Quote from: mrabby on April 14, 2011, 12:18:31 AM

That's probably the worst reasoning I've ever heard. Income is income, and depending on the laws of your local jurisdiction, you're supposed to pay taxes on that income. If you have bitcoins, and you keep them as bitcoins, it would be just like having a pile of Euro's or pounds laying around. If you convert those back to dollars at a higher exchange rate than what you paid for them, that counts as some form of capital gains.

The argument that 'it's hard to trace, so you don't have to pay taxes on it' is the exact same argument you can make for if you get paid in cash for something. You're still *supposed* to pay taxes, and just because it's in BTC doesn't some how make it 'special.'

Everything is taxed, including your income that you claim.