Quote from: David Rabahy on March 31, 2014, 02:29:29 PM

An artist creates a work of art. The work of art is property. Does the artist owe income tax on the day the piece of art is complete? I doubt it. Creating the accepted block of Bitcoin transactions is a beautiful work of art.

An artist sells a work of art. The artist owes income tax. A Bitcoin miner sells/uses the block reward. The miner owes income tax.

A miner mines a lump of rock out of the mine. Little does the miner know there's a piece of gold inside the rock. Does the miner owe income tax right away? Later the miner breaks open the rock and finds a shiny piece of gold-colored metal. Does the miner owe income tax yet? The miner tests the metal and discovers it is gold. Now does the miner owe income tax? The miner doesn't have the money to pay and would have to sell the gold in order to have enough money to pay the tax.

Yeah, that's the way it should work but not the way the IRS set things up.

Does anyone know if I have to form an LLC to claim my mining expenses for equipment and electricity, etc... Or is there a way to claim them on a normal return using Turbo Tax. I'm thinking under self employment or a sole proprietorship. I welcome your thoughts....