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Author Topic: Taxes Mining Bitcoins  (Read 1945 times)
manuelcc
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October 24, 2017, 05:52:32 PM
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Somebody can help me about the taxes mining Bitcoins in Canada and USA. Taxes to import the hardware, income tax,  etc.
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October 24, 2017, 11:10:43 PM
 #2

Can't speak to Canada.

 In the USA, IRS rulings are that Bitcoin mined does not become taxable 'till you either sell it for cash or spend it on "tangible property" at which point it becomes taxable at the cash value of the amount of Bitcoin you spent.

 There's a lot more verbage involved, but that's the short-form basic information you need.

 I suspect state and local income taxes (where applicable) have to follow the IRS rulings on the subject.

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October 25, 2017, 04:05:48 AM
 #3

Quint can you cite this ruling?

The last position I saw the IRS taking was that you were required to recognize mined bitcoin as income when it was generated and then take a capital gain / loss when selling.
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October 25, 2017, 04:08:10 AM
 #4

Im glad to live in Canada because our retarded Justin Trudeau doesnt even know what is bitcoin and we have not, or few, laws concerning cryptocurrencies.

Plus, canada has.cheap electricity. Thats why im trading and investing all my profiits into mining.

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October 25, 2017, 06:14:43 AM
 #5

Quint can you cite this ruling?

The last position I saw the IRS taking was that you were required to recognize mined bitcoin as income when it was generated and then take a capital gain / loss when selling.
https://en.bitcoin.it/wiki/Tax_compliance#U.S.
"The IRS also clarified that mining is treated as immediate income at the fair or market value of those mined coins on their date of receipt."

But as the page mentions below, how is the value of Altcoins supposed to be determined when there aren't direct alt/FIAT pairs in exchanges?
This whole IRS & mining seems like a grey area to me. Just pay your capital gains taxes when converting to USD.

   
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October 25, 2017, 06:55:21 AM
 #6

От куда вообще берутся биткоины?
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October 25, 2017, 07:31:33 AM
 #7

Im glad to live in Canada because our retarded Justin Trudeau doesnt even know what is bitcoin and we have not, or few, laws concerning cryptocurrencies.

Plus, canada has.cheap electricity. Thats why im trading and investing all my profiits into mining.

Trudeau knows how Quantum Computing works at a basic level, I'm pretty sure he's aware of bitcoin.  Chances are he supports it and doesn't want to try and shut it down like those on the right would like to do.
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October 25, 2017, 08:41:30 AM
 #8

Somebody can help me about the taxes mining Bitcoins in Canada and USA. Taxes to import the hardware, income tax,  etc.


There is local taxes only for using bitcoins and there is no information that IRS regulated taxes on bitcoin mining separately. We don't need to pay anything apart from that. US government treated bitcoin and other digital currency as a property for US federal tax purposes bro.
Adam Bergman is a tax partner with IRA Financial Group and president of IRA Financial Trust Company. Contact them more information.


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October 25, 2017, 12:47:44 PM
 #9

Somebody can help me about the taxes mining Bitcoins in Canada and USA. Taxes to import the hardware, income tax,  etc.


There is local taxes only for using bitcoins and there is no information that IRS regulated taxes on bitcoin mining separately. We don't need to pay anything apart from that. US government treated bitcoin and other digital currency as a property for US federal tax purposes bro.
Adam Bergman is a tax partner with IRA Financial Group and president of IRA Financial Trust Company. Contact them more information.



There is no taxation on bitcoin only the transaction costs.The bitcoin mining is fully anonymous no government can intrude here,you don't need to worry about taxes.The hardware needed for mining is just powerful system so yiu just have to pay the costs for transportation.Maybe in future there might be taxes on bitcoin if someone regulate it.
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October 25, 2017, 01:02:33 PM
 #10

Can't speak to Canada.

 In the USA, IRS rulings are that Bitcoin mined does not become taxable 'till you either sell it for cash or spend it on "tangible property" at which point it becomes taxable at the cash value of the amount of Bitcoin you spent.

