Topic: Reporting bitcoin mining earnings to IRS, Post FinCEN. - page 2. (Read 6885 times)
Reporting puts you in the spotlight. Unless you have an operation of similar size of Mtgox DONT report. Keep under the radar, the world as we know it wont be the same in 5 years due to Bitcoin anyway. Watch Pandoras box unleash itself towards the world and change it completely. Fincen or whatever their name is wont matter as a power entity by then.
The fincen guidelines are not related to taxes. Both before and after the guidelines, U.S. citizens and residents are required to report all earnings, including those related to bitcoin.
Identifying yourself to any 3 letter agency as a Bitcoin miner is only asking for trouble down the road.
You really think they wouldn't try a coordinated attack against miners?
Bitcoin is the greatest threat to the single most powerful organization on the planet. Do you really think they won't use every tool at their disposal to protect their interest?
Revealing yourself as a minor is not displaying much foresight.
Don't do it.
If you must move wealth out of Bitcoin, move it to Gold, Silver, Platinum... and avoid all the headaches moving to fiat would cause you.
You really think they wouldn't try a coordinated attack against miners?
Bitcoin is the greatest threat to the single most powerful organization on the planet. Do you really think they won't use every tool at their disposal to protect their interest?
Revealing yourself as a minor is not displaying much foresight.
Don't do it.
If you must move wealth out of Bitcoin, move it to Gold, Silver, Platinum... and avoid all the headaches moving to fiat would cause you.
Another thing to consider is that mining equipment depreciates. So you don't write off the full purchase price in the year you purchase it. I'm not an accountant, but I think it should depreciate faster than an automobile. Someone needs to ask an accountant what the max depreciation rate on capital expenses is. I know there are categories, like on buildings its 15-20 years and cars is 5-10, but mining equipment it should be more like 1-3 years. Can you make up a category or do you need to use a pre-defined one?
When I did GPU mining the cards only lasted 12 months or so before I felt they were getting worn and sold them off. I'm hoping asics don't wear out so fast because no built-in fan. Depreciation should be less % per year too.
When I did GPU mining the cards only lasted 12 months or so before I felt they were getting worn and sold them off. I'm hoping asics don't wear out so fast because no built-in fan. Depreciation should be less % per year too.
Bitcoin could be considered a currency. That's one thing to look at since the FinCEN guidance makes it pretty clear that a "de-centralized virtual currency" is going to be treated much like a real currency in future rule making effort at FinCEN.
That sucks for tax purposes, unfortunately, treated as income. I think the best way to go is to set up a business and run all electricity costs and capital costs through that business, treating exchanged coins as revenue. Depending on the structure of the business, can be taxed differently. Could attempt to be taxed as dividend or capital gain that way? Or income as pass through?
That sucks for tax purposes, unfortunately, treated as income. I think the best way to go is to set up a business and run all electricity costs and capital costs through that business, treating exchanged coins as revenue. Depending on the structure of the business, can be taxed differently. Could attempt to be taxed as dividend or capital gain that way? Or income as pass through?
i like that idea, i have an LLC that has been active for years now that i use for my IT consulting. I will include it under that possibly. And also list my hardware and power costs as a capitol loss.
Hello all,
Its tax time for alot of us in the US. I told my CPA about my ventures into Bitcoin and he is stating that i should file my earnings for 2012. Seems the IRS may come at people years from not claiming they needed to file in retrospect and owe alot of monies.
What is everyone else doing?
Its tax time for alot of us in the US. I told my CPA about my ventures into Bitcoin and he is stating that i should file my earnings for 2012. Seems the IRS may come at people years from not claiming they needed to file in retrospect and owe alot of monies.
What is everyone else doing?
If in 2012 you exchanged bitcoin for dollars, report that. Otherwise if it is still in bitcoin, you can't really report it, cause the price is changing so much that you can't really give it value.
Yes that is how i feel too, trying to average difficulty and BTC to USD price over 5 months would be hard.
I am also thinking about listing my electricity, and mining rig parts as loses for this 2012. As this year if i do pull BTC out for USD then there will be big capital gains from when i earned most of the BTC back in late 2012.
Bitcoin could be considered a currency. That's one thing to look at since the FinCEN guidance makes it pretty clear that a "de-centralized virtual currency" is going to be treated much like a real currency in future rule making effort at FinCEN.
That sucks for tax purposes, unfortunately, treated as income. I think the best way to go is to set up a business and run all electricity costs and capital costs through that business, treating exchanged coins as revenue. Depending on the structure of the business, can be taxed differently. Could attempt to be taxed as dividend or capital gain that way? Or income as pass through?
