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bekin
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September 01, 2017, 12:16:17 AM
 #1

First off let me start by saying this is not meant to be a topic about if you should or should not pay taxes on bitcoin.  I run a software company and in the last 6 months have started mining bitcoin. I have to do everything on the up and up. 

I have a decent size investment in my machines and I am doing everything in accordance to how my accountant wants me to record the taxable transactions. I was surprised that there does not seem to be any software or add-ons to other ERPs that try and address the taxable events for mining... or I just can't find them.

Is anyone using any software that tracks mining payouts and automatically records those transactions in an accounting system?

Thanks,
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September 01, 2017, 01:37:27 AM
 #2

I do not see how holding bitcoin could be considered holding anything different than shares of stock or a foreign currency depending on how you look at it. Then again, I only know the basics of accounting and accounting software, but shouldn't there be an option to add miscellaneous assets to your unified assets list and then list it with its proper value either according to fair market value or historical cost value? It would in the end depend on what guidelines you are sticking to when it comes to changing capital assets, but it should be fine as long as your are consistent with how you are recording your bitcoin transactions and holdings (if any).

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September 02, 2017, 02:54:04 AM
 #3

Yes you are correct it is an asset however for mining the IRS says that when you mine you are gaining something that has immediate value because you are running a service to generate that asset. So you need to record the value of the coin at the time e of the transaction to account for the taxes properly.  I can't find any software that does that.
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September 02, 2017, 10:20:53 AM
 #4

For now, the "easiest" way is record all your income carefully and calculate them in the current price when you get it. And i've never seen software that can do this hard thing Roll Eyes
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September 11, 2017, 10:58:17 AM
 #5

For now, the "easiest" way is record all your income carefully and calculate them in the current price when you get it. And i've never seen software that can do this hard thing Roll Eyes
Yes I also agree with this that there is no software in this day to calculate something virtual, but may be possible in the coming future. That would be so amazing. But now you will have to calculate your bitcoin price by the time of transaction and the current value of the bitcoin.

So I think we will have to wait for this kind of software, because up to date we don’t have any. Just look at the software developers.

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September 11, 2017, 11:20:58 AM
 #6

On the face of it, I don't think the software would have to be that complex, it would just need to link into a dynamic conversion tracker, it could then directly write into say Sage as I believe they still run on Access databases so should be nice and easy. Having said that, I haven't seen any software doing this.

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September 11, 2017, 12:36:12 PM
 #7

I think it is not necessary, the moment you are earning profits is only when you sell coins for fiat. You need only that final price and the bills of your mining costs.

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September 11, 2017, 02:33:02 PM
 #8

For now, the "easiest" way is record all your income carefully and calculate them in the current price when you get it. And i've never seen software that can do this hard thing Roll Eyes
Yes I also agree with this that there is no software in this day to calculate something virtual, but may be possible in the coming future. That would be so amazing. But now you will have to calculate your bitcoin price by the time of transaction and the current value of the bitcoin.

So I think we will have to wait for this kind of software, because up to date we don’t have any. Just look at the software developers.
Each software is working to alleviate the human workload, every time we have been assisted with the software.
This can be a good idea...


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September 11, 2017, 03:10:25 PM
 #9

I think it is not necessary, the moment you are earning profits is only when you sell coins for fiat. You need only that final price and the bills of your mining costs.
If they can’t find the money then they can’t say that you have to pay for something that isn’t there. I mean it’s a nice habit to give them some money for using the governments fiat, it is also not worth it if money isn’t transferred from an online wallet to a Bank account.

Doing taxes on how many Bitcoins that you have even if you don’t sell any is something that I wouldn’t do, they have no real purpose in doing that. There should be people trying to get rid of that system they have, they are just trying to market Bitcoin slowly.

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September 11, 2017, 05:40:25 PM
 #10

I think it is not necessary, the moment you are earning profits is only when you sell coins for fiat. You need only that final price and the bills of your mining costs.

Actually, whether and how Bitcoin is taxed (or not) depends on how you are classifying it in your accounting system. If you classify it as an asset or capital, it might not have to pay taxes until you actually convert them into a  fiat currency, at which point they would be considered capital gains. Otherwise, if you account for it as a currency, you would have to pay taxes like you would with any other currency. If you pay sales tax for items you sell in fiat, for example, you would have to do the same for a transaction done with Bitcoin if you consider it a currency for accounting purposes. There is more than one way to do it, and I would be surprised to find out that there aren't many more than the ones I described, as I am not an accountant myself but have done basic accounting in the past.

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September 22, 2017, 11:10:47 AM
 #11

For now, the "easiest" way is record all your income carefully and calculate them in the current price when you get it. And i've never seen software that can do this hard thing Roll Eyes
Yes I also agree with this that there is no software in this day to calculate something virtual, but may be possible in the coming future. That would be so amazing. But now you will have to calculate your bitcoin price by the time of transaction and the current value of the bitcoin.

So I think we will have to wait for this kind of software, because up to date we don’t have any. Just look at the software developers.
This type of software is not a critical or very complex one like those needed by NASA. It can be created by any junior developer even. The requirements are not a very tough one. There are simple calculations. Simple form of input data, some mathematical functions and that's all. If someone wants it, he can post it on freelancer's websites.

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September 24, 2017, 01:27:09 AM
 #12

For now, the "easiest" way is record all your income carefully and calculate them in the current price when you get it. And i've never seen software that can do this hard thing
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September 24, 2017, 04:01:40 AM
 #13

For now, the "easiest" way is record all your income carefully and calculate them in the current price when you get it. And i've never seen software that can do this hard thing Roll Eyes
Yes I also agree with this that there is no software in this day to calculate something virtual, but may be possible in the coming future. That would be so amazing. But now you will have to calculate your bitcoin price by the time of transaction and the current value of the bitcoin.

So I think we will have to wait for this kind of software, because up to date we don’t have any. Just look at the software developers.
This type of software is not a critical or very complex one like those needed by NASA. It can be created by any junior developer even. The requirements are not a very tough one. There are simple calculations. Simple form of input data, some mathematical functions and that's all. If someone wants it, he can post it on freelancer's websites.

I agree, and it is also no math that could not be simply added to an already existing accounting software. Even plugins or add-ons for existing software would do the job just fine and the development time would be minimal. You could probably already classify Bitcoin as one of the pre-existing asset types in most major software, however.

For now, the "easiest" way is record all your income carefully and calculate them in the current price when you get it. And i've never seen software that can do this hard thing

I have no idea what you are talking about. You literally just described regular accounting software. It is no rocket science and already exists. You follow historical cost if you need to, which is already a feature essential to any decent accounting software. You clearly have never seen any before.

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