 There's a lot more verbage involved, but that's the short-form basic information you need.

 I suspect state and local income taxes (where applicable) have to follow the IRS rulings on the subject.



This in a nutshell .
There is no taxation on bitcoin only the transaction costs.The bitcoin mining is fully anonymous no government can intrude here,you don't need to worry about taxes.The hardware needed for mining is just powerful system so yiu just have to pay the costs for transportation.Maybe in future there might be taxes on bitcoin if someone regulate it.
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October 25, 2017, 01:53:55 PM
 #11

Can't speak to Canada.

 In the USA, IRS rulings are that Bitcoin mined does not become taxable 'till you either sell it for cash or spend it on "tangible property" at which point it becomes taxable at the cash value of the amount of Bitcoin you spent.

 There's a lot more verbage involved, but that's the short-form basic information you need.

 I suspect state and local income taxes (where applicable) have to follow the IRS rulings on the subject.



in my country also not taxed in mined bitcoin, which I know mined bitcoin indeed there is no taxation regulation about it. but we will be charged when selling the bitcoin.

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October 25, 2017, 07:41:20 PM
 #12

Quint can you cite this ruling?

The last position I saw the IRS taking was that you were required to recognize mined bitcoin as income when it was generated and then take a capital gain / loss when selling.
https://en.bitcoin.it/wiki/Tax_compliance#U.S.
"The IRS also clarified that mining is treated as immediate income at the fair or market value of those mined coins on their date of receipt."

But as the page mentions below, how is the value of Altcoins supposed to be determined when there aren't direct alt/FIAT pairs in exchanges?
This whole IRS & mining seems like a grey area to me. Just pay your capital gains taxes when converting to USD.

 They seem to have radically changed their position since the last I saw.
 This ruling makes dealing with mining income a NIGHTMARE - how the heck do you know which date you "mined those coins" on and WHICH price during that date are you supposed to use?

 I know that the IRS is a bureaucracy and loves their paperwork, but this is INSANE even by their standards.

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October 25, 2017, 11:43:36 PM
 #13

Im glad to live in Canada because our retarded Justin Trudeau doesnt even know what is bitcoin and we have not, or few, laws concerning cryptocurrencies.

Plus, canada has.cheap electricity. Thats why im trading and investing all my profiits into mining.
It is the good luck of yours that you are living in Canada where the electricity is so cheap and I think mining will more profitable in your country as compare to other countries so keep you job continue to get more and more profit from it .
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October 26, 2017, 12:51:49 AM
 #14

Quint can you cite this ruling?

The last position I saw the IRS taking was that you were required to recognize mined bitcoin as income when it was generated and then take a capital gain / loss when selling.
https://en.bitcoin.it/wiki/Tax_compliance#U.S.
"The IRS also clarified that mining is treated as immediate income at the fair or market value of those mined coins on their date of receipt."

But as the page mentions below, how is the value of Altcoins supposed to be determined when there aren't direct alt/FIAT pairs in exchanges?
This whole IRS & mining seems like a grey area to me. Just pay your capital gains taxes when converting to USD.

 They seem to have radically changed their position since the last I saw.
 This ruling makes dealing with mining income a NIGHTMARE - how the heck do you know which date you "mined those coins" on and WHICH price during that date are you supposed to use?

 I know that the IRS is a bureaucracy and loves their paperwork, but this is INSANE even by their standards.



Yes it is, and it exposes you to paying taxes on earnings that no longer exist if bitcoin goes down. 

Judging by the recent lawsuits against Coinbase, it seems that the IRS is very interested in auditing bitcoin miners.  I would get your numbers in order...
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October 27, 2017, 02:59:52 AM
 #15

https://www.irs.gov/newsroom/irs-virtual-currency-guidance
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October 28, 2017, 01:08:11 AM
 #16

I am keeping the transaction emails from coinbase when mining deposits hit my account and using that as the cost basis for each mining payment.    Not perfect but it will work.

