So, what I probably need is a bitcoin IRA with no yearly upper limit for contributions.

Is it true in the US the mined bitcoins must be reported without any reduction for mining costs, i.e. miner costs, power, and the value is what btc is valued at the time they were mined?

This seems grossly unfair for the hobbyist miner.  If mined bitcoins were only taxed when finally sold or bartered a retiree could pay those few extra thousand dollars in bills, that accrue each year from nothing more than living, by cashing in a few bitcoins without reaching a level of income that would be taxable.  As it is, paying tax on every bitcoin mined, tax will have been paid on those sold making up the difference between the retirement SS check and the taxable income level that for everyone else would be non-taxable income.  

Last year and this will for most of us hobbyist miners be the only years with appreciable bitcoins mined.

I think I can build the needed data from other sources.  Having shifted from reading IRS pubs to getting data organized relating to BTC purchases, it's tedious but doable.

I don't particularly trust tax software.  I suspect they have a yearly renewal and I recall an unpleasant surprise from a Physicians Desk Reference on CD one year which cropped up in January the following year.  I'd like to see something in Debian or Ubuntu archives that would do a data plug and play on the US IRS 1040.  So many suggested possible alternative ways to file there have to be some ways better than others.

Noting a suggestion to return a letter of explanation along with the tax return while reading IRS pubs, it seems like the best way to go.  First time moving beyond the 1040A.  I think if I explain what I'm doing clearly the worst that will happen if incorrect is directions as to the correct docs to use.

But yes, your suggestion to consult a tax professional is a good one.  I've heard many times over the years that a tax professional knows well some limits for deductions beyond which trigger a problem, the hint being that some things will be padded.  Bitcoin is fairly new but yet it's been around a few years.  The upper limits on transaction fees might be one way a pro could cook up a return that might be better than one can do oneself.  But what the hell.

MtGox is not allowing users to view their trading histories and ongoing balance records.  Figuring tax now makes this very difficult.  My saved webpages of transactions records on MtGox seem obtuse and difficult.

Bitfloor stopped all trading last year.   My records there are clear.  One can still download statements of every month showing all transactions.  Working with those is much easier and those are completely available.  I suspect it was closed because US bitcoin buyers via BOA did panic with the April crash.  Too bad.

Who would have a problem with MtGox allowing its users to view their records?

I found it is an old address of a Bitcoin-qt that I had sent the btc to so as to test how the system worked back then.  When I found it, then did a copy and paste, the address was found by blockchain.info.  So, although I copied the address what I thought was accurately from a print-out of a MtGox page last year, I must have misread a digit or letter.  Did that read and type in twice, both apparently wrong!

Okay, I sent 1btc from MtGox to an address on 2/22/2013.  Not sure what that was about I went to blockchain.info and punched in the address.  The blockchain.info response was "Firstbits not found".

What does this mean?

Edit: It means I didn't enter the address properly. 

Is this taxing twice?  If I pay for a miner with dollars then by the time the miner has earned btc enough to cover its purchase, its daily return will have dropped to a small fraction of what was mined while not having earned back its cost.  But one then needs to pay taxes on that investment.

Example: I bought a zTex 1.15x for $400 arriving in Feb. last year.  It could hash at 228MHs.  I didn't have a 12v power supply that could provide the necessary current but did have a 16v old zenith laptop supply and whipped up a board having a 7812 voltage regular and associated capacitors to drop the voltage and latter bought an LC meter to calibrate a coil I wound for a stepdown switching supply to replace the analog regulator for greater efficiency.  So there was some delay in getting it online and saw a first payout of .05btc on 4/4/2013.  In January this year, looking at my Kill-A-Watt I decided it was no longer paying for itself and retired it.  So, it had a productive 9 months.  Somewhere online there was a calculator that can plot backwards earning and that told me it had earned $400 in its lifetime.  (Note the zTex 1.15 was OOC for the time it took to return to Germany leaving the US on 2/28/2013, have repaired, and returned to me arriving on 4/2/2013, or well more than a month.  Ball Grid Array solder separation failure.)

If I had spent the $400 on btc I would not have to pay tax except on gain after selling or bartering.  But by spending the $400 on the ztex miner and earning back $400 I have to pay tax on that $400?! 

So, hypothetically, If a person can't find work in his field because he's too close to retirement age but has a previous social security disability that can become active and does, so he lives on social security disability instead of SSI (social security payouts for the unemployed with no income) and he is 64 early in 2013 with a dwindling IRA rolled over from a smallish 401k and puts half the IRA into Bitcoin and a quarter into mining equipment, and recalling that social security disability never fully covers the year's bills leaving a few thousand debt every January to be taken out of the now tiny IRA, as a hobby the cost of the mining equipment and of the power to run that equipment is a non-recoverable loss and not deductible in any way, all the 2013 mined bitcoins need to be declared as 2013 income but not as capital gains, the result of which hypothetically causes social security to demand the return of much of the 2013 payouts.  Also the purchased bitcoins are in large part in MtGox.  So, all in all what even with the MtGox debacle could have left this hypothetical person in a moderately better financial position in 2014, instead causes 2013 to be a bust and financial security tenuous, in fact he's almost bankrupt with the prospect the social security disability might stop with the arrival of the 2013 payments demand.  Bitcoin mining for hobbyists even with thousands of dollars mining gear is going to drop to the price of a cup of Starbucks coffee before the end of 2014.   panhandling for bitcoins here.....na

next they'll say any 60+ year old with a treadmill will be moving back his non-penalized retirement age according to the number of miles he runs each year.  No matter, if there's a social security disability debt outstanding they aren't going to pay social security retirement.

