Taxes Mining Bitcoins

[manuelcc]

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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[QuintLeo]

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.

[Entropy-uc]

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.

[P4ndoraBox]

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.

[Emoclaw]

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.

[xIIImaL]

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.

[Svener]

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.

[BitcoinPlatinum]

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.

[dificanovi]

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.

[QuintLeo]

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.

[hurain]

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 .

[Entropy-uc]

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...

[BeerMan81]

https://www.irs.gov/newsroom/irs-virtual-currency-guidance

[trinitrate]

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.

[ryanyulinruan]

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.

[franco123]

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.

[frank175]

In Europe you have to pay income tax.

[gilangIDR]

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.

[lgbtcoin]

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

[NotFuzzyWarm]

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

Really
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.