My understanding is that since the process is a bit immature, the IRS is using some discretion with how people calculate their cost basis / fair market value, but they'll expect you to be consistent.  I.e. if you cant cherry pick exchange rates from different exchanges or times to help you setup a better cost basis. My advice would be to start a very thorough spreadsheet to track your income if you plan on making more than a grand per year.



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October 29, 2017, 04:33:34 AM
 #17

As a Canadian living in Ontario, I have been mining bitcoins and altcoins for some time and do not pay taxes on the bitcoin that I mined. But that's mainly because I don't sell.
However, from what I heard, if you are a business and accept bitcoin, you have to report it. If you mined bitcoin and sold it, it counts as capital gain.

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October 30, 2017, 12:49:08 PM
 #18

Can't speak to Canada.

 In the USA, IRS rulings are that Bitcoin mined does not become taxable 'till you either sell it for cash or spend it on "tangible property" at which point it becomes taxable at the cash value of the amount of Bitcoin you spent.

 There's a lot more verbage involved, but that's the short-form basic information you need.

 I suspect state and local income taxes (where applicable) have to follow the IRS rulings on the subject.



Yes. And actually you can only be taxed if you also declare your Bitcoin earning (specifically when you sell it), if you declare it as part of your personal income in a specific quarter or year. However, most of the Bitcoin traders or miners do not declare it as it is not really regulated to their country. In the future maybe the government will become strict on declaring this. They might even impose a special tax for Bitcoin activities. This is because the government  will not let itself get behind with the Bitcoin success and money return.

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October 30, 2017, 01:07:30 PM
 #19

In Europe you have to pay income tax.
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October 30, 2017, 02:56:05 PM
 #20

Im glad to live in Canada because our retarded Justin Trudeau doesnt even know what is bitcoin and we have not, or few, laws concerning cryptocurrencies.

Plus, canada has.cheap electricity. Thats why im trading and investing all my profiits into mining.
It is the good luck of yours that you are living in Canada where the electricity is so cheap and I think mining will more profitable in your country as compare to other countries so keep you job continue to get more and more profit from it .
Getting cheap electricity costs would be a plus value that is very helpful. Electricity is one of the biggest costs in mining, so if we can save electricity costs we will be able to lower overall mining costs. Until now there may be some countries that apply the same thing. But until now I still have not found a mine that requires to pay taxes.


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October 30, 2017, 09:46:55 PM
 #21

Why tax when the cost is already there in the form of hardware and electricity?
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October 30, 2017, 11:20:27 PM
 #22

Why tax when the cost is already there in the form of hardware and electricity?
Really Huh
If you or a company is making income by mining - or any other means - how naive/young are you that you would you be surprised that a government will not want their part of it? Rule of Life: You make money, you pay taxes on it.

-Joshua Zipkin aka Joshua Alexander leaked AMT A1 miner skype chats http://bit.ly/1Qjt6lj
-For bitcoin to succeed the community must police itself.
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October 30, 2017, 11:30:42 PM
 #23

Along the lines here: Got 2 tax bills from my state today. One is for Sales-Tax due ($149) on 2 s9's I got in 2016 and 1 for a tax-due adjustment ref 2013 for $197.

The Sales tax I understand - if the import value exceeds $2500 and CBP requires duty to be paid (was like $49) then the broker (UPS) tells your state about it and if your state requires paying Sales tax on out-of-state/country purchases they get interested...

Not sure about the 2013 income adjustment bill - didn't start mining until 2014 - but cheap enough to just pay anyway

-Joshua Zipkin aka Joshua Alexander leaked AMT A1 miner skype chats http://bit.ly/1Qjt6lj
-For bitcoin to succeed the community must police itself.
-Support Sidehacks miner development. Donations to:   1BURGERAXHH6Yi6LRybRJK7ybEm5m5HwTr
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October 31, 2017, 08:56:43 PM
 #24

Why tax when the cost is already there in the form of hardware and electricity?

