Quote from: MashRinx on March 26, 2014, 05:09:24 PM

Quote from: IrishFutbol on March 26, 2014, 12:22:00 PM

No. The IRS stated in their ruling that as soon as the BitCoin is mined, the miner owes taxes on: USD Value of BTC Received - Expenses to Mine. And I'd advise people to be very very very careful about what they claim are expenses.

Would you mind elaborating on this further, or maybe Mike or someone else with this experience could? I would think hardware costs and/or depreciation of that hardware as well as electrical would all be reasonable? I have a follow-up with my accountant soon and would like to have as much information in this regard as possible.

Thanks in advance.

Depends on what you're using as hardware.

If you have a mining machine that is solely used for mining and absolutely nothing else, then you can easily deduct the depreciation of the machine and the electricity the machine uses (a reasonable recalculation should work for cost of electricity). However, if you have a personal computer that you sometimes use to mine, and sometimes use to go online / watch movies / etc., you're not going to be able to deduct anything for this.

The IRS has been making a big push recently targeting business items that have personal use, which is why I'd advise against anyone trying to deduct the cost of their main computer as a bitcoin expense.