? That depends on your situation. Generally speaking, though, you can deduct business expenses that are ordinary and necessary. Buying video cards would be both of these, buying a big screen TV to watch while mining would be neither. Yes, but there are a lot of rules you need to follow if you are operating a business out of your home. If you are attempting to write off electricity you probable need to have a separate meter on your mining equipment so you can say exactly how much electricity it is using and write off that portion. Also note that you are writing it off against your mining income. So you need to declare every satoshi you mine and the exchange rate it was at the time you mined it and declare it as income. Sure, unless you are audited, then you might have some trouble. Saying that you have a business out of your home is a big red flag for being audited. You need to keep your business and personal expenses very separate. Title: Re: Bitcoin & Tax Write-Off Post by: quone17 on December 16, 2013, 05:54:44 PM Yes I believe you can only write off business related expenses if you say that your business is mining (this may only be in my state and some others, I'm not sure of federal). Otherwise it will be considered a hobby and you can't deduct losses and expenses. Running a business, particularly out of home is a big risk of audit. Plus especially if it's BTC, I mean will most people at IRS know what BTC is? Much different than saying you're a plumber or something who runs a business out of home. Good luck but I'd err on the side of paying more as I'm worried IRS wants to make example out of someone for BTC. Or, you could say it's small potatoes and they won't care. hard to say
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