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.
You only pay capital gains on the $40 profit as a capital gain (in your specific example case). This applies regardless if you exchanged your bitcoin for fiat or if you exchanged your bitcoin for $450 worth of goods/services (your selling price would be the fair market value of the goods/services that your purchased).