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Author Topic: Legality of Mining Bitcoins  (Read 3704 times)
tsimonq2
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July 08, 2015, 03:38:03 PM
 #1

I have a couple of questions.

Can you mine bitcoins if you are under 18 years of age?

I am located in Wisconsin, USA. I am under 18 years of age. If I earn bitcoins, do I have to pay any sort of tax? Isn't there some sort of threshold that if I pass it, I have to pay the tax?

And, can you calculate the amount of bitcoins you will earn by your hashing rate?

I want to know this before I start mining to see if I should be mining.  Grin
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nonbody
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July 08, 2015, 04:21:03 PM
 #2

you can mine regardless of your age, the only legal perimeters of mining are those for hardware and electricity. your pc wont make anything mining btc, i suggest using your pc to mine something else Smiley like and x11 coin, i sent you a pm   
spazzdla
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July 08, 2015, 05:22:39 PM
 #3

Pretty sure you are 100% okay until you sell it for $$$.
jonnybravo0311
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July 08, 2015, 10:32:51 PM
 #4

I have a couple of questions.

Can you mine bitcoins if you are under 18 years of age?

I am located in Wisconsin, USA. I am under 18 years of age. If I earn bitcoins, do I have to pay any sort of tax? Isn't there some sort of threshold that if I pass it, I have to pay the tax?

And, can you calculate the amount of bitcoins you will earn by your hashing rate?

I want to know this before I start mining to see if I should be mining.  Grin
There are no age restrictions to mining.  Of course, being under 18, you'll face other challenges - how to pay for the mining hardware for example.  I would refer you here: https://en.bitcoin.it/wiki/Tax_compliance for tax implications.

You can most certainly calculate your expected mining returns based upon a hash rate.  Many online calculators do exactly that.  For example, check out https://bitcoinwisdom.com/bitcoin/difficulty to get an idea of how much you would expect to earn with a given hash rate at the current moment.  An Antminer S5 as of right now would expect to earn you 0.01176BTC a day.

Jonny's Pool - Mine with us and help us grow!  Support a pool that supports Bitcoin, not a hardware manufacturer's pockets!  No SPV cheats.  No empty blocks.
djroadking
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July 09, 2015, 02:45:39 AM
 #5

I guess while on the subject... So the next time I have to go through and do taxes that lets say I sold all of my bitcoins on an exchange... Say they brought me in right at $300 for an example... Then I'd have to let them know that I made $300 USD from trading bitcoins and they'd tax that as self employment income? Just to be clear...

<a href="http://moonbit.co.in/?ref=c5f9adca1f79">MoonBit - The Bitcoin Faucet When You Decide When To Claim</a>
Amph
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July 09, 2015, 08:11:10 AM
 #6

I guess while on the subject... So the next time I have to go through and do taxes that lets say I sold all of my bitcoins on an exchange... Say they brought me in right at $300 for an example... Then I'd have to let them know that I made $300 USD from trading bitcoins and they'd tax that as self employment income? Just to be clear...

it depend on where you live, because in somearea in the world, there is no tax and regualtion about bitcoin, for USA IRS said that they will tax everything above 600 for btc, in the arch of one year

so if you exchange only 300 worth of bitcoin for an entire year, you're safe
okae
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July 09, 2015, 11:23:47 AM
 #7

I have a couple of questions.

Can you mine bitcoins if you are under 18 years of age?

ofc you can there is nothing agains it.

I am located in Wisconsin, USA. I am under 18 years of age. If I earn bitcoins, do I have to pay any sort of tax? Isn't there some sort of threshold that if I pass it, I have to pay the tax?

fiat money is control by goverment yes? so in the end you need to be under his rules, you should check if the fiat money you get after you change yout btc for fiat money excesss the limits of your country.

And, can you calculate the amount of bitcoins you will earn by your hashing rate?