So Bitcoins purchased in 2013 can for each individual purchase be calculated for individual purchase basis, then average all those and that year's average be used to calculate taxable profit on bitcoin sales and barter in 2013.  But it's likely mined Bitcoin as a hobby won't need to be reported to the IRS until sold or bartered and then at zero basis except for transaction costs?

I know that I won't be anything but a hobbyist as calling it a business effects how the county looks at my property - they want to know if I'm conducting a business here.  That would bring in all kinds of taxes and insurance requirements.  And this time next year my gear won't be mining the btc cost of a Starbucks coffee daily after power.

The only way mining as a hobby can be seen reasonably is if one is retired and only sells or barters that limited number of btc which will bring one's income up to a taxable level plus enough to make the max contribution to an IRA.  On the other hand if one want's the btc as an investment because fiat devalues so quickly then one would take that difference up to a taxable income amount from one's IRA until it's no longer extant.  

Tree farming down here is business.  But one can call the tree harvesters and have them take trees from the private property upon which one has one's home.  The trees growing on non-tree farm, non-business property are not the IRS concern until sold.  The IRS doesn't want to know how many cumulative pine tree circumference inches are grown the past year or past 10 years.  I think hobbyist bitcoin mining is like pine trees growing on private property.

If the company doesn't find an investor then there's no way to recover the lost btc.  As presently I'm a loser in this, it would be nice to imagine it could be taken out of the fire even if it takes a year.  By that time most of my coins held by him would meet the requirements for long term capital investment assets twice over. (Maybe if we keep repeating loudly enough that the btc can't be recovered some ass will happily post how clever he was getting away with so many bitcoins.)

A small, lean, company not concerned with drawing out work so as to lengthen the duration of a project and associated paychecks, an aspect of manufacturing that's become deep seated and entrenched since so much manufacturing was exported, may show that it isn't as if lightening striking twice but competence.  Working competently in today's environment can put one on the unemployment line.

I was badly hurt with the crash of April 2013 as I had decided to hold my bitcoins and wait it out.  I saw the reverse pump and dump generally devalue bitcoin in the process of transferring wealth to the speculators.  Bitcoin started to come back then started to fall again.  I decided to hedge.  I sold a number of bitcoins.  Pretty quickly the price started to rise again and I was stuck with the fiat so I bought btc ending up with less than I started.  I never kept dollars on MtGox for any real time.

Looking at the US income tax pub 17 that event would be described as a wash sale and not allowed as a loss because of wash sale rules but one might add the disallowed loss to the cost of the new stock or securities (except in an IRA) and the result is the basis for the new stock or security.

Since my purchased bitcoins eventually went into MtGox, I'll have to average my basis for the year.  This seems acceptable especially as the wash sale loss will raise the year's average basis.

What happens if any of my mined bitcoins made their way into my MtGox account?  I mine as a hobby not a business.  I have been assuming that my mined bitcoins are of no concern until I convert them into dollars and I have no plans to do so this year.  But I did barter some mined bitcoins for USB sticks from a non-MtGox account.  How will I calculate the basis for those bitcoins?

Thanks to anyone with correct answers who shares those answers.

Speaking of competition, have any Monarchs yet arrived to customers or even been hashing in Kansas City?

If you start hearing rumors of 'edgar to building 9' he'd best beat feet.

Perhaps for giving a reward for refund rather than recovered you looked soft and Avenger and Edgar jumped at the chance to make you look bad hoping to squeeze btc out of you.  I'm not really following the ins and outs tho so flaming me with long rationalizations not going to help.

Learned a new word.  Rickroll.  First encounter.

Some might argue that honeypots have a way of backfiring.  If one were to suppose the root cause of the JFK assassination was tweaking of US politics by European diplomats and intelligence to punish J Edgar Hoover's attempt to control UN voting by NYC tracking and recording personal failings of UN diplomats, al la Bobby Baker and control of congressional voting so it goes the 'the right way', we'd say that FBI honeypot scheme didn't work out well for the US.

If in the final analysis a honeypot via MtGox was a stupid move like the above possibility, maybe Putin is doing an invasion of Ukraine against best intelligence.

I'd guess he'd want to be tried in the locale/country having the greater percentage of liberals.  Has any legal restraint relating to the bankruptcy been placed on his leaving Japan?

The US tax on earning anywhere in the world is interesting (that from bitcointaxes.info).  If one buys a kilo of pot in Colorado and sells it in Mexico for a profit, one has to pay US tax!

It's a brave new world.

He doesn't want to go to jail.  Toilet paper, not issued individually;  no maid service, unless earlier prisoners have cleaned the wall abutting the cot, it's coated in years of jiz; time to shave, bucket brought in with plastic bic-type razors - not in disinfectant nor bleach and you get one when someone else has finished with it and they ain't a healthy bunch; yard exercise but returning en mass with your tier you pass another tier on its way down the stairs and beatdowns by a succession of prisoners from the other tier on their way past has been known to happen (not actually injurious).  I think the DOJ remands to the local county jail, in this case next door to NCMC rather than a federal prison.  He can be held up to 6 months in the county jail and his right to a speedy trial will not be violated.

I'd suggest arrive to LI on the down low, get admitted into South Oaks Psychiatric Hospital (delicious egg creams there), then be escorted to and from the federal court and hope the hospitalization time counts toward time served.  It would have to be an involuntary admission of course.

Interestingly it appears that the LI courts are not required to accept a not guilty plea nor a nolo contendere even when expressed as "I'm pleading no contest."