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Author Topic: Not worth mining any longer for anyone not already in. Am I wrong?  (Read 4173 times)
Cluster2k
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August 08, 2013, 12:40:37 AM
 #41

ROI achieved on Jalapenos received in early July, including electricity, interest, and tax (yes, income tax on income earned).  Paid with USD$ and have now received more USD$ than previous input.  Mission accomplished.

 Anyone buying an ASIC today needs to have fast delivery.  BFL will in the very best scenario ship new 5Gh orders made today by the end of September.

just out of curiosity, that means you sold the bitcoins for USD then, correct?

i was under the assumption that bitcoins themselves weren't counted as income

Yes, I sold the bitcoins and converted them to my local currency.  Once the money arrives in my bank account it's a little hard to hide the income from the government  Wink  I don't declare bitcoins still in my wallet as to me, they're like shares or a brick of silver with constantly fluctuating value. 

Do not send bitcoins to me: 16b8s7pBJ9rUmsExNW25qD5VUqVqRPZuXu
100% solar powered bitcoin generation
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DyslexicZombei
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August 10, 2013, 09:42:56 AM
 #42

Something to consider about BTC earned via dividends or mined versus earning an income that's immediately taxed.

- Let's say you spent $100 on the latest e-doodad at the Nile e-superstore. To have spent that $100, unless you're Mitt Romney or in his type of position, you're getting taxed at anywhere from 25-40% if you're like most people. So to have purchased that $100 worth of electronics you had to have labored to earn $125-140 depending on your tax situation.

- Now say you mined a Bitcoin or got paid in BTC dividends. Who knows how long it took but you have a Bitcoin. If you were to purchase something with that coin, currently valued at about a $100, you've essentially purchased something that would have really cost you $125-140 pre-tax.

Of course, purchasing something with that coin has an intrinsic opportunity cost that offsets the tax advantages: you've decided that whatever you've decided to purchase with that BTC at that moment is worth more than that particular BTC's future value - regardless of one's position on the viability of the longevity of cryptocurrencies like Bitcoin.

This logic would work, if bitcoin wasn't taxable. Theoretically it IS taxable income the moment you convert it to USD.   For now, you most certainly can pay for goods and avoid income taxes with the coins you earned but it would be foolish to assume this is "tax free income".

Today there was a court ruling that Bitcoin denominated investments were in fact securities and would be treated as such.  https://bitcointalk.org/index.php?topic=269612.new#new

This means that those bitcoin dividends you are talking about spending, those are coming from a security in bitcoins.  That security in bitcoins now needs to obey SEC rules and regulations. The exchange offering those BTC securities also needs to obey rules and regulations.

The implication here is that dividends, are 1099-DIV income.  If you are being paid dividends that's taxable income.  It may not be today, but it could definitely be backdated and reported to the IRS if companies like ASICMiner are now required to comply with regulations....

Buyer Beware.

Sorry for the late reply to this quote but, what's wrong with filing 1099s? Done it before & I don't mind paying taxes. I don't look at mining & mining speculation as a way to *hide* money from the Feds (but I do see it as a way to maintain & build wealth, like other securities). I, for one, do like having lights that work, streets that are paved, etc., etc.. due to taxes paid by citizens. Not saying we should grab everyone's wealth & re-distribute it, but we all have to and should pay our fair share of our local, state, and fed. taxes. It's one of the things we miners & investors have to do to make BTC really take off & be legit.

I've seen documentaries of places where true anarchy rules, like Somalia. It's not pretty.
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