Quote from: Jobe7 on April 21, 2013, 02:58:07 PM

Quote from: roy7 on April 21, 2013, 01:05:32 PM

Quote from: Jobe7 on April 21, 2013, 12:55:17 PM

What you pay tax on is the amount you change into FIAT. It is simply NOT considered capital gain, or bloomin' anything else.. might as well start trying to declare World of Warcraft gold or Eve online currency (can't remember what that's called) as your 'capital gains' ..

I can only speak to the USA, but converting it into something of value other than USD should still be a taxable event I believe. It'd fall under barter most likely:

http://www.irs.gov/taxtopics/tc420.html

That is, I pay you (as a barter since bitcoin isn't an actual legal tender, yet?) X bitcoins for a car worth $15,000 USD. That places my mined bitcoins at a value of $15,000 USD with a cost basis of zero, for a $15,000 realized gain.

OK, if you had btc of $15,000 USD value (lets use a random number, 200 btc), then brought a car with that amount. You now have a car, would you still have to pay tax on the btc that you no longer have?

On the car, yes, same as in the UK. But you don't pay tax on stuff (money/btc) you don't have.

So, in the US you'd have to declare your btc, pay tax on that as if it was $15,000? (how do you propose to pay that tax in btc exactly? Does the IRS have a Bitcoin wallet now that I'm unaware of?).

Nobody actually pays tax on barter.