Taxes Mining Bitcoins

[shield132]

Won't open new thread and I'll ask here too:
If I have big mining datacenter and I am officially registered, do I have to pay % from mining in country where bitcoin isn't considered as currency? Of course I have to pay electricity fees but..... Imagine it's hosting and I host websites but of course I don't pay fees of their earning from ads. So now imagine it on mining farm. If I mine ether, monero or etc with card, do I have to pay fees to goverment? Because some companies have render centers and how is the situation, can't understand.

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[bitterguy28]

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

i suggest researching if have a government regulation about mining in the said country because here in my country mining have nope taxes but the electricity power fees is very expensive, payment with expensive electricty i think is enough to pay taxes including in the electricity bill.

[family934]

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

i suggest researching if have a government regulation about mining in the said country because here in my country mining have nope taxes but the electricity power fees is very expensive, payment with expensive electricty i think is enough to pay taxes including in the electricity bill.

As a Canadian living in Ontario, I have been mining bitcoins and altcoins for quite a while and don't pay imposes on the bitcoin that I mined. In any case, that is for the most part since I don't offer.

In any case, from what I heard, on the off chance that you are a business and acknowledge bitcoin, you need to report it. In the event that you mined bitcoin and sold it, it considers capital pick up.

[honeyb0y]

I think mining profit taxes should be computed the same as other income. Bitcoin income should only be computed once you converted it to your fiat currency and all your expenses to get that coin should be deducted first. How don't know how your country do it.

[Mhd-Bobbi]

It turns out that mining is taxed
what about your fee?
whether the fee includes tax

[Lionidas]

Well I was studying the tax policies of Canada and the USA against bitcoin mining and other crypto related activities and I stumbled into the mind blowing fact that the both countries has a friendly law towards bitcoin like in the USA. IRS rulings are that Bitcoin mined does not become taxable untill 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.
And in Canada they possibly don't have any law on tax against bitcoin mining and activities apart from the bills you pay on power supply in carrying out your bitcoin activities.

This fact you are saying is quite interesting.
But does it also apply to exchanges when you put those mined bitcoin on them as well?
Without withdrawing them into a bank account of course but for just trading within the exchange.

[glowing10]

Our country has still not come put with clear guidelines as to how to tax the income earned from bitcoin or gains from the btc. But considering the normal income form business or from profession it has to be treated in a similar way like income earned and pay your taxes as per the category one fits into. Same goes with mining the btc whatever difference earned (Sale - Cost) if positive taxes are applicable as per tax slabs.

[sana54210]

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?

Irrelevant. I think It is when you trade for FIAT. They can't really track your wallet earnings, as this is truly private in nature, but i'm sure they will know sold currency on Coinbase (for example). Could be 1099-MISC or something. We shall see.

I really wonder as I really do not see how they want to know the wallet you are making use of to mine. Like you said, I guess we have to see how this whole thing will end up working out. One thing I am sure of is that there is no way they can start tracking the funds in wallets, when I can even always change my address at any time without problem.

Where the main taxing will come into play is when one is using an exchange to convert to fiat which is why governments are now making exchanges to be tax compliant.

[cpfreeplz]

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.

Lol yeah. Pretty sure he talks to his siblings. Maybe do a quick google champ. Kyle Kemper.


Mining is income. Declare it if you want. If you're being all legal you'll have to say how much it was worth on the date you mined it in CAD. Good luck with that!

[Jedzkie050617]

Our country has still not come put with clear guidelines as to how to tax the income earned from bitcoin or gains from the btc. But considering the normal income form business or from profession it has to be treated in a similar way like income earned and pay your taxes as per the category one fits into. Same goes with mining the btc whatever difference earned (Sale - Cost) if positive taxes are applicable as per tax slabs.

Also in my country doesn't yet implemented taxes for mining a bitcoin and for having anyone a bitcoin throughout the country. I think having taxes may be authorized by the government or any sector in the government. I would say that the bitcoin is decentralized crypto currency that only lives in cyberworld and the government cannot interrupt the mining and anyone having a bitcoin.

[Lionidas]

are you sure the stuff about tax, in china, you only need to pay the eletronic fee

But were they not thinking about banning mining in China just last month along with all the things that happened to the exchanges over 2 months ago, I can't see them just asking you to pay the electricity bill.
Unless you are hiding the fact you are mining when the tax man cometh.

[rickadone]

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.

Yeah, so far, that is the only way and which is absolutely normal. As long as you keep making use of fiat and you are making profit on whatever you are doing even if it is by keeping your funds in your wallet, then tax is compulsory. Although, this differs in so many places but with the governments regulating the exchanges now, this is something that cannot be discarded. Anything asides conversion to fiat is not even possible.

[MiningBattalion]

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.

Yeah, so far, that is the only way and which is absolutely normal. As long as you keep making use of fiat and you are making profit on whatever you are doing even if it is by keeping your funds in your wallet, then tax is compulsory. Although, this differs in so many places but with the governments regulating the exchanges now, this is something that cannot be discarded. Anything asides conversion to fiat is not even possible.

Transcation charges only for convert bitcoin into FIAT  it's a digital currency system only for online transaction So direct taxes not applicable.You no need to pay tax for the bitcoin you have with you.You can use bitcoin as a tax free one.

[carlfebz2]

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.

