this whole thread had me rolling... Legally hide money from the G

See, I want folks not to be afraid of bitcoin.

I don't want folks thinking we're a bunch of criminals, et all.

I want folks to see that this whole thing isn't a scam, ponzi scheme, or the like.

I'll pay my capital gains tax gladly.
 
atp1916 said:
See, I want folks not to be afraid of bitcoin.

I don't want folks thinking we're a bunch of criminals, et all.

I want folks to see that this whole thing isn't a scam, ponzi scheme, or the like.

I'll pay my capital gains tax gladly.
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same
 
Why would you have to pay taxes for mining it? What are you mining? Do you convert it to fiat? As long as you hold crypto and don't convert it to fiat. There is no taxes Now if you spend it within the first 12 months of getting it the tax is 40%. If you wait and spend it after the 12 months the tax is 15%. The Government does not call it a currencies. They call it Property. So you should be able to deduct a lot of tax for the up keep of said Property!


hlfbkd420 said:
I'm with you guys.. I have enough cash flow to cover the taxes I have to pay on my mining income... It sucks but hey, it's better than an audit.
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Airbrushkid said:
Why would you have to pay taxes for mining it? What are you mining? Do you convert it to fiat? As long as you hold crypto and don't convert it to fiat. There is no taxes Now if you spend it within the first 12 months of getting it the tax is 40%. If you wait and spend it after the 12 months the tax is 15%. The Government does not call it a currencies. They call it Property. So you should be able to deduct a lot of tax for the up keep of said Property!
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Looks like you have some reading to do.

From what I have read, it is considered "income" at the time it is mined. When you sell or convert to fiat, you pay capital gains taxes depending on how long you held on to it. 15% for less than a year and 25% if more than a year depending on your level of income (these seems to vary among the sites I have read). And yes, I have converted some of it to fiat.

https://cryptocurrent.news/2017/06/24/us-mining-tax/
https://www.bitcoin.tax/faq
https://www.cryptostache.com/2017/09/27/us-taxes-bitcoin-tax-hokey-pokey/

For the mother of all answers to your questions here it is direct from the IRS:
https://www.irs.gov/pub/irs-drop/n-14-21.pdf

Not sure how true what the H&R block guy says about it not having capital gains when mined:
http://community.hrblock.com/t5/All...ency-mining-and-taxes/td-p/94259#.WhWxtU2WyUk
 
so you posted the news release that states a memo was released..... Here is the memo... https://www.irs.gov/pub/irs-drop/n-14-21.pdf

A quote from your news release:
"Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes".

The statement above is further clarified in the actual IRS memo...
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.
 
wait... at time of receipt. I totally received this originally a year ago i swear. Everythign since has been me just transferrign it around.
 
The IRS states that it is not currency. They say it is a property. So they need to clerifiy this.
 
Airbrushkid said:
The IRS states that it is not currency. They say it is a property. So they need to clerifiy this.
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so in reality how are we expected to actually pay taxes on mining? I can easily make every dime disappear as a reasonable expense with continuous expansion. at a certain point I'd have to move it all and build a bit of a datacenter or just move out of my house and give the house to becoming a datacenter.
 
Move north, ittl save you money on cooling lols
mkrohn said:
so in reality how are we expected to actually pay taxes on mining? I can easily make every dime disappear as a reasonable expense with continuous expansion. at a certain point I'd have to move it all and build a bit of a datacenter or just move out of my house and give the house to becoming a datacenter.
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mkrohn said:
so in reality how are we expected to actually pay taxes on mining? I can easily make every dime disappear as a reasonable expense with continuous expansion. at a certain point I'd have to move it all and build a bit of a datacenter or just move out of my house and give the house to becoming a datacenter.
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If you are exchanging BTC for goods, in your case, more hardware for mining, you pay capital gains on the difference between your cost basis and the current prevailing rate. It's convoluted, but it's how the IRS currently treats crypto. For declaring mining income, the easiest means is taking the day's average (high+low+close/3) on the day you receive the mining rewards.
 
oblox said:
If you are exchanging BTC for goods, in your case, more hardware for mining, you pay capital gains on the difference between your cost basis and the current prevailing rate. It's convoluted, but it's how the IRS currently treats crypto. For declaring mining income, the easiest means is taking the day's average (high+low+close/3) on the day you receive the mining rewards.
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Fits in pretty well with Nicehash's payment schedule.
 
oblox said:
If you are exchanging BTC for goods, in your case, more hardware for mining, you pay capital gains on the difference between your cost basis and the current prevailing rate. It's convoluted, but it's how the IRS currently treats crypto. For declaring mining income, the easiest means is taking the day's average (high+low+close/3) on the day you receive the mining rewards.
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outside of nicehash absolutely impossible to track.
 
mkrohn said:
outside of nicehash absolutely impossible to track.
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Wrong. If you solo mine, you have the blockchain. If you use a pool, you have the payout stream of your shares/credits on their website db.
 
oblox said:
Wrong. If you solo mine, you have the blockchain. If you use a pool, you have the payout stream of your shares/credits on their website db.
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so you're supposed to be able to not only log hundreds of transactions but also calculate the daily values? yeah this'll work.
 
mkrohn said:
so you're supposed to be able to not only log hundreds of transactions but also calculate the daily values? yeah this'll work.
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lol, yep. That's the IRS ruling. It makes any sort of day-to-day currency transaction a complete pain for both the end user and the merchant.
 
If it is base off payouts for mining. Then limit your payouts to like 2 a month. Am I wrong?
 
Airbrushkid said:
If it is base off payouts for mining. Then limit your payouts to like 2 a month. Am I wrong?
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You get credited shares on a daily basis... whether or not you pull your coins off the pool is entirely at your discretion.
 
So what happens if you don't pull those off? How can one be charge for something they don't have? Do you have any links to explain the credit shares? I like to read up on it.
 
Airbrushkid said:
So what happens if you don't pull those off? How can one be charge for something they don't have? Do you have any links to explain the credit shares? I like to read up on it.
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It has nothing to do with pulling btc off... it's about acknowledging mining revenue as gross income AS IT IS EARNED per the IRS (now you can use electricity and other expenses to offset some of this revenue). As for the being charged on something you don't have... you have access to those coins since you can pull them off the pool at your discretion... Have you not ever used a pool before? All pools show how many shares you are credited for the round and will have a payout stream so you can track revenue. If your pool doesn't, you're flying blind and need to move to a better pool (it would be absolutely shocking to me if this actually was the case).
 
I'll be first to admit when it comes to this I'm lost. I'm on flypool and don't see how I can access those coins or even pull them off. Unless your talking about the payment threshold.
 
Your payout stream only shows when your paid. That would be set by your payment threshold. So if your threshold is set to say 10 zec and that takes your miner 2 1/2 months to mine. Would that be for declaring mining income on the day you receive the mining rewards?
 
Airbrushkid said:
Your payout stream only shows when your paid. That would be set by your payment threshold. So if your threshold is set to say 10 zec and that takes your miner 2 1/2 months to mine. Would that be for declaring mining income on the day you receive the mining rewards?
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On a P2Pool where you don't have possession of the coins, I think you could make the case that your threshold payout date is the day of income. Hard to gauge if your cost basis would then be the average rate between payouts or the average on the day received, but as long as you defend it and consistently apply it, I think you would be safe given how many issues still need to be clarified since the 2014 guidance. It's a good question nonetheless and one I didn't consider for P2Pools.
 
Sometimes it feels that way... I work at a day job and own my own business... My taxes are interesting and now they are even worse.
 
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