IRS considers bitcoin property, so yes you will have capital gains. If you held them for 1 year + 1day or more they are long-term capital gains and get preferential treatment. As to your basis in them, under the regs you are suppose to use the amount paid for them, or if mined the value you reported as income at the time they were mined.
Hope that helps.
I have invested $500 in a Bitcoin share, so I have to report $500 to the IRS ? Is the $500 all I have to report regardless of the gains ? What if there are loses ? Do you know what forms I file ? Any idea if registering an investment business would lower my taxable amount ?
Sorry for so many questions, I guess I'll just contact the local IRS office.