Quote from: greyday on November 24, 2018, 09:25:42 AM

Quote from: lunobird on November 24, 2018, 04:00:03 AM

from turbo tax USA laws
"When you mine the coins, you have income on the day the coin is "created" in your account at that day's exchange value."

You're not really wrong, but:

A) whether or not they are correct, NEVER RELY ON TURBO TAX FOR INFORMATION. If you earn more than $50K/year, they are a bad choice, and if your supplemental income from mining is substantial, get an accountant.

B) there is absolutely no way that the IRS is asking for value at time of realization, because it would bankrupt them to calculate that rate for a handful of miners, much less all. Market fluctuations are constant, and you mine in increments every second. No way they can determine that, and no way they can audit every single miner to determine fraud. Again, talk to an actual accountant about what you may or may not owe.

For anyone wondering, here is the actual IRS guidance: https://www.irs.gov/pub/irs-drop/n-14-21.pdf There is a shitload of confusion on this, and this is unsurprising considering the guidance from the IRS is over 4 years old and only 7 pages long. It doesn't even begin to address the current mining or trading environment. It is indeed taxed by fair market value on the day you receive it. It is also taxed with capital gains and losses when traded. Its easiest to think of it like this scenario: You have a business with various customers (the mining pools). Instead of payment in cash you agree to get paid in comic books. Now obviously you can't operate a business and have zero tax liability just because you aren't getting paid in dollars. I'm sure this trick has been tried numerous times in history. So your tax liability is based on the market value of those comic books at the time of payment. When you sell those comic books or trade them for other comics, you are charged capital gains if the comics you sold appreciated in value, and can claim capital loses if they have gone down further. Of course there is also tons of write-offs like hardware, labor, electricity,etc.

The bottom line is that if you have a mining business, keeping your earnings in crypto is pure speculation. Leaving it all in is putting all of your eggs in one basket. For any of this stuff to be applicable to the forum members, I would say they would truly have to have a mining business. Like the guy who built a data center or someone with employees. Otherwise there is really no way for the IRS to know, which is the beauty of crypto, it skirts the system. But like everything, there is a paper trail so you might have to deal with getting creative when cashing out.