Bitcoin Forum

I'm interested in dealing with Bitcoins, and I read that in the U.S. Bitcoin transactions are subjected to capital gains tax and mining is subjected to income tax. I was wondering if these taxes are actually paid when dealing with Bitcoins or is it just for show and not actually being enforced?

Maybe here you can find some help, surely something more adequate than a simple answer on a forum.

http://www.reddit.com/r/Bitcoin/comments/1uccfz/i_am_a_tax_attorney_here_are_my_answers_to_the/  #10 #14 are what you're probably looking for.
http://www.reddit.com/r/Bitcoin/comments/21g6sx/i_am_a_tax_attorney_here_is_what_the_irs_notice/

But remember to always talk to your accountant before doing something.

Does Bitcoin transactions need taxes in the US?

Thanks for the articles! Now, I'm wondering if anyone is evading these taxes or if for the most part all American Bitcoin users pay for these? I'm not trying to avoid or anything I'm also doing a research paper on this.

Suckers, this is why I live in Canada eh
Sucks so much that you guys have to pay tax on MINING!  How the hell are you going to profit now.

Yes taxes on Bitcoin as capital gain and mining as income tax is real and needs to be paid unless you'd like to end up in jail over here. As far as it being enforced, the IRS may not have that many tools as of yet, but as time passes they will get better at enforcement and will be sure to tax you up the @$$ for any coins you haven't claimed.

I'm sure there are people evading taxes on bitcoin right now, but that obviously is not advised.

I believe there was some update from the IRS recently stating that small at-home style miners didn't have to pay an income tax on them (be sure to verify this though), as their biggest goal was taxing the corporations with the massive amounts of mining power. Mining right now is largely unprofitable for everyone, whether or not they are paying taxes. The few exceptions might be for people with either small rigs in apartments that have free electricity, or places with super-ultra low electricity costs (IE 2-3 cents / KW)

Any idea on how to report divs from BTC-denominated stocks?  From my limited research I've learned that private equity no-1099-DIV-issued divs are taxed as long term capital gains, but I can't find anything specifically BTC-related. 

No more than cash transactions or bartering.

At least that opens up the opportunity to deductions for hardware and electricity.. if you're a Black Arrow pre-order scam customer you might even end up with a rebate (that last bit is tongue in cheek sarcasm)

There are many things you can hide from government, including bitcoins. But if they show up, you will have to pay a high penalty.

If the IRS can find evidence that you are not reporting all of your income then they will fine you and potentially press criminal charges against you. It is always advisable to follow the law as the ramifications of breaking the law are often great.