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Title: IRS mining and Staking Post by: virtualfaqs on March 26, 2014, 03:10:51 AM From the IRS article
Q-8: Does a taxpayer who "mines" virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8: Yes, when a taxpayer successfully "mines" virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income. Now Blackcoin stakes like every 2 hours. Is staking considered mining? How the hell is this supposed to be calculated? This is the most ridiculous clarification ever as it applies to receiving coins rather than selling. Title: Re: IRS mining and Staking Post by: micryon on March 26, 2014, 03:13:22 AM I don't think lawmakers have caught up with the latest coin innovations yet... It will be fun to watch someone explain PoS to them. Let's face it, altcoins is the fringe of the fringe... :)
Title: Re: IRS mining and Staking Post by: jonnysomething on March 26, 2014, 03:15:35 AM Does this mean if I mine a coin, then it gets added to an exchange and skyrockets and I make a million bucks, I don't owe a cent because at the time of mining there was no value?
It's good to see them rushing laws that don't make sense to try and squeeze some profit out. Title: Re: IRS mining and Staking Post by: tk808 on March 26, 2014, 03:24:14 AM Does this mean if I mine a coin, then it gets added to an exchange and skyrockets and I make a million bucks, I don't owe a cent because at the time of mining there was no value? It's good to see them rushing laws that don't make sense to try and squeeze some profit out. Yes, coins have no value in the beginning of their lives. They are mainly targeting the large bitcoin miners. Title: Re: IRS mining and Staking Post by: linolis on March 26, 2014, 03:38:48 AM Does this mean if I mine a coin, then it gets added to an exchange and skyrockets and I make a million bucks, I don't owe a cent because at the time of mining there was no value? It's good to see them rushing laws that don't make sense to try and squeeze some profit out. No. Losses and gains are covered. Q: How is the fair market value of virtual currency determined? A: For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied. Q: Does a taxpayer have gain or loss upon an exchange of virtual currency for other property? A: Yes. If the fair market value of property received in exchange for virtual currency exceeds the taxpayer's adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency. See Publication 544, Sales and Other Dispositions of Assets, for information about the tax treatment of sales and exchanges, such as whether a loss is deductible. Q: What type of gain or loss does a taxpayer realize on the sale or exchange of virtual currency? A: The character of the gain or loss generally depends on whether the virtual currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes capital gain or loss on the sale or exchange of virtual currency that is a capital asset in the hands of the taxpayer. For example, stocks, bonds, and other investment property are generally capital assets. A taxpayer generally realizes ordinary gain or loss on the sale or exchange of virtual currency that is not a capital asset in the hands of the taxpayer. Inventory and other property held mainly for sale to customers in a trade or business are examples of property that is not a capital asset. See Publication 544 for more information about capital assets and the character of gain or loss. Title: Re: IRS mining and Staking Post by: iGotSpots on March 26, 2014, 04:34:40 AM Lol that is fucking impossible unless all the exchanges are forced to have the current USD value attached to every trade
Title: Re: IRS mining and Staking Post by: Nxtblg on March 26, 2014, 10:22:56 AM Lol that is fucking impossible unless all the exchanges are forced to have the current USD value attached to every trade It gets worse, by my reading. According to the IRS a/o yesterday, a cybercurrency is "property." http://www.reuters.com/article/2014/03/25/us-bitcoin-irs-idUSBREA2O1LR20140325 Quote (Reuters) - Wading into a murky tax question for the digital age, the U.S. Internal Revenue Service said on Tuesday that bitcoins and other virtual currencies are to be treated, for tax purposes, as property and not as currency. From IRS Publication 544 (http://www.irs.gov/publications/p544/ch01.html#en_US_2013_publink100072259): Quote An exchange is a transfer of property for other property or services. So, every time you trade on Cryptsy or elsewhere you incur a taxable event. You exchange property for property. More to the point: every time a tradebot trades on Cryptsy or elsewhere for you, you incur a taxable event. Even if the exchange you're using founders and goes down a/o tax time. Talk about "fucking impossible"...it would be even "fucking impossible" to for the IRS to audit if a diligent paper trail is bundled in with the return. Not that I'm dropping any hints or anything. ;D |