Does anyone have opinions as to the correct way tax should be managed with Bitcoin?
I think this is a country specific question. But generally you should always have two points of view. One is where you look at Bitcoin as an asset. Then the same tax regulations should apply which apply for commodities like gold or copper where the gains you make from speculation are taxed. The other view is if you look at Bitcoin as a currency which you use to pay for your expenses and which your customers use to buy goods and services from you. Both should already be known from a tax perspective.
IN the second case, Bitcoin should simply be treated as a foreign currency which you need to convert to local currency. To give an example, let's assume you are based the UK where your local currency is GBP. You sell goods at home in the UK (in GBP), to continental Europe (in EUR) and to the US (in USD). Then, when you start selling something for Bitcoins you just add another currency. In this example, all of these currencies need to be converted to GBP at some point in order to produce a profit & loss statement and to make a tax declaration. For the conversion you simply use the official exchange rate and apply it according to the rules that are already there for foreign currency conversion.
Any thoughts on this?
