Quote from: Peter R on March 27, 2014, 04:26:05 PM

...

From my discussions with various community members, I think the general feeling is that hashers are paid for the services they provide to a mining pool whereas miners create bitcoins based on their own initiatives and the acceptance of their efforts by their peers.

...

Based on existing laws, I believe miners (but not hashers) are free to recognize gains on any coins they create when a gain is realized, and a court challenge would rule in their favour.

Quote from: SlipperySlope on March 27, 2014, 05:09:11 PM

Yes, I agree with this observation. I have legacy coins that I CPU solo-mined back in 2010. I figure my tax basis is essentially zero dollars for these.

I emphatically disagreed as follows and if you don't rush to report, you are just increasing your eventual pain. And thus selling pressure coming now before April 15 filing deadline as miners scramble to sell coins to raise revenues to pay taxes that are due immediately! What ever China news you all are referring to may be incidental.

Quote from: AnonyMint on March 26, 2014, 05:10:24 PM

Quote from: AnonyMint on March 26, 2014, 03:30:29 PM

Quote from: AnonyMint on March 26, 2014, 03:28:39 PM

The coinbase transaction sends you coins from the network, so this must be reported as income.

When you dispose the coins, you must report capital gains (or loss).

Quote from: jbreher on March 26, 2014, 05:01:01 PM

Quote from: casascius on March 26, 2014, 04:00:08 PM

I saw my accountant long ago and discussed Bitcoin at length, and our assumptions based on existing law were pretty much exactly in line with this IRS guidance.

Can you explain to me the logic behind the taxable event of block creation by miners? AFAIK, entities that mine physical gold don't have a taxable event when they pull it from the ground, do they? Isn't the taxable event when they sell the gold?

My rationale is the network of all users paid the coins to you in exchange for you providing a mining service.

Besides I wouldn't risk it on some flimsy interpretation you prefer, because fees and late penalties could be tacked on later. The IRS will always rule for the interpretation that nets them the most tax soonest. Good luck trying to defeat them in tax court.

Btw, I had this interpretation immediately upon learning of Bitcoin. It was obvious to me, well maybe that is because my sister and grandfather were both CPAs, my father is an attorney, and I self-taught myself double-entry cash and accrual accounting and tax accounting (when my sister and grandfather died).

Quote from: Peter R on March 27, 2014, 04:26:05 PM

it would mean that mining on P2P pool imposes no reporting requirements on you, whereas mining at a pool like GHash.io does.

Note my point above applies also to mining on a P2P pool. Also I hope you are aware that P2P pools are vulnerable to "share withhholding attack" (don't conflate that with my "transactions withholding attack") which was detailed in a whitepaper by Meni Rosenfeld in 2011 and Meni Rosenfeld's oblivious share fix couldn't be applied to P2P pools:

https://bitcointalk.org/index.php?topic=339902.msg3715641#msg3715641
https://bitcointalk.org/index.php?topic=339902.msg3719385#msg3719385

So for an anonymous coin you can forget P2P pools, because they would surely be attacked by the governments.