Paying TAX

[777Bitcoin]

In our country doesn't have a law regarding taxation on bitcoin. Maybe depends on the state or country because other country already legalized bitcoin. And our country is not one of them but we're open in transactions even in days.

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[botany]

I highly recommend against filing capitol gains tax. For what reason is it wise to inject crypto mining with the state? They shouldn't be allowed in it, but if everyone lets them in then they'll think it's all ok until a Supreme Court case goes to show they have no right (it's only a matter of time).

Filing capital gains may protect you from future prosecution, for hiding your income. The state may be evil, but we all have to play by the current rules or be ready to face the consequences.

[Granxis]

In our country doesn't have a law regarding taxation on bitcoin. Maybe depends on the state or country because other country already legalized bitcoin. And our country is not one of them but we're open in transactions even in days.

In fact, there is no problem for some tax-free countries, but it will certainly be a problem for some countries that charge a hefty sum of money. As a result, million dollars can be transferred from country to country without any registration.

[hohemhein2583]

People work hard and earn money which ideally they would like to retain for themselves. However, a significant portion of this usually has to be given to the state. In my view, it is right that people pay their fair share of taxes.

Money is everything in today’s livelihoods. This is because money is used to buy all the necessities such as food, water, and shelter. Money is also used to help a family’s children in the form of school fees and other activities. In addition to this, people do not only need money to cater for their necessities, but also for future investments. The more that people have to invest, the more they believe they can accumulate in the long term. As a result, many are reluctant to lose some of their income through the deduction of tax.

Nevertheless, citizens should be obliged to pay taxes to the government for a number of reasons. They should accept that the taxes they pay help the government offer them the public services all over the country. These public services are things such as the construction of roads, bridges, public hospitals, parks and other public services. The same tax money helps the country’s economy to be stable. Through taxes, the government can pay off its debts. In short, tax money is a way of ensuring that people have comfortable livelihoods.

In conclusion, even though many people think that they should not pay taxes, that money is useful to the stability of any country. Therefore, people should not avoid paying taxes as it may affect the country’s economy and services that it provides.

[BurtW]

no law in any country exist on bitcoin mining tax......    

Bullshit.  In the US any Bitcoins you receive from mining are considered ordinary income.  So your statement is totally false.

To clear this discussion up, we need someone to chime in who has gone through the rigamarole of doing taxes on  Cryptomining.
Paying the taxes on bitcoin you mined on XYZ date makes no sense whatsoever.

I have paid all the taxes required on my Bitcoin mining and Bitcoin trading.  For mining you must claim the value of the Bitcoins you mined on the day you mined them.  The way I did this was to use the average price on that day as the value.  So if I mined 1 Bitcoin on a day when the average value was $10 then I have $10 in ordinary income on that day.  You do this for all Bitcoins mined and the sum is the amount of income you have and then you calculate your tax from there.  Of course you can deduct the cost of the mining equipment, electricity, etc. since you are running a mining "business".  So if the amount you spent making your coins exceeds the amount they were worth you have a loss and this loss can be taken against your income.

Say for instance, you mined a 1 Altcoin on 7/11/16  at a price of $500 .  A month later the price of the altcoin crashes to   $15 dollars amd doesnt recover for the  foreseeable future. The value of the alt-coin is only realized once the altcoin is converted to  Fiat or used to purchase a good. Technically the Alt-coin is a useless abstract currency until this occurs.

Nope.  On the day you mined the coin you had $500 dollars in ordinary income.  This $500 is also the cost basis for the coin.  If you sell it for $15 one year later you have a long term capital loss of $500 - $15 = $485 and you can deduct this long term loss against all your other long term gains.  If you hold it for less than a year then you have a short term capital loss of $485 and you can deduct this loss against your other short term gains.

So the IRS expects us to pay the taxes on a mined alt-coin, before we ever realize its true worth?  This makes no sense, but, if that is the case, then miners should immediately cash  out whatever they earned, then re-convert whatever fiat  they want to re-invest in the particular coin. This would make it much easier for the miner to organize their particular taxes.

