Post
Topic
Board Bitcoin Discussion
Re: TurboTax advertises Bitcoin as a tax dodge!
by
JoelKatz
on 22/07/2011, 00:28:22 UTC
So, you should record taxable income when you mine or receive bitcoins for any purpose at the value of the bitcoins at that time.  Then, at the time you sell or use said bitcoins, and they have increased or decreased in value, you would record a capital gain/loss in the extended amount of the difference between the value of the bitcoins at time of receipt, and the fair market value of the goods/services purchased with the same number of bitcoins.
Say I play World of Warcraft and I kill a boss and get an item worth 10 gold. If the fair market value of that 10 gold is $5, do I have a taxable gain of $5? (As I understand it, the answer in the United States is "nobody knows".)