Well, 2 days ago I finally got my answer. After asking the 5 longest-working members at that particular H&R Block location AND after calling the IRS, the lady said that Bitcoin is a hobby. She knows that I buy precious metals with Bitcoin, knows that I have money in accounts all over the globe, and knows that I have conducted business deals and have provided services specifically dealing in Bitcoin. I even showed her an old TradeHill check of some of my profits.
Long story short, I don't need to file any taxes this year
But then again, I was kinda hoping to write off some of my computer equipment as a business expense.
Long story short, I don't need to file any taxes this year
But then again, I was kinda hoping to write off some of my computer equipment as a business expense.Your statements and conclusion don't match.
If the IRS considers your action a hobby they STILL want a cut of any profits BUT you can't deduct any losses, depreciate hardware, carry forward losses, etc like you can with a business. Essentially it is a worst case scenario.
I have my mining operation filed as an LLC (to depreciate hardware, account for my labor costs, etc). We will see if IRS rejects my tax return.