That sucks for tax purposes, unfortunately, treated as income. I think the best way to go is to set up a business and run all electricity costs and capital costs through that business, treating exchanged coins as revenue. Depending on the structure of the business, can be taxed differently. Could attempt to be taxed as dividend or capital gain that way? Or income as pass through?
my big worry is if i do not report now, they may come at me 5-10 years from now with interested owed.
If Bitcoin is still worth anything 5-10 years from now and you own some now you'll likely be able to manage that risk by just moving outside their jurisdiction.Unless the OP renounces citizenship (not a bad idea right now), moving does nothing except offer a potential 95K tax credit if you live 330 days (or something like that) outside the USA.
The only country on the planet that taxes its citizens regardless of where they live.
...the land of the free
yeah a shame the US is the world police at this point.
You sold bitcoins this year or last? My condolences. You should have already had all your tax questions answered before you sold them. Now you already did some financial transactions without thinking about how it was going to look on your taxes until after you did it? Generally not a good thing to do with large amounts of money.
I am not going to give you specific tax or legal advice.
Generally speaking, a bitcoin miner's plan, especially considering the current regulatory uncertainty, should include documentation of expenses and a talk with a lawyer who can tell you how to legally convert your coins into the currency of your choice if you are really afraid of (unlikely this year) potentially enforceable regulation coming in this hard on the heels of the guidance.
I am not going to give you specific tax or legal advice.
Generally speaking, a bitcoin miner's plan, especially considering the current regulatory uncertainty, should include documentation of expenses and a talk with a lawyer who can tell you how to legally convert your coins into the currency of your choice if you are really afraid of (unlikely this year) potentially enforceable regulation coming in this hard on the heels of the guidance.
I havnt sold any of my coins luckily, i bought 7btc back when they were worth $5 each in July of last year. But i have been mining non stop since then, so i take it the appreciation from July till Jan 1st would be taxable as capital gains? And can i write off the electricity used for mining as an expense?
i found a great wiki page on tax compliance but it dosnt seem to be updated since the US Treasury made their statement last week. https://en.bitcoin.it/wiki/Tax_compliance
And what about claiming my mining as a "hobby"? Since i have no exchanged any BTC to USD?
EDIT: I saw another thread where someone had the idea of claiming earnings as "gambling" only if over $5000... Since Bitcoins are not considered a true currency by the US, couldnt i claim that i was gambling by using GPU power to harvest coins and holding on to them? https://bitcointalksearch.org/topic/m.1627264
my big worry is if i do not report now, they may come at me 5-10 years from now with interested owed.
If Bitcoin is still worth anything 5-10 years from now and you own some now you'll likely be able to manage that risk by just moving outside their jurisdiction.Unless the OP renounces citizenship (not a bad idea right now), moving does nothing except offer a potential 95K tax credit if you live 330 days (or something like that) outside the USA.
The only country on the planet that taxes its citizens regardless of where they live.
...the land of the free
You sold bitcoins this year or last? My condolences. You should have already had all your tax questions answered before you sold them. Now you already did some financial transactions without thinking about how it was going to look on your taxes until after you did it? Generally not a good thing to do with large amounts of money.
I am not going to give you specific tax or legal advice.
Generally speaking, a bitcoin miner's plan, especially considering the current regulatory uncertainty, should include documentation of expenses and a talk with a lawyer who can tell you how to legally convert your coins into the currency of your choice if you are really afraid of (unlikely this year) potentially enforceable regulation coming in this hard on the heels of the guidance.
I am not going to give you specific tax or legal advice.
Generally speaking, a bitcoin miner's plan, especially considering the current regulatory uncertainty, should include documentation of expenses and a talk with a lawyer who can tell you how to legally convert your coins into the currency of your choice if you are really afraid of (unlikely this year) potentially enforceable regulation coming in this hard on the heels of the guidance.
From what ive heard you only need to report (register with FinCEN) if you mine BTC and convert to USD. Does the same go for reporting on taxes? I have not converted any bitcoins to dollars, only traded for services and products.
my big worry is if i do not report now, they may come at me 5-10 years from now with interested owed.
If Bitcoin is still worth anything 5-10 years from now and you own some now you'll likely be able to manage that risk by just moving outside their jurisdiction. Protip : Dont incriminate yourself.
my big worry is if i do not report now, they may come at me 5-10 years from now with interested owed.
Protip : Dont incriminate yourself.
Some people are just selling bitcoins for cash or other items so no one else will know about it.
Hello all,
Its tax time for alot of us in the US. I told my CPA about my ventures into Bitcoin and he is stating that i should file my earnings for 2012. Seems the IRS may come at people years from not claiming they needed to file in retrospect and owe alot of monies.
What is everyone else doing?
Its tax time for alot of us in the US. I told my CPA about my ventures into Bitcoin and he is stating that i should file my earnings for 2012. Seems the IRS may come at people years from not claiming they needed to file in retrospect and owe alot of monies.
What is everyone else doing?
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