Topic: 2013 US Tax Filing Questions (Read 846 times)

So I have some questions that no one seems to know how to answer.

The values below are just to give an example.

I started mining years ago and never really cashed out and kept all my crypto. Then lets say when LTC was created I converted my BTC to LTC and say I had 10,000 LTC at a price of $.03 each when I converted. Now lets say I sold all my LTC at say $10 which would be $100K. How would one go to pay taxes on this. Would one subtract say all pc hardware and electricity to mine from the past 2 years and subtract that total from the 100k. So if all hardware and electricity was $50k would I only pay tax on $50k as Income Tax or as Capital Gains Long term Holding Tax. Now what about what the IRS just said about BTC being property. Should I just pay tax on the 10k LTC that I purchased at $0.03 when I purchased them? What about all the electricity and hardware I bought in 2011 and 2012 that I never claimed since I didn't cash out. I want to proactive and not get into any trouble. These HR block people and other tax professionals don't have the slightest idea on what to do.

Or

Should I look into the possiblity of my hobby becoming a side business which I've actually been considering now for the past few months.

http://money.usnews.com/money/blogs/my-money/2014/03/31/does-the-irs-view-your-side-hustle-as-a-business-or-hobby

Everyone that I've spoken with can't give me a straight answer. Going forward is easier, but for those that held and never sold crypto years back it makes it a bit more difficult.