I want to know this before I start mining to see if I should be mining.  Grin

imho you should not start to minning btc, the electricity cost are so high atm, dunno if this is the same case with your, but for some of us this is not profitable anymore.
Argwai96
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July 09, 2015, 02:25:04 PM
 #8

I dont think mining at this point of the difficulty would be a good idea unless your doing a bitcoin farm with special deals from the bitcoin miner manufactures, you could always go around the house pick up the old stuff your not using and sell it in a yard sale, or either offer a service in a skill your good at for bitcoin.
djroadking
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July 09, 2015, 07:24:21 PM
 #9

I'm in Kentucky... And as far as taxes go for the state they've addressed it for business use.
http://www.taxrates.com/blog/2014/07/02/bitcoin-bluegrass-state/

However the amount of bitcoin I have (barely over $50 worth atm) has been mined. I'm not a business by any means so if I mined enough to where it was $600 worth and sold it then taxes would be applied. Correct me if I'm wrong...

And to be sure... Mining is ok until bitcoins are sold correct?

<a href="http://moonbit.co.in/?ref=c5f9adca1f79">MoonBit - The Bitcoin Faucet When You Decide When To Claim</a>
cozk
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July 09, 2015, 11:07:28 PM
 #10

The bitcoin police will hunt you. YOU GOIN DOWN


 Cheesy
notlist3d
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July 10, 2015, 05:08:58 AM
 #11

I'm in Kentucky... And as far as taxes go for the state they've addressed it for business use.
http://www.taxrates.com/blog/2014/07/02/bitcoin-bluegrass-state/

However the amount of bitcoin I have (barely over $50 worth atm) has been mined. I'm not a business by any means so if I mined enough to where it was $600 worth and sold it then taxes would be applied. Correct me if I'm wrong...

And to be sure... Mining is ok until bitcoins are sold correct?


Honestly if you sold a large amount and made a large profit see and accountant.   I don't see you making this but if you did, a CPA in your area is better then any forum advice.

Holding bitcoin you really don't make a profit until you sell.  At point of sale I could see both sides.    I personally have kept my costs as I mine my BTC just incase of taxes one day down the road. Bitcoin is really pretty new still.   
minkmink999
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July 11, 2015, 10:39:43 AM
 #12

good idea   Smiley Smiley Smiley


คาสิโนออนไลน์ ในรูปแบบใหม่ล่าสุดจาก ปอยเปต คาสิโน รีสอร์ท ได้ที่นี่ royal1688
minkmink999
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July 11, 2015, 02:16:40 PM
 #13

 Smiley

yes

คาสิโนออนไลน์ ในรูปแบบใหม่ล่าสุดจาก ปอยเปต คาสิโน รีสอร์ท ได้ที่นี่ royal1688
innerchaos
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July 15, 2015, 04:34:21 AM
 #14

In the USA if you mine bitcoin regardless of age, You are responsible for taxes.
The way it is valued is....  the minute the bitcoin is mined either solo or paid out in the case of a pool, That is the point that you created value..

if you were to mine 25 bitcoin today your earned income is $7250.00 dollars ... if you quit mining after today at the end of the year you would have to claim that 7250 as earned income...

If you mined 25 bitcoin today and the next day bitcoin price plummeted to 1 cent per bitcoin.  at the end of the year you would still have to claim the entire 7250.00 as earned income.. it is not the governments fault your bitcoin lost value.

here is the really shitty part.

if the value of those bitcoin rise to 1000 dollars each overnight. You do have to pay capital gains when you sell them. so if you sold them the next day for 1000 each, you would have the original 7250 earned income and another 17,750.00 in capital gains... to claim at the end of the year.



I keep a spreadsheet and attempt to keep every single payment and its exact value at the moment it was produced so I can claim it at the end of the year as earned income.
the amount that I actually earn is small and I have no doubt that I can probably get away with not claiming anything.. but I don't want to take that chance. So I attempt to keep good records. and do the right thing
notlist3d
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July 15, 2015, 04:38:49 AM
 #15

In the USA if you mine bitcoin regardless of age, You are responsible for taxes.
The way it is valued is....  the minute the bitcoin is mined either solo or paid out in the case of a pool, That is the point that you created value..

