Hi everybody i really hope someone could help me out with this situation. I know that i have to pay taxes once i cashout my bitcoin (shame i have to do so, I'd rather buy stuff with bitcoin) but do they tax just the capital gain or the whole price of bitcoin? Ex. I bought 1 BTC priced at $400 then i sell said BTC at $450, Do i pay tax on the whole $450 or just the $50 profit i earned?
Also what about mining? like if i mined 1 BTC that was worth $450 the day i mined it, and and then sell it at $490 do i pay the whole $490 as income tax and then another tax for the $40 profit as capital gain?
Someone please help me out as i am confused with all this nonsense.
For trading, it should be straight forward. You would have to pay capital gains only on your profit. That might be taxed at some concessional rate or may even be exempt from taxes, depending on your jurisdiction.
Mining is different. In your example above, I don't think you should be paying tax on $490 of income and $40 for capital gains, because it is double taxation. Common sense tells me that you should pay income tax on $490, but that would again depend on which country you are in.