 Because the government wants all the money it can get away with grabbing - and sometimes MORE than it is legally owed.

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October 31, 2017, 09:45:44 PM
 #25

Why tax when the cost is already there in the form of hardware and electricity?

 Because the government wants all the money it can get away with grabbing - and sometimes MORE than it is legally owed.


Bitcoin's price is gradualy going up and the income of the people who mine it as well, and obviously in the countries where goverments are actually keeping an eye on the bitcoin know how much poeple make from it without paying taxes, so eventualy they will either make electric cost for the ones who mine bitcoin a bit more, or they make them pay taxes, imagine an unmployeed person who is making like thaousands of dollars without paying any taxes.

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November 01, 2017, 02:23:43 PM
 #26

In the USA the IRS defines income as occurring as soon as you have a *right* to collect the income, not when it is received.  Deteemining when that occurs with different payout methods and pools (e.g. nanopool doesn't really show a list of rewards, only a growing number and a list of payouts) is proving problematic.

Anyone have real knowledge, not opinion?
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November 01, 2017, 02:28:06 PM
 #27

Can't speak to Canada.

 In the USA, IRS rulings are that Bitcoin mined does not become taxable 'till you either sell it for cash or spend it on "tangible property" at which point it becomes taxable at the cash value of the amount of Bitcoin you spent.

 There's a lot more verbage involved, but that's the short-form basic information you need.

 I suspect state and local income taxes (where applicable) have to follow the IRS rulings on the subject.



There is also some discussion now about trading for altcoins not meeting a like kind exchange rules.  The IRS has not ruled one way or another, so technically the correct way would be if you traded those bitcoin for ethereum, it would be like you sold the coins for cash and creates a taxable event.

State and local do not necessarily have to follow IRS rulings, but they generally do.  What you mainly need to watch out for is depreciation on mining equipment (many states do not conform to federal bonus or 179 standards) and gain/loss on sale of equipment.  I have not heard of a state not following the rules of when bitcoin becomes a taxable event, but always consult your local code or a tax professional familiar with your area.


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DannaWonder
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November 09, 2017, 11:43:40 AM
 #28

Somebody can help me about the taxes mining Bitcoins in Canada and USA. Taxes to import the hardware, income tax,  etc.

Taxes on importing those hardware are inevitable since tariffs are always assessed on goods entering every country specially if the price of it is quite high. Income taxes from bitcoin mining operation is quite hard to compute. I don't think there are already countries who gave the exact formula on how to compute taxes from it. Things that should be considered are, the expense that you had for mining the coin. Where are they going to base the income that you got from mining since the transactions are somehow anonymous how can they get a record of the exact number of coins that was mined by the farm.

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November 09, 2017, 01:36:52 PM
 #29

Somebody can help me about the taxes mining Bitcoins in Canada and USA. Taxes to import the hardware, income tax,  etc.

Taxes on importing those hardware are inevitable since tariffs are always assessed on goods entering every country specially if the price of it is quite high. Income taxes from bitcoin mining operation is quite hard to compute. I don't think there are already countries who gave the exact formula on how to compute taxes from it. Things that should be considered are, the expense that you had for mining the coin. Where are they going to base the income that you got from mining since the transactions are somehow anonymous how can they get a record of the exact number of coins that was mined by the farm.

Probably best to keep your opinions to yourself when you have no idea what your talking about. Helps to not spread false information that makes you look stupid. I believe i found issues with every single sentence you wrote.


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November 09, 2017, 08:31:57 PM
 #30

Somebody can help me about the taxes mining Bitcoins in Canada and USA. Taxes to import the hardware, income tax,  etc.

Taxes on importing those hardware are inevitable since tariffs are always assessed on goods entering every country specially if the price of it is quite high. Income taxes from bitcoin mining operation is quite hard to compute. I don't think there are already countries who gave the exact formula on how to compute taxes from it. Things that should be considered are, the expense that you had for mining the coin. Where are they going to base the income that you got from mining since the transactions are somehow anonymous how can they get a record of the exact number of coins that was mined by the farm.

