Suppose I buy from a merchant who accepts bitcoin (e.g. Newegg which uses Bitpay).
Is this a taxable event? i.e. should I report my purchase to IRS?
No, not taxable.
This is how it worksYou buy: not taxable
You send: not taxable
You lose while holding or trading: not taxable
You gain: taxable.
How gain is taxedIt can deffirr from country to country. Supposing the tax is 10%
You bought $1000 worth of bitcoin.
The price increase and you have $1100.
The gain is $100
10% of the gain
10% of $100
The 10% of $100 is equals $10.