Quote from: sykal on March 26, 2014, 03:51:28 AM

Quote from: amspir on March 26, 2014, 03:45:26 AM

Quote from: sykal on March 26, 2014, 03:30:31 AM

So what happens when you sell? You have accumulated coins over the months, but how do you know which particular coins you are selling? Maybe you're selling 5% of the coins you mined at $600, 2% of the coins mined at $630, 6% of the coins you mined at $510

Do you see where I'm going with this?

Those amounts are regular income taxed at regular income rates. Your mining pool, if complying with US law, is required to report these transactions to the IRS if they exceed $600 during the year.

The profits that you gain on holding onto them are taxed at a lower capital gain rate. Your exchange, if complying with US law, will have to report the sale of your of your bitcoin if it exceeds $600 during the year.

If the IRS audits you, you will have to come up with documentation that explains the reported transactions.

That doesn't really tackle my point regarding that you don't know what your gains are, because you don't know which coins you are exactly selling. If they are all fractional-mined at different values, you are getting profits or losses depending on WHEN they were mined. There is no way to track that information.

This isn't like stocks where you get a nice report from your broker for the exact shares you owned, and which block you sold at EOY.

Years ago we didn't have tax programs that downloaded all of that data directly from our brokers.

A capital gain is a capital gain. I don't think the IRS much cares if it is a pain in the ass for you to calculate.