*takes a step back* Wait.... The IRS can tax your investment's income?
Or do they just declair that bitcoin mining isn't an investment...
Yeah it's income... when converted to Fiat, but I thought the US declaied that bitcoin IS NOT MONEY and it's a commodity?
IRS taxes income of commodities?!
I... I am uhhh, Really lost now.
made an exception for mining ..the IRS does not like the idea that you can add electricity with a bitcoin
miner and thus with a quick xfer make $$$ in their view out of thin air..they want it added to your income
so each time you send bitcoin to your address you are to keep track and at that day whatever the bitcoin
price is you add it to your income for the year for tax purposes
yeah it is dumb and yeah who would do that (unless in my situation)
and it will likely go away by congress in 2015
but yeah....20% capital gains if you sell a coin mined or not after 1 year and 1 day (property land stipulation it think this is?)
if you mine it 25% off what the bitcoin is worth (irs/soc sec etc) and you also must keep the coin for 1 yr and 1 day
and pay 20% on capital gains if it applies (if you are legal you could declare a capital loss too)
if you sell a coin bought or mined within a year it is 46% capital gains ...you add that and the 25% off
the top for mining the IRS asks for ..who would do this ..(unless of course caught like me by IRS/bank cabal)
again from what I gather congress in USA is kinda ticked at IRS and likely will change this imho because it is
dumb ..keep track of every bitcoin transaction ..ie you mined bitcoin in 2009 for 2c and you buy a 600 buck
tv this year with that bitcoin and the irs is assuming you will pay 599.98 in capital gains ie dumb
oh and the guidelines say you have to report to the IRS all your bitcoins from 2009 to present
and they gave the us citizens 20 days to do so before taxes were filed april 2014 when guidlelines came out
it is a giant IRS 'fishing expedition" in my view to track down criminal use of bitcoin ..no way will anyone
moving bit bitcion money do this .thus the IRS has a 'hook' on their funds/transactions again imho
anyway it will be changed imho but with elections this year (Nov 2014) it probably won't
get fixed back to something more sensible till 2015 back to the old way
..imho they don't care where you got the coin you sell it 20% capital
gains...you buy equip your risk no depreciation..but till then my situation I'm stuck by
these rules...
everyone else i guess just sit on your coin and wait it out till 2015 i USA I guess
they change the rules and you have to report bitcoin ..well golly 2015 was a
very good year for me (bats eyelashes)..or not
but if you did a lot of wire xfers for bitcoin equip or do a lot of btc exchange stuff the IRS
could look you up doubtful ...but could...paper trail at the bank made me go legit
which otherwise I'd be having an IRS audit as we speak due to bank reporting rules
and mess up ..my legit tax forms 2013 got me out of such (again my unique situation
on why i reported taxes 2013 under the above dumb regulations)
anyway these are my views/suppositions/etc from my situation talk to your
own tax professionals or not...ie CPA tax folks
but essentially the IRS is treating bitcoin as property/land thus the 1yr 1 day stuff
to avoid speculation as they do with land ..and property aspect is like a farmer
you can depreciate a tractor you can depreciate a miner...that does offer me
some relief from the above in that i can run that out 5 years..but again i'm stuck
anyway my warped viewpoint of what is going on (gets me thru the day)
Searing