I aquired most of my coins by mining. This has no anology with currency (unless you're counterfeiting 
) so I intend to treat bitcoins as precious metals and declare my profits as capital gains. Since I mined them more than a year earlier, they are long term capital gains. This is not as favorable as usual because it turns out that precious metals, even bullion, are considered "collectables" and taxed at a rate of 28%. Normal rate is 15%. If your overall tax rate is less than 28%, you can pay the lower rate. That is what I intend to do, based on my reading of the IRS documents.
) so I intend to treat bitcoins as precious metals and declare my profits as capital gains. Since I mined them more than a year earlier, they are long term capital gains. This is not as favorable as usual because it turns out that precious metals, even bullion, are considered "collectables" and taxed at a rate of 28%. Normal rate is 15%. If your overall tax rate is less than 28%, you can pay the lower rate. That is what I intend to do, based on my reading of the IRS documents.