It's active, although don't have integration into OKCoin futures.

Depending on the volume, send a message to support with any data you have and I'll see what we can do. I know some of the accountants we list have dealt with clients with similar data.

Please stop confusing people and providing bad information. The $600 is a form requirement, nothing to do with taxes. For the miners, it's income, they declare it and pay taxes no matter the amount. For the pool operator, it's gross income so would be declared in their P&L, but the payouts are a business expense so would reduce net income and corporation taxes.

This is a normal requirement for reporting, even outside of Bitcoin. See https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Reporting-Payments-to-Independent-Contractors.

For example, if you did some work for me as an independent contractor and I paid you more than $600 in a tax year, I have to send you a 1099-MISC. If I run a payment network business, and I make payments out to individuals, then I have to send them a 1099-MISC if they receive more than $600 per year. This could well be applied to mining pools, in that they ought to be sending their individual contributors 1099s.

So it doesn't really apply to individuals (except they might receive a 1099). In any case, it's for when you have paid out, not received income so there are no tax implications for the payer.

---

Rules vary by country. If you say where you're from, someone might be able to help.

You're talking about making payments, I'm not sure why, but we're talking about ordinary income and capital gains income. The former is irrelevant to OP.


You started talking about mining income and now switched to making payments. All mining income is reportable and taxable. For B2B payments, then there is a $600 reporting requirement for issuing a 1099-MISC, but taxes are irrelevant.

They are both taxable and reportable.

---

While a pain, yes, the IRS requires you report all capital gains transactions. So in your example there is one tax event per sell transaction even if in the end you came up with the same value.

Thanks for saying, glad you find the site useful.

---

It applies when you sell on localbitcoins.

> you withdraw your funds to a foreign bank account [euro currency]

If you are selling BTC (or any coin) into EURO, then capital gains applies. Doesn't matter if you haven't converted into USD, but you'd have to calculate any USD gains. If you just mean withdrawing already converted funds (in USD/EURO) from localbitcoin to a foreign bank account, then this isn't a tax event. (unlikely exception, if there was a gain in exchange rate of more than $200).

Yes. Although you ought to be using FIFO, so using the basis of the earliest coins you owned.


The default is FIFO, so you would have long-term gains of $401-$x from your 10 BTC pool. You could use LIFO (last-in-first-out) but you should use it consistency and not to avoid taxes. The IRS might not accept it in an audit.

If you maintain separate wallets and separate exchange accounts, then you can keep one for investment and one for spending. As long as they never mix.


All capital gains transactions have to be reported. However, they round to nearest dollar (so $0) on your tax forms.


This is wrong. There are no limits for capital gains in the US, everything is reportable. You are confusing the 1099-MISC business form requirement.


See https://bitcoin.tax for more information and to help calculate your capital gains and income.

1. Depends if it is classified as trading (self-employed income) or a hobby. Essentially, the test is "are you seeking to make profit". If so, HMRC would see it as self-employed income and it's added to you other income for taxes. If you are occasionally filling in a survey and happen to make some profit, it's sounds like a hobby. If you are a serial-survey-filler and so making a tidy sum, you are doing it for profit.
2. Bitcoins aren't taxed, but any Bitcoin income is reported as income at a pound value. So if you earned 1 BTC and you report your earnings, it would be £288, for example, or the fair market value.
3. It's possible. If you earned 100 BTC and then spent them, you still earned 100 BTC that could be taxable income.
4. I would keep records anyway, just in case.

One sec...


Are you one of those people who doesn't take a breath when talking?

Answer:

First, if you are a day trader, then the rules are different. This would be a business and probably your primary income. Most people aren't.

So as an individual, you are taxed only on gains (and losses) not the whole conversion.  In your first example, you made $100. That is $100 short-term capital gains.

Next trade, you put $2,100 in and get $2,200. Another $100 short-term capital gains.

Now, say you put that $2,200 back in and only get $2,000 out. Now you have a $200 loss, which means you net gain is zero. No income, no taxes.

There is an added complication if you were using Bitcoins you already owned, which is that you'd have to take their cost basis into account when you started. However, if you don't own any and are just starting with a USD balance, then at the end of the year you can just take your final USD balance less what it was when you started. That's your gain (or loss) and is capital gains income.

Ok. First it depends where you live. Different countries have different rules, but mostly, if you make any money it's going to be taxable income. The question then becomes about thresholds, deductibles and rates.

So, let's assume you're in the US.


File your taxes as normal. Any profits you made from Selling BTC (or any coin) is capital gains. You also have to treat spending as selling, since your are bartering your coins for something with a fair value. So, again, calculate any gains. All this goes in 1040 Schedule D.


While the IRS hasn't confirmed one way or the another, they see a transfer of property as a tax event. Therefore you need to work out any potential gains. Think of it as selling ABC into USD and then buying XYZ with that USD. The alternative would be that you're treating digital currencies as like-kind exchanges, but they would likely fail this test. Appeal if you get an audit and let me know how it goes


Mining is income. The value of the income is the market value of those mined coins when you received them. Doesn't matter if you keep them, sell them or lose them, you still have that value as ordinary income. When you do come to sell/spend those coins, you use that value as the costs basis to work out capital gains.


