I've been trying to figure out how Bitcoin is taxed before I trade. Does anyone know?
As per tax is concerned i don't think that the bitcoin is a currency on which tax is applicable. Unless someone converts the bitcoin into the real money the money is tax free. You need to understand that if the trading is between bitcoins then there is no way you could be charged tax instead you have to pay fees so that the transaction is being processed successfully and smoothly. I think this would help you to know the difference.
So far there is no tax on bitcoin but we are paying the exchanges through the fees and I believe all those who are registered exchanges are paying taxes of course from the profit they get on every trade. As of now South Korea are trying to impose an almost 20% tax on every registered exchanges and I think many countries will also do this.
I think too would agree with taxing bitcoin if you would trade it to your own currency. Because it would make a economic lose if every corpoation in a country would make bitcoin as a transaction. Surely not common users are into in bitcoin. Rather than banning it, better make legal laws on how to manipulate bitcoin for advantage than seeing it as an illegal investment.