Yes, the ordinary income from mining happens on the day you mine it.  If you don't have a lot you can wait till the end of the year and report all your income from mining on your form and pay the tax at that time.  However, if you are making a LOT of profit (income minus all your expenses) then you will have to make estimated payments throughout the year or face a penalty for not paying your taxes on time.

A friend of a friend recently purchased multiple  Asic miners and   he told me hes going to mine, hold, and whenever he cashes out present the earnings as capital gains. He will  put down the value of the equipment used in column E on his  Schedule D 1040 form.  I view this all as straight capital gains.  I feel thats the best thing for us miners to do, even if the  IRS balks, your not going to  jail and maybe have to pay a small fine due to the fact that this is a new field, for us and for the IRS.

The amount you make from mining is ordinary income, not capital gains.  You can deduct the cost of equipment, electricity, etc. against your ordinary income.  All of this needs to be done on a schedule C - not E.

If, after mining the coins and correctly reporting their value on the day you mine them and determining the cost basis for the coins, you sell them then you have a capital gain or loss and the capital gain or loss is reported on schedule E.

Another thing that may work is, mine, hold, and hope that  your countries economy becomes like Japans, in Japan you can use Bitcoin  as a taxless currency  for goods, rent, property, cars and food.   I foresee this happening after the price  of a bitcoin starts to stabilize around 100K, which should occur toward the middle of the 2020's

     Using Bitcoin in Japan: https://youtu.be/xrauYRGDCjY

Dream on.

[monocolor]

If I bought some BTCs many years ago, I will need to report only at the time when I sell, right? I am in US.

If you are being taxed then pay that taxes with your rabbitcoins 

Well I am not being taxed, as IRS does not records when I bought it at MtGox, lol.

[BurtW]

If I bought some BTCs many years ago, I will need to report only at the time when I sell, right? I am in US.

If you are being taxed then pay that taxes with your rabbitcoins  

Well I am not being taxed paying my taxes, as IRS does not records when I bought it at MtGox, lol until I am audited, the IRS finds my unreported income, charges me interest and penalties, garnishes my wages and makes my life a total hell.

FIFY

[Blocken]

I highly recommend against filing capitol gains tax. For what reason is it wise to inject crypto mining with the state? They shouldn't be allowed in it, but if everyone lets them in then they'll think it's all ok until a Supreme Court case goes to show they have no right (it's only a matter of time).

Filing capital gains may protect you from future prosecution, for hiding your income. The state may be evil, but we all have to play by the current rules or be ready to face the consequences.

Uh... so you paid more taxes on actual income, and you expect them to come down on you for not paying less tax through capital gain tax? 

[botany]

I highly recommend against filing capitol gains tax. For what reason is it wise to inject crypto mining with the state? They shouldn't be allowed in it, but if everyone lets them in then they'll think it's all ok until a Supreme Court case goes to show they have no right (it's only a matter of time).

Filing capital gains may protect you from future prosecution, for hiding your income. The state may be evil, but we all have to play by the current rules or be ready to face the consequences.

Uh... so you paid more taxes on actual income, and you expect them to come down on you for not paying less tax through capital gain tax? 

More taxes on actual income? No - You pay the taxes which are due. Whether they are based on income or capital gains.
The state may still come after you unfairly, but at least you have done what is expected.

[bdog1234]

I will admit I am new to this and don't 100% understand all the technology and I am not advocating anything illegal but is there anyway possible for anyone to know what you mined until you actually do something with the coins? The miner doesn't require anything but an address and those can be created anonymously right?

Obviously at some point down the road when you decide to spend or exchange them you might have to explain where you got them but I don't see how it could be tracked prior to that.

Is the actual person doing the mining responsible for the mining or is it the one who controls the address that receives the fruits of the labor? What if I set up a miner here at my house in the US and pointed it to my sons address who lives in another country?