Doesn't really matter that it's Bitcoin, still tax fraud. You could make the same argument for earning cash and not declaring it.

Will you get into trouble? Yes, if you are caught. The IRS will calculate your taxes for you, which you'll pay with interest, plus any appropriate fines and civil penalties.

With taxes, you are guilty until proven innocent. So KEEP RECORDS. The burden is always on you. If you can't show where and how you got that money, the IRS will tax it at the maximum value.

If you need help calculating your Bitcoin taxes, we've been doing it for everyone for years:

https://bitcoin.tax

Here are some top 10 tips about taxation that also might explain a few things.

https://bitcoin.tax/blog/bitcoin-taxes-things-to-remember/

You need to ask for a refund. They were wrong.

There are no limits for capital gains reporting in the US. Every $1 gain should be reported.

The $600 common misconception is the limit at which a business needs to issue a 1099 form. Nothing to do with gains.

First, you should understand the responsibility to keep records is on you. And in taxes, you are "guilty" until proven innocent. You do this by showing records.

Next, it doesn't matter when the IRS published guidelines. They are retrospective. Any coins you ever mined follow the same rules, which is, they are income at their fair value at the time of receipt. There has been well-documented historic prices for Bitcoin since they started, so you are able to find prices. Or, enter your mining volumes into https://bitcoin.tax and we'll look it up.

For capital gains, you take the amount you receive for the coins less their cost. The problem here is that if you can't adequately show (in an audit) when you received those coins, the IRS could treat them as 100% short-term capital gains. This effectively means they are being taxed at income rates rather than discounted long-term rates. However, this is really no different than mining a coin and then spending/selling it. You will pay income tax on the mined portion and capital gains tax on the gains portion. The only difference is if you can show it was long-term.

If you can't find records of when you acquired these coins, well, first, look harder. The blockchain exists for a reason. If you can track your mined coins to a payout address you can show when you received them. Otherwise you could estimate it, the date that is, and then look up the fair value. Or, lastly, treat it all as short-term gains. If you are paying the maximum amount of tax, the IRS won't care, they are getting what they are owed.

As soon as they arrive into an account under your control, it is income. So you earn income every time a deposit is made, to the value of x BTC * market value (which could be a consistent BTC daily price). This is the taxable income in USD you received as well as setting the cost basis for those coins for when they are sold/spent.

Yes. Any time you convert from capital property to currency, it's a tax event and you have to account for gains.


Depends on if you want a USD balance or a BTC balance.


If you did an ACH where your coins got converted to USD, then yes.


No. They are no reporting mechanism at the moment. If they did, you would get a form, as you do with a bank or broker. However, they will report your account for any suspicious activity like all banks.


Simply put, if you choose to have a USD account, any transfers you make in are tax events and capital gains are possible. Any transfers out is in effective purchasing of new coins, and so sets their new cost basis (e.g. date and price).

If you have a BTC account, there an no tax implications except when you sell those coins.


Coinbase doesn't hold USD balances in their BTC wallets, it's BTC. However, they do have a separate USD wallet, where you would be selling and so capital gains apply.

You're wrong.

In IRS Notice 2014-21, bitcoin mining is considered income on the date of receipt. You need to work out the number of mined coins * the daily price. and declare it as income. You will pay taxes on that income like any other income.

They will be submitting fraud information like any other financial institution. We have also heard that they track where coins are sent to from their wallets and have closed accounts on that alone.

Nonetheless, if you haven't spent or sold any coins, you don't owe any taxes. If you have, you would need to calculate if you made any gains (or losses) and report them as part of 1040 Schedule D.


This is wrong. All gains need to be declared.

http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance

Bitcoin itself isn't taxable, no, but exchanging for fiat isn't the only taxable event. Bartering is also a tax event, which includes spending or trading altcoins, for example.


The US tax system is an honor system. If you generate gains from spending Bitcoins that have increased in value, you are supposed to declare it. Poor recordkeeping is not an excuse if you were audited.


It's bad advice because it's wrong.

Most tax professionals don't think so, since "A wash sale occurs when you sell or trade stock or securities...". Bitcoin are neither.

Should they? Maybe, but according to the tax code, they don't.

If you want an opinion from a tax lawyer:

http://www.bitcointaxsolutions.com/bitcoin-wash-sales/

You don't have to report anything if all you did is buy Bitcoin.

But spending or selling them might incur capital gains. This is the difference between the amount you sold and what you bought.

You should also include any losses, since it is in your best interest, as they can offset any other gains you might have (e.g. stocks) or income taxes.

See here:

https://bitcoin.tax/blog/filing-your-bitcoin-taxes/

https://bitcoin.tax

Feel free to ask if you have any questions.


In many countries, the profits from buying and selling property or assets is income. Income is taxed. In the US, if you mined any coins, it is income. If you sold/spent any coins for more than they were purchased, it is capital gains income.


Depends where you live in EU. Many countries tax capital gains, and Bitcoin is treated in the same way. You don't pay taxes on Bitcoins, but you pay taxes on profits you make from selling them.

Yes, it's property so you treat it as capital gains.

Work out the difference between what you bought the coins for and what you sold them for, less any fees. That is you capital gain or loss. It is reported in total on 1040 Schedule D and line by line in Form 8949.

You can use https://bitcoin.tax if you need help.