Yeah, so far, that is the only way and which is absolutely normal. As long as you keep making use of fiat and you are making profit on whatever you are doing even if it is by keeping your funds in your wallet, then tax is compulsory. Although, this differs in so many places but with the governments regulating the exchanges now, this is something that cannot be discarded. Anything asides conversion to fiat is not even possible.

Even if government would decide to impose taxes on miners they wont really have an idea on how much % they would ask and they wont really know for sure since its not still converted to fiat which means I do agree that it would still need to be converted first before it would really need to pay up the obligations. Mining operation specially do have large scale ones do really have serious profits which government would really keep an eye on it.

[ajqjjj]

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.

Yeah, so far, that is the only way and which is absolutely normal. As long as you keep making use of fiat and you are making profit on whatever you are doing even if it is by keeping your funds in your wallet, then tax is compulsory. Although, this differs in so many places but with the governments regulating the exchanges now, this is something that cannot be discarded. Anything asides conversion to fiat is not even possible.

Even if government would decide to impose taxes on miners they wont really have an idea on how much % they would ask and they wont really know for sure since its not still converted to fiat which means I do agree that it would still need to be converted first before it would really need to pay up the obligations. Mining operation specially do have large scale ones do really have serious profits which government would really keep an eye on it.

None of government will comes into the bitcoin and try regulize it until you are making conversation of bitcoin into Fiat cash via using banking.
In that time auto you have to show the source of income to have the current account in your bank. So automatically you will show the tax files up. Please keep check in your country whether they have the taxes on bitcoin or not.

[naidray]

Well I was studying the tax policies of Canada and the USA against bitcoin mining and other crypto related activities and I stumbled into the mind blowing fact that the both countries has a friendly law towards bitcoin like in the USA. IRS rulings are that Bitcoin mined does not become taxable untill 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.
And in Canada they possibly don't have any law on tax against bitcoin mining and activities apart from the bills you pay on power supply in carrying out your bitcoin activities.

And that is how it should really be which I still expect that is how it is going to keep being in the long run.
There is no way you are not going to at least at some point convert to fiat or make use of it to purchase some property and this is where the tax comes in.

Anything outside that is obviously not going to be taxable not like it is going to be easy monitoring every wallet to tax each and everyone in the first place.

[mayo2u]

Won't open new thread and I'll ask here too:
If I have big mining datacenter and I am officially registered, do I have to pay % from mining in country where bitcoin isn't considered as currency? Of course I have to pay electricity fees but..... Imagine it's hosting and I host websites but of course I don't pay fees of their earning from ads. So now imagine it on mining farm. If I mine ether, monero or etc with card, do I have to pay fees to goverment? Because some companies have render centers and how is the situation, can't understand.

Without question the best thing to do is to go to a tax attorney, follow his recommendation and use him to file your taxes. He has a relationship with the IRS (assuming the US here) and while the IRS may ask for additional monies you may very well not be hit with fees and interest. 

The above is speculative because there isn't an objective legal history regarding crypto.  You would have shown good intention and follow through by hiring an attorney and following the guidelines, and if your books are clear and above board then you have covered yourself as best as possible.

[Aleister Crowley]

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

it seems if we do hardware import with bitcoin payment system. this will not be taxed. because basically we do not transactions through transactions involving taxation ,, we will only pay the shipping cost of goods without the need to think about paying the state tax.

[NotFuzzyWarm]

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

it seems if we do hardware import with bitcoin payment system. this will not be taxed. because basically we do not transactions through transactions involving taxation ,, we will only pay the shipping cost of goods without the need to think about paying the state tax.

Bzzt -- wrong.
If your state requires you to pay sales tax on items purchased by phone/mail/online and the retailer does not collect and process the tax then YES we are supposed to report the purchase and pay the tax when ya file yearly state/fed taxes.

Catch is the state finding out. If your purchase requires no customs duty to be paid (under $2500), no problem. Pay duty (FedEx/UPS/DHL will let you know when/how much it is) and CBP reports the purchase to the state where miner is shipped. 3x times in the past Michigan sent me Tax-due discovery letters for miner purchases the previous year that went over the duty-free limit. In each case including late-fee totaled around $190 due.

From a business standpoint Customs duty and any taxes paid to get a miner are simple business deductions so becomes a moot point. For tax purposes what matters is the value of the equipment in USD at time of purchase.

[whateverittakes]

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

I don’t typically post on here, but this topic has garnered far too many ‘opinions’ instead of facts. To the OP: see the following for taxation of currency mining in the US.

Also, as mentioned by others, nearly every reputable pool will offer a downloadable spreadsheet of your data for tax and audit purposes. If they don’t - good luck.

Keep tabs on every purchase and use it as a write-off, from monthly rents to power cords. Larger items, such as your ASICs, may have to be depreciated over time (and you may want to in order to reduce future tax burdens). Typically these are on a 5 year straight line depreciation, or you can choose to do a Section 179 deduction and write off the full amount in year 1. See your CPA for all tax questions and what is best for you.

IRS Notice 2014-21, Q-9

https://www.irs.gov/pub/irs-drop/n-14-21.pdf

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.

Q-9:  Is an individual who “mines” virtual currency as a trade or business subject to self-employment tax on the income derived from those activities?

A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax.  See Chapter 10 of Publication 334, Tax Guide for Small Business, for more information on self-employment tax and Publication 535, Business Expenses, for more information on determining whether expenses are from a business activity carried on to make a profit.