 Tariffs vary widely - and in many cases on specific items being imported into strong "Free Trade" countries IS in fact zero.
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November 11, 2017, 02:30:43 AM
 #31

In regards to Canada, they're going after employee discounts given by employers. If they're going after nickels and dimes, how thirsty will they be for bitcoin mining?

Genesis-Mining promo code, 3% off!
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November 11, 2017, 04:01:49 AM
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Certainly bitcoin taxation is unlikely. Because mining is not acceptable to governments, it can not be taxed. Bitcoin mining is a very profitable mining industry in the world.

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November 11, 2017, 04:54:26 AM
 #33

I am keeping the transaction emails from coinbase when mining deposits hit my account and using that as the cost basis for each mining payment.    Not perfect but it will work.

My understanding is that since the process is a bit immature, the IRS is using some discretion with how people calculate their cost basis / fair market value, but they'll expect you to be consistent.  I.e. if you cant cherry pick exchange rates from different exchanges or times to help you setup a better cost basis. My advice would be to start a very thorough spreadsheet to track your income if you plan on making more than a grand per year.





Don't make life so hard on yourself buddy.  In Coinbase just go to Tools->Reports  then create either a transaction history or cost basis for taxes report.  Report is well laid out and clearly shows all you've done in your account.
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November 11, 2017, 05:16:32 AM
 #34

What sort of depreciation models are you guys using for your miners?  When I first started I came up with an exponential formula to depreciate each miner monthly by 10% each month from it's previous month NBV rounded up to the nearest $25.  This would make each miner fully depreciated around 2 years which I figure is close to the working life of a miner.  I was also trying to find a balance between difficulty and BTC price, but since I came up with that formula the BTC price has exploded so I'm thinking of possibly changing me deprecation model and interested in what other are doing.
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November 11, 2017, 05:05:26 PM
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What sort of depreciation models are you guys using for your miners?  When I first started I came up with an exponential formula to depreciate each miner monthly by 10% each month from it's previous month NBV rounded up to the nearest $25.  This would make each miner fully depreciated around 2 years which I figure is close to the working life of a miner.  I was also trying to find a balance between difficulty and BTC price, but since I came up with that formula the BTC price has exploded so I'm thinking of possibly changing me deprecation model and interested in what other are doing.


Mining is a one process of bitcoin system and it's a transaction process like selling and buying are the work in this and to the bitcoin mining tax is not bad because it's going to government  so this are taxes mining Bitcoins.
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November 11, 2017, 09:53:11 PM
 #36

What sort of depreciation models are you guys using for your miners?  When I first started I came up with an exponential formula to depreciate each miner monthly by 10% each month from it's previous month NBV rounded up to the nearest $25.  This would make each miner fully depreciated around 2 years which I figure is close to the working life of a miner.  I was also trying to find a balance between difficulty and BTC price, but since I came up with that formula the BTC price has exploded so I'm thinking of possibly changing me deprecation model and interested in what other are doing.

 Won't fly with the IRS, I'm 99.99% sure they count cryptocoin miners as "computer equipment" (which they are per most definitions) and require you to use THAT insanely long (even for REAL computers) depreciation timeframe.
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November 12, 2017, 02:38:28 PM
 #37

Somebody can help me about the taxes mining Bitcoins in Canada and USA. Taxes to import the hardware, income tax,  etc.


Taxes for your income from bitcoin mining should only be computed once you sold your coins for a fiat currency. But government should also compute your expenses first before taxing your income. And also tax should be computed on the amount that you farmed the coin not on how much you sold it.

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November 16, 2017, 03:30:06 AM
 #38

Somebody can help me about the taxes mining Bitcoins in Canada and USA. Taxes to import the hardware, income tax,  etc.


I Think taxes can only be computed once you converted your income to your
local currency less the expenses you had for your operation.

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