Quote from: lucasjkr on April 19, 2015, 03:22:16 PM

Quote from: plasma1010 on April 12, 2015, 09:48:19 PM

Quote from: bgibso01 on April 12, 2015, 09:01:21 PM

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.

We're past April 15, but you're talking about next years taxes not this years, right?

When did you make your investment?

If it was less than a year before you sell it, it's taxed as a short term gain which is the rate of ordinary income. If it's over a year, then it's long term gain, which is taxed at a much lower rate, depending on your total income.

Forming a business to try to lower the taxes on a $500 purchase doesn't seem worth it; first there's the expense of forming the business itself, and I can't imagine what expenses you'd hope to claim to reduce your gain that you couldn't claim on your own.

(Not a tax professional, don't consider this advice, just my thoughts based on the little you shared)

Oh and the form for reporting gains and losses is schedule D

So what you are saying is I will not get significant tax reductions if I form a business for trading Bitcoins ? I have more then $500 in investments.