Quote from: cryptovirus on August 14, 2017, 12:45:03 PM

no law in any country exist on bitcoin mining tax......

Bullshit. In the US any Bitcoins you receive from mining are considered ordinary income. So your statement is totally false.

Quote from: Mack007 on August 20, 2017, 08:25:48 AM

To clear this discussion up, we need someone to chime in who has gone through the rigamarole of doing taxes on Cryptomining.
Paying the taxes on bitcoin you mined on XYZ date makes no sense whatsoever.

I have paid all the taxes required on my Bitcoin mining and Bitcoin trading. For mining you must claim the value of the Bitcoins you mined on the day you mined them. The way I did this was to use the average price on that day as the value. So if I mined 1 Bitcoin on a day when the average value was $10 then I have $10 in ordinary income on that day. You do this for all Bitcoins mined and the sum is the amount of income you have and then you calculate your tax from there. Of course you can deduct the cost of the mining equipment, electricity, etc. since you are running a mining "business". So if the amount you spent making your coins exceeds the amount they were worth you have a loss and this loss can be taken against your income.

Quote from: Mack007 on August 20, 2017, 08:25:48 AM

Say for instance, you mined a 1 Altcoin on 7/11/16 at a price of $500 . A month later the price of the altcoin crashes to $15 dollars amd doesnt recover for the foreseeable future. The value of the alt-coin is only realized once the altcoin is converted to Fiat or used to purchase a good. Technically the Alt-coin is a useless abstract currency until this occurs.

Nope. On the day you mined the coin you had $500 dollars in ordinary income. This $500 is also the cost basis for the coin. If you sell it for $15 one year later you have a long term capital loss of $500 - $15 = $485 and you can deduct this long term loss against all your other long term gains. If you hold it for less than a year then you have a short term capital loss of $485 and you can deduct this loss against your other short term gains.

Quote from: Mack007 on August 20, 2017, 08:25:48 AM

So the IRS expects us to pay the taxes on a mined alt-coin, before we ever realize its true worth? This makes no sense, but, if that is the case, then miners should immediately cash out whatever they earned, then re-convert whatever fiat they want to re-invest in the particular coin. This would make it much easier for the miner to organize their particular taxes.

Yes, the ordinary income from mining happens on the day you mine it. If you don't have a lot you can wait till the end of the year and report all your income from mining on your form and pay the tax at that time. However, if you are making a LOT of profit (income minus all your expenses) then you will have to make estimated payments throughout the year or face a penalty for not paying your taxes on time.

Quote from: Mack007 on August 20, 2017, 08:25:48 AM

A friend of a friend recently purchased multiple Asic miners and he told me hes going to mine, hold, and whenever he cashes out present the earnings as capital gains. He will put down the value of the equipment used in column E on his Schedule D 1040 form. I view this all as straight capital gains. I feel thats the best thing for us miners to do, even if the IRS balks, your not going to jail and maybe have to pay a small fine due to the fact that this is a new field, for us and for the IRS.

The amount you make from mining is ordinary income, not capital gains. You can deduct the cost of equipment, electricity, etc. against your ordinary income. All of this needs to be done on a schedule C - not E.

If, after mining the coins and correctly reporting their value on the day you mine them and determining the cost basis for the coins, you sell them then you have a capital gain or loss and the capital gain or loss is reported on schedule E.

Quote from: Mack007 on August 20, 2017, 08:25:48 AM

Another thing that may work is, mine, hold, and hope that your countries economy becomes like Japans, in Japan you can use Bitcoin as a taxless currency for goods, rent, property, cars and food. I foresee this happening after the price of a bitcoin starts to stabilize around 100K, which should occur toward the middle of the 2020's

Using Bitcoin in Japan: https://youtu.be/xrauYRGDCjY

Dream on.