Bitcoin Is Property Not Currency

[iambk]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

Agreed.  If there is a demand and especially if people are willing to put up a little BTC for it then I'm sure programs will pop up to pull the exchange rates and help do the needed calculations.

[sykal]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

[Stratobitz]

No. But someone certainly will. All the way up to the Supreme Court I would bet.

And you will be right there, carrying a placard outside, right?

My $.02.

No.  Nice eyepatch btw.

Thanks!

Just funnin' ya on the replies!

We are all awash in new regs and trying to stay afloat!

My $.02.

Likewise All I'm saying, there's been loopholes before. The IRS is known for them.

[sykal]

Agreed.  If there is a demand and especially if people are willing to put up a little BTC for it then I'm sure programs will pop up to pull the exchange rates and help do the needed calculations.

You aren't getting it. Let me do an example:

to make it easy, lets keep fractions out of it. I mined 1 BTC yesterday, at a price of $550
I then mine 1 BTC today at a price of $600
I then mine 1 BTC tomorrow at a price of $650
Do this for 1 year.


I then sell 1 BTC. Tell me which BTC I sold. Was it a loss? a gain?
Where are you going to track exactly which coin was sold...especially if they're all partial coins (.25, .50, .25)...

I'll save the suspense...you can't track that.

[Beliathon]

A capital gain is a capital gain.  I don't think the IRS much cares if it is a pain in the ass for you to calculate.

I imagine they care about as much as I care that their tax laws will soon be virtually impossible to effectively enforce.

[smooth]

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

You keep records. Then you apply these rules. Not really that hard, especially with these high tech gadgets we have now called computahs

[amspir]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

Your exchange keeps that information.   If they are required to report it to the IRS, they will.

If you don't want to pay your taxes, then using poor record keeping isn't an excuse for not paying your taxes.   Men with guns from the IRS can still come after you and demand payment of taxes using a worst case scenario (on your part) .

[Stratobitz]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

Your exchange keeps that information.   If they are required to report it to the IRS, they will.

If you don't want to pay your taxes, then using poor record keeping isn't an excuse for not paying your taxes.   Men with guns from the IRS can still come after you and demand payment of taxes using a worst case scenario (on your part) .

IRS agents don't carry guns.

[iambk]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

I believe you can use FIFO, LIFO, or pick yourself the associations.  Same as with stocks.

[Stratobitz]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

I believe you can use FIFO, LIFO, or pick yourself the associations.  Same as with stocks.

FIFO requires a ruling from the IRS for your company... It would put you on the radar.

[iambk]

A capital gain is a capital gain.  I don't think the IRS much cares if it is a pain in the ass for you to calculate.

I imagine they care about as much as I care that their tax laws will soon be virtually impossible to effectively enforce.

You're right there is going to be a lot of BTC gains that don't get reported to the IRS.  All that I'm saying is that if you get caught then the "it was too complicated so I didn't report it" excuse isn't going to help you.

[amspir]

IRS agents don't carry guns.

http://www.forbes.com/sites/robertwood/2014/01/18/gun-toting-at-the-irs/

[iambk]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

I believe you can use FIFO, LIFO, or pick yourself the associations.  Same as with stocks.

FIFO requires a ruling from the IRS for your company... It would put you on the radar.

what?

All I'm saying is that you can pick yourself which BTC purchases match up to which BTC sales, just like with stock.

[Stratobitz]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

I believe you can use FIFO, LIFO, or pick yourself the associations.  Same as with stocks.

FIFO requires a ruling from the IRS for your company... It would put you on the radar.

what?

All I'm saying is that you can pick yourself which BTC purchases match up to which BTC sales, just like with stock.

No you can't. It's LIFO.

[black3000gt]

For large transactions, they might be able to find them, but honestly, how can the IRS find out how much you mine?

[smooth]

All I'm saying is that you can pick yourself which BTC purchases match up to which BTC sales, just like with stock.

No you can't. It's LIFO.

With stocks it is LIFO unless you identify specific shares when you sell. I haven't seen anything to say that bitcoin will be different that stocks, but who knows what is coming next.

EDIT: Correction stocks are FIFO (not LIFO) by default.

[Stratobitz]

All I'm saying is that you can pick yourself which BTC purchases match up to which BTC sales, just like with stock.

No you can't. It's LIFO.

With stocks it is LIFO unless you identify specific shares when you sell. I haven't seen anything to say that bitcoin will be different that stocks, but who knows what is coming next.

My bad, you are correct.

[iambk]

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

It would be pretty easy to write a script, using the blockchain API to iterate all the mining receive transactions during the tax year on the receiving address(es) and to get a historical exchange values from the same API.  The databases exist for free of charge, and you most likely have a computer that could run such a script.

please re-read my posts regarding the question remaining, how do you know which cashed out BTC, are from which exact mined BTC.
It helps zero to know, you received x btc at x price.

You need to know, that xyz bitcoin was recieved at xx price, and those same xyz bitcoin fraction was sold at yy price.

I believe you can use FIFO, LIFO, or pick yourself the associations.  Same as with stocks.

FIFO requires a ruling from the IRS for your company... It would put you on the radar.

what?

All I'm saying is that you can pick yourself which BTC purchases match up to which BTC sales, just like with stock.

No you can't. It's LIFO.

My understanding is that stocks are taxed FIFO unless you designate to your broker which shares you're selling at the time of the sale.  If you designate at the time of the sale then you can pick whichever shares you want.

With BTC there isn't a broker so I assume you simply need to document your decision but I'm not a tax lawyer so I'm not really sure.

[amspir]

For large transactions, they might be able to find them, but honestly, how can the IRS find out how much you mine?

If your exchange reports the sale of your bitcoin to the IRS, then they may/will make you pay tax on all of the bitcoin as regular income, if you can't document the source of the bitcoin, i.e. you are cyber drug dealer.

If you are a miner, then it would be advantageous to document the mining income as regular income (minus expenses) when you received the mining income, then pay tax lower capital gains rates on the profit from holding them when you cash out.

[Peter R]

No you can't. It's LIFO.

Of course you can pick if you are using a wallet with coin control.

That just blew my mind.