You can't depreciate the ASICs, but you could probably §179 them.

The safe route I would recommend for now when sending or receiving taxable Bitcoins is to record the dollar value of the Bitcoins at the time they are sent or received for tax reporting. This will probably be a pain given how much the price can fluctuate, but it is the safest route.

1. Correct. As I said: record the dollar amount of each SD gain as you win the coins and the dollar amount of the coins you spent. You would claim the winnings as line 21 income and deduct the losses (to the extent of winnings) on a schedule A if you itemize your deductions. Maybe Satoshi Dice will implement tax forms into their site at some point, which I imagine they could only do if you registered an account with them or something.

2. You may not have to amend your previous year returns since the IRS did not regulate Bitcoin earnings in those years. The IRS also doesn't have a record of BTC you earned in previous years, so I wouldn't worry about an audit. Keep in mind that the IRS generally allows amended returns for the past three tax years only.

4. You could claim such losses on form 4684, but I imagine you would have to make a very strong case to prove you had ownership of such lost or stolen coins for the IRS to allow such a deduction. And, again, you would probably have to claim the loss on the value of the coins at the time of the theft, fraud, or loss.

5. Yes, I would highly recommend (like I said earlier) recording all Bitcoin dollar values in and out for tax purposes. A simple Excel spreadsheet would probably suffice for this.

6. Yup, same as #5. I don't think the FMV of Bitcoin varies enough from wallet-to-wallet, exchange-to-exchange, for it to matter too much which source you use. For example, I use the send value of my blockchain app to record the value of my Bitcoins.

7. The biggest target area for IRS audits will be, I imagine, schedule D Bitcoin transactions (which tend to be a target form on its own). Hopefully the IRS will release more guidelines for Bitcoin related tax reporting, but for the time being just do the best you can to record what you get when you get it. If you can show the IRS that you used reasonable methods at your disposal to record what you pay and earn, you should be fine. I also imagine it'll be difficult for the IRS, in the beginning, to harshly enforce Bitcoin transactions, given the newness of the ruling and the nature of the currency (or property, as per the IRS) itself.

Just completed the survey. Good luck with your Ph.D program!

I wanted to put this up earlier, but I've been so busy with work that I haven't had the chance until now. Got mine in the mail yesterday. Pictures don't do these coins justice. Absolutely gorgeous!

You may have to deduct a percentage of the amount used for the business, which will be difficult since your electric bill is for every appliance in your home. But if you come up with a reasonable calculation, you'll be fine; you could probably apply that same percentage to the internet bill as well. The hardware would be pretty easy to calculate: mining hours divided by total hours of use.

That made me chuckle.

I commissioned a digital painting from a guy around the end of 2012, I believe, for BTC3. At the time, Bitcoin was around $30, I believe.

At today's rate, I paid $1,751.31 for that painting. And I don't regret it at all. It's fantastic to see how far BitCoin has come in just over a year.

I still have that painting on my computer. At some point I'd like to get it made into a framed poster for my office wall. It'd be a good story, I think, to bring up the success of BitCoin from when I was first introduced to it.

They may have too many people turning in coins over fear from the whole Gox fiasco.

You would think an institution with as many resources as the Fed has would be able to find someone, anyone, better to handle a hearing than that lady. You could throw sardines at a wall and the noises it would produce would be a more compelling answer than her inane mumbling.

Will you be sending shipping confirmations as the coins go out?

I was about to post and say that's not really an old car, but then I realized 2005 was nine years ago... weird to think that a decade ago was only 2004.

It's been said already: all you can do at this point is contact the company and explain the mistake to them. If they have good business practices, they'll send the coins back to you. Here's hoping you can get your coins back!

I think that guy was making a joke.

Anyways, I agree. Especially if you look near her fingers, it looks like a poor paste job.

Yeah, I haven't read a fiction book since that I've enjoyed as much as I did Hitchhiker's. I feel like I reached the peak too soon, lol.

Power to you, mate. It's always inspiring to hear of someone who doesn't let crap get him down, and it sounds like you've had a good deal of crap to deal with. Glad to hear your hard work is paying off.

I've got my wife and two daughters that drive me to work hard. At times when I feel like success isn't worth it to me, I know it'll be worth it to them.

Bitcoin is regulated in China? How so? I hadn't heard that yet.

I've seen two people, I think, trying to sell Bitcoin ATMs in the past week. I'm sure they'd go over pretty well in some areas, but I would wait until Bitcoin gains more of an audience before investing in one.

Well, that would shoot the property tax up for sure. If they paid for everything income taxes do now? No, I probably wouldn't support them. If I have to pay taxes, I want them to pay only for necessary services.


I didn't say they were great. The topic is to pick the least of the bad, not which of the bad is actually good. Given what property taxes usually pay for and the fact that they're not a huge burden on most people, I'd say they're not as bad as some of the other taxes.

Soccer in a Football World is a must for any U.S. soccer fan. The Ball is Round (global history of soccer) is also very good, but be prepared to set aside some time for it (it's over 900 pages).

I also really enjoy Ron Paul's books. Just finished re-reading The Revolution the other day.

Fiction-wise, nothing beats the Hitchhiker's Guide series for me.

Probably property taxes. They're not usually as expensive and they do go towards something more necessary than what income taxes go towards (namely roads).