I would see a CPA honestly if you are talking about big numbers.  There are many different types of investments it's not one size fits all.

For example if you mine your forgetting you have expenses, or buying you have buying expense.  It's not all profit.   

I would also argue it's not value created until you sell it and make fiat money.  With BTC going up and down in price it's pretty much impossible to know how much you will make.  If you sell all and do not keep BTC yes it would be easy.   But if you keep BTC the value changes day by day.

So.... get a CPA.
Amph
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July 15, 2015, 06:35:33 AM
 #16

In the USA if you mine bitcoin regardless of age, You are responsible for taxes.
The way it is valued is....  the minute the bitcoin is mined either solo or paid out in the case of a pool, That is the point that you created value..

if you were to mine 25 bitcoin today your earned income is $7250.00 dollars ... if you quit mining after today at the end of the year you would have to claim that 7250 as earned income...

If you mined 25 bitcoin today and the next day bitcoin price plummeted to 1 cent per bitcoin.  at the end of the year you would still have to claim the entire 7250.00 as earned income.. it is not the governments fault your bitcoin lost value.

here is the really shitty part.

if the value of those bitcoin rise to 1000 dollars each overnight. You do have to pay capital gains when you sell them. so if you sold them the next day for 1000 each, you would have the original 7250 earned income and another 17,750.00 in capital gains... to claim at the end of the year.



I keep a spreadsheet and attempt to keep every single payment and its exact value at the moment it was produced so I can claim it at the end of the year as earned income.
the amount that I actually earn is small and I have no doubt that I can probably get away with not claiming anything.. but I don't want to take that chance. So I attempt to keep good records. and do the right thing

are you sure about that? it does not make sense, they can't tax you in that case you are a net loss, unless you managed to use you bitcoin before the price tanked

if you can prove that you never bought anything with them i'm sure you are not taxable
innerchaos
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July 15, 2015, 11:23:38 AM
 #17

when you are talking about stock of a company you are buying and selling something that the company created for a set value.

this type of commodity can sit in your ownership and raise in value and you are not taxed until you sell it.


when you are talking about bitcoin it does not exist until you create it. Also it is not a commodity it is actually a currency. That is why the moment it is created it gets taxed at its value during the moment of creation.
Xialla
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July 15, 2015, 11:41:38 AM
 #18

In the USA if you mine bitcoin regardless of age, You are responsible for taxes.
The way it is valued is....  the minute the bitcoin is mined either solo or paid out in the case of a pool, That is the point that you created value..

sorry, but are you 100% sure, that it is working like this? When you are mining bitcoin, you are just "calculating some complex mathematical equations" and because of this, you are receiving another computer code, so called bitcoin.

I understands, that you should pay taxes, once you will sell those bitcoins on market (even I don't agreed on it), but why you should pay taxes for mining? Maybe it depends on country, but I really don't think, that taxes are applicable in this case.
notlist3d
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July 15, 2015, 02:15:11 PM
 #19

when you are talking about stock of a company you are buying and selling something that the company created for a set value.

this type of commodity can sit in your ownership and raise in value and you are not taxed until you sell it.


when you are talking about bitcoin it does not exist until you create it. Also it is not a commodity it is actually a currency. That is why the moment it is created it gets taxed at its value during the moment of creation.

What degrees or certifications do you have for accounting?

I find it flawed to say you make money on a investment that is constantly changing.  You need to sell to turn BTC into profit, there is no way to know value until time of sale.   

Also you did completely miss how if you mine or bought that is not a gain with that part.  So it would be taken out when sold as it's not a gain.   

Again see a CPA do not get your tax advice from a forum.
innerchaos
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July 16, 2015, 01:18:56 AM
 #20

Yes I am 100% sure


IRS.gov

snippet from irs website

Q–5: How is the fair market value of virtual currency determined?

A–5: 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–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.
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