Sorry for the late reply. Tax season and all...
How can I tell how much $ to pay in taxes when I receive a bitcoin and all the exchanges say something different?
What if there's an exchange trading at $0.01 (that nobody sells on lol) and another trading at $100, can I calculate the tax from the $0.01 one?
Why not just pay taxes from the income you made by selling the bitcoin?
The IRS accepts fair market value. The exchange that displays a price quote of $0.01 is neither fair nor market value. The fair value of anything is the value that two knowledgeable and willing counterparties are able to trade without being forced to trade. There have been no IRS precedents on BTC, but I'm sure the first BTC audit, whenever that happens, the IRS will use the MTgox price on the date of your trade as the fair market value of your trade.
While the IRS has not given specific guidance on BTC as of today, they likely will do so in the next 6 years, and there may be significant advances in forensic technology in this period. If a taxpayer gets an audit notice 6 years from now, and has a tax position that is overly aggressive there can be substantial interest and penalties, even exceeding the disputed amount.
I am not convinced that BTC mining is like creating artwork for several reasons. Artwork does not have active markets that can be used to determine price at the date of creation. While art involves assembling supplies previously owned by the artist, bitcoin mining involves a point in time when the miner has control over something they did not previously possess. And, perhaps most telling, there is a matching principle in accounting that income and related expenses should be recognized together. So I doubt that deducting electric and equipment expenses now while deferring recognition of revenue will be considered to be consistent. Then there is IRC83 which requires that deferred compensation (such as stock and options) be recognized at the fair market value when title transfers, not when the investment is sold. And IRC988 requires income to be recognized when foreign currency is received for goods or services.
Regarding fair market value, I think revenue ruling 59-60 allows consideration of exchanges other than MtGox, as long as the exchange is active, the valuation method is used consistently and satisfies all other applicable rules.
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