Hi Everybody,
When getting Satoshi/Bitcoins from the internet in general, could you please tell me whether you have to pay tax to the country you get them from or do you just pay taxes to your own country?
Thanks for your help.
In USA, Depending on what your doing with bitcoin, if your mining bitcoin you have to pay income tax on every cent you make. Also if the price of bitcoin goes up even 1 cent you also have to pay a tax on that called, Capital Gains tax. In your trading bitcoin, you may require registering for a "FinCEN" as it may be classified as money transmitting. As far as I know, these taxes must be payed based of the place you live no matter where you buy the bitcoin.
I don't think you will need to pay tax when you mine bitcoin. You are required to report tax only if you sell bitcoin to fiat. In which case it is treated like if you are selling the stocks, same rules apply.
You have to pay tax on the mining of bitcoin. You can deduct things like cost of machines (depreciation) and electricity, but tax is still owed. Consult an accountant (like me) for further insight.
Really? but how to calculate the value of the bitcoin? at the time of mined? Say I got each day some bitcoins because of mining, I have to record the price that day for my tax purpose? It will be a lot of work.
Technically to be 100% right, you should record the price after each block found with the pool you are using. Of course that is not going to happen (although would be a great piece of software idea..) so instead I mine all coins to a single address that I dump at the end of each month and record my basis as that. So you owe ordinary income on that part, then any fluctuation of price when you sell the assets would be capital gains.
How do you calculate the price? Based on which exchange? Always the same one or maybe the one, which has the lowest price at the moment? Why at the end of each month, couldn't you do it once a year? Aren't you supposed to report gains only when you turn coins to fiat?
There are stances completely different to yours, for example:
To the best of my understanding. When I keep BTC in BTC any income I make in BTC is not taxable as to Federal Income Tax. When I cash out BTC, and have made a profit, that is taxable as income. State taxation laws will vary. Can you be more specific about the situation you are seeking clarification on please?
Best:
George D. Greenberg, Esq.
www.attorneybitcoin.com