If someone has an actual farm of multiple miners I see it as a legit business and everything should be accounted for. The guy at home running nicehash on his gaming pc and turning around and using all profits to buy more games on steam not so much.

The law is the law but how many people report the income they make on a garage sale or when they bet their buddy $100 on the Super Bowl.

A huge problem I see in reporting profits and losses on small home based mining is electricity which is your biggest ongoing expense. How can you accurately differentiate how much of your electric bill is general home use and how much is due to mining. Sure you can estimate but will that hold up in an audit?

[fjtropepe]

Interesting read:

http://www.businessinsider.com/how-paying-taxes-on-bitcoin-works

I would highly recommend consulting your tax accountant.

[Ava92]

Well this is fastest transaction system as well but yet there is no law exist in any country on bitcoin mining and might be possible sooner tax will implement on this business because big organization jumping in this arena and many country think about very seriously...

[Bruno77]

Guys, shoud I pay any taxes mining in Russia? Does somebody know?

[mharz]

A friend of a friend recently purchased multiple  Asic miners and   he told me hes going to mine, hold, and whenever he cashes out present the earnings as capital gains. He will  put down the value of the equipment used in column E on his  Schedule D 1040 form.  I view this all as straight capital gains.  I feel thats the best thing for us miners to do, even if the  IRS balks, your not going to  jail and maybe have to pay a small fine due to the fact that this is a new field, for us and for the IRS.

Another thing that may work is, mine, hold, and hope that  your countries economy becomes like Japans, in Japan you can use Bitcoin  as a taxless currency  for goods, rent, property, cars and food.   I foresee this happening after the price  of a bitcoin starts to stabilize around 100K, which should occur toward the middle of the 2020's

     Using Bitcoin in Japan: https://youtu.be/xrauYRGDCjY

During a discussion about trying to have favorable tax situations with cryptos a friend once said, "Don't do it, that's like inviting the Devil into your home, there's no good reason to do it if it's not already happening"

I highly recommend against filing capitol gains tax. For what reason is it wise to inject crypto mining with the state? They shouldn't be allowed in it, but if everyone lets them in then they'll think it's all ok until a Supreme Court case goes to show they have no right (it's only a matter of time).

Definitely that is true, because if we are payed taxes in our income in crypto currency only government who become win. Why? Because their fund was increasing without doing anything, they were collect and collect taxes for nothing. In my experience only government officials will become reach because they were abused their power and corrupt the money of many people.

In addition it's better if we used our income to improve our lifestyle in each country, also most of us are wants to become close to the rich people. So it's better if save our income in bitcoin for our own future.

[bitcoinvamp]

Hey guys Tell me are there people here who declare regarding there mining profit?
I understand that you " need " to pay tax for the profit from mining
can anyone answer or someone who know something regarding this subject?

Thanks

I think this all depends on the country in which you live and also on the money you earn from mining . If the income is less than there will be no problem . Every country has different rules regarding the tax payment and you have to follow accordingly . There may be different followups due to legality of the bitcoin in the particular country.

[Slyah]

question: (my gains are negligible comparatively speaking since I just began)- if I don't move crypto into USD am I still required to report gains made during trades?

[bnm123]

The short answer is yes, you need to, but currently it is difficult to enforce. However, there may be some changes to this in the future. This paper explains some of the issues that may help guide your decision: https://scholarship.law.duke.edu/dltr/vol16/iss1/1/.

[LFdollarss]

question: (my gains are negligible comparatively speaking since I just began)- if I don't move crypto into USD am I still required to report gains made during trades?

I'd say no.

[mengpujiu93388]

If there is no government regulation in our country so far, it refers to the tax on the ownership or income derived from the transaction of mining or investment from the bitcoin business.

[dokie987]

Hey guys Tell me are there people here who declare regarding there mining profit?
I understand that you " need " to pay tax for the profit from mining
can anyone answer or someone who know something regarding this subject?

Thanks

There are some thread that miners declare their profit but i don't think that we need to pay taxes for the mining profit.