I was a CPA for over 10 years working in an International Firm
and an NYSE listed bank. I am also a miner. I've been a corporate
CFO and COO over 20 years since then….

For buying on an exchange, the price you pay for a bit coin is your cost.
the price you sell it at is your proceeds. the difference is your gain or loss.
If you hold it over a year, use schedule D, long term capital gain. Else,
use short term capital gain. This is a very reasonable approach. If you do
this offshore, you can probably do it without being found out, but the US policy
is to tax its citizens no matter where they make income. I don't agree with that
but it is what it is. Proceed as you see fit.

If you mine, its less clear. To me, my cost of mining equals
Cost of mining equipment / estimated coins to be mined = $cost per coin mined.
There are some details, but I will leave those to you to ponder...

sales proceeds are realized when sold. Ordinary income rates would apply.

However, if no sale occurs, no dollars go into your bank account. That implies
no gross income (as defined by the IRS). At the same time, your costs associated
with mining those coins probably should not be deducted before they are sold, instead
capitalized…(e.g. not deducted)  some of you may want to deduct the costs before the proceeds arrive,
but the IRS would probably want to ding you on that… Can't say I'd blame you, but
its not what I would do. on the other hand, if its not a lot of exposure, go for it…see what happens :-)

the interesting side is if you buy and sell bit coin for alt coins or something else.
in this case, there is no US dollar realized as cost or proceeds. Take your own approach on that :-)

Barter transactions (bitcoin for bicycles, etc) -- i Think it only matters if its not a one-off transaction.
The IRS really is not in the business of going after a $1000 here or there… just not enough meat on the bone...

JD