Quote from: lunobird on March 26, 2018, 08:32:20 PM

Quote from: Dagamus(NM) on March 26, 2018, 08:08:56 PM

Quote from: lunobird on March 26, 2018, 06:27:59 PM

Quote from: crazydane on March 26, 2018, 06:10:10 PM

Quote from: lunobird on March 26, 2018, 06:02:37 PM

For example you mined emc2 at $2 bucks last quarter irs counts that as income right away the day it's mined. However emc2 is now .20 cents And your screwed.

I wish the IRS the best of luck trying to enforce that...

To the IRS your a criminal for mining if you don't report your earnings accurately or your hiding your mined coins, According to them you will be faced with a 250k fine and be sent to prison for 5 years for not reporting or hiding your mined earnings of a buck a day for your 1080 ti. LOL

Seriously hire an accountant, its not worth testing the irs, They can audit your 5 years later for your past history.

https://www.irs.gov/newsroom/irs-reminds-taxpayers-to-report-virtual-currency-transactions

"taxpayers could be subject to criminal prosecution for failing to properly report the income tax consequences of virtual currency transactions. Criminal charges could include tax evasion and filing a false tax return. Anyone convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Anyone convicted of filing a false return is subject to a prison term of up to three years and a fine of up to $250,000."

happy mining folks, Enjoy your pathetic profits or losses and risking on catching your house on fire and be sent to prison.

Ok FUDlord. I filed my taxes last week and paid my taxes on mining profits minus electricity costs and hardware. The IRS does not currently have much in the way of defining how crypto is to be taxed yet. So pay capital gains on your profits and it is done.

Mining is still profitable unless you are like lunobird who either is terrible at it or missed the bus on it and is just salty. Probably just trying to deter noobs to keep difficulty low.

Yep you did your taxes wrong, You need to re-file, The Irs does have clear definition on how crypto mining is taxed. I suggest you hire an accountant and pay them some big bucks to fix your mess up. Its considered income on the day its mined and addition taxed as capital gains if you sell it.

As mentioned by got-miner and also a publication from the irs on guidelines
https://www.irs.gov/pub/irs-drop/n-14-21.pdf

"Q-8: Does a taxpayer who mines virtual currency (for example, uses computer
resources to validate Bitcoin transactions and maintain the public Bitcoin
transaction ledger) realize gross income upon receipt of the virtual currency
resulting from those activities?
A-8: Yes, when a taxpayer successfully mines virtual currency, the fair market value
of the virtual currency as of the date of receipt is includible in gross income. See
Publication 525, Taxable and Nontaxable Income, for more information on taxable
income.
Q-9: Is an individual who mines virtual currency as a trade or business subject
to self-employment tax on the income derived from those activities?
A-9: If a taxpayers mining of virtual currency constitutes a trade or business, and the
mining activity is not undertaken by the taxpayer as an employee, the net earnings
from self-employment (generally, gross income derived from carrying on a trade or
business less allowable deductions) resulting from those activities constitute selfemployment
income and are subject to the self-employment tax. See Chapter 10 of
Publication 334, Tax Guide for Small Business, for more information on selfemployment
tax and Publication 535, Business Expenses, for more information on
determining whether expenses are from a business activity carried on to make a profit. "

After reading around and watching some youtube videos I ended up finally incorporating my own business and then applying for S Corporation status with the IRS. This has been really great. First of all, it forced me to be more accountable for all expenses which are accounted for BEFORE paying any profit. Also, profits up to a reasonable salary are paid as a salary which also counts as an expense! Now, when you really get to be a baller miner and are bringing in so much of that crypto gold that you exceed a reasonable salary... let's say more than $80K (which is taxed at employment tax rates), then you pay yourself a distribution above and beyond the reasonable salary which is taxed at the higher capital gains rate.

So for the year I mined before this, I just classified the business as sole proprietorship and accounted for expenses than paid taxes on capital gains. The S Corp is a little more complicated but it pays off if you end up in a bull market situation or happen to be lucky enough to rake in huge profits on some moon coin.

edited to add: I still use tax tracking programs (called bitcoin.tax) to have an accouting of coin values in case I get audited.

Now... of course all this totally defeats the privacy nature of what we find so likeable about crypto currencies. However, it is worth mentioning the same can be said for fiat. But with crypto at least the privacy options are more technologically advanced and still possible to use privately for the tech savvy crypto dude.