Quote from: oblongmeteor on May 29, 2013, 06:23:37 PM

For the individual, they treat it like an asset (like a painting by an expensive artist) - therefore you wouldn't pay any tax unless you liquidated to fiat. In this instance it would fall under capital gains rules

Right, I understand that, but I see mining as like the artist creating the work in the first place, rather than a collector buying and later selling a work of art.

So lets suppose I create a work of art:

I consume some resources while making it, e.g. electricity to heat and light my studio etc = £1k value (analogous to electricity used when mining)
I use various tools to make the work of art that cost me £2k, but they are not consumed by the work and can be reused for subsequent works I create (analogous to BTC mining hardware)
Suppose that when I create it, the work of art could be sold for £10k (analogous to BTC market rate at the time of mining)
But then I decide I would rather keep it for a year, and when I sell it a year later, it is worth £20k (analogous to BTC market rate increasing between mining and selling)

I would guess that any artist doing all of the above would do it as a properly set up business with accounts. Costs would come out of the company accounts and tools would be depreciated according to accounting rules. Income tax would be paid on income drawn down. It seems like overkill if anyone mining a few coins on their home PC has to create a business to handle all the accounting.

So the question is, if you did all the above without having it all within business accounts, is there any simplified way to handle it all? Or do we all need to start depreciating our assets properly etc? Of course, if we all registered as businesses, we could reclaim the VAT on hardware purchases