Tax on mined bitcoins

Google verynoob12
Dec 27, 2017 28 Comments

Let's say I am able to mine a btc block that gets into the consensus and I want to pay all due taxes on the money I make from it. How exactly do I go about that? How do I declare I just made a pretty good amount of money out of nowhere? Do companies like Coinbase help with that?

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TOP 28 Comments
  • Facebook public
    Rofl
    Dec 27, 2017 12
    • Google verynoob12
      OP
      It's the holy book with most influence in the society I live in, I guess it's an obvious choice
      Dec 28, 2017
    • Intuit nilops
      What society is influenced by the Bible? Are you in Vatican City or something? Surely not the US...
      Dec 28, 2017
    • Google verynoob12
      OP
      lol
      Dec 29, 2017
    • Genentech icqJ06
      I get it's an obvious choice, but why the only choice? If you are going to restrict yourself to just one book, how is your mind more open than the religious fanatics that only read one book? In other words, since you have already broken from the shackles of your assigned religion, why not see what others are about, and how their choices and behaviors are influenced? You are likely restricting yourself to a bubble if you are only surrounded by the followers of one religion.
      Dec 29, 2017
    • Google verynoob12
      OP
      I read the bible trying to understand why christians think the way they think, I don't follow any philosophy from it. When I read it I was a teenager and living in a country with pretty much no religious diversity so the bible was the only reference I needed. Now I live in the US and it would certainly be useful to learn more about other religions but I'm not a teenager with lots of free time anymore.
      Dec 29, 2017
  • Amazon / Eng
    Hooliganss

    Amazon Eng

    BIO
    Engineer at AWS
    Hooliganssmore
    It looks like IRS is going after endpoints where bitcoin gets converted to USD. So yes, I believe Coinbase helps with taxes, as does any other major bitcoin marketplace.
    Dec 27, 2017 4
    • Google verynoob12
      OP
      Sure, but how do I declare where those coins I sold came from in the first place? Do I provide the block hash somehow?
      Dec 27, 2017
    • Amazon / Eng
      Hooliganss

      Amazon Eng

      BIO
      Engineer at AWS
      Hooliganssmore
      Oh, for that I’m not sure. Though, it poses an interesting question. I’m going to ask around.
      Dec 27, 2017
    • Intuit
      sqrrootof1

      Intuit

      BIO
      Arghhb
      sqrrootof1more
      The IRS views bit coin as property. When you produce propery, in general, the money you spend in producing the property becomes its "basis". The basis gets subtracted from the sales price in computing the profit you are taxed on. This is analogous to someone spending money on building a house. They are not taxed on the sales price of the house but instead taxed on the sales price in excess of what it cost to build it. If you purchased a computer solely for mining, it Can likely be deducted
      Dec 27, 2017
    • Intuit
      sqrrootof1

      Intuit

      BIO
      Arghhb
      sqrrootof1more
      Long story short, you are considered. Self employed and need. To look at form 1040 ES . self employed ppl file estimated payments 4 times a year
      Dec 27, 2017
  • Apple dddevnull
    8 bitcoins will buy you a nice studio apartment in Dubai.
    Dec 28, 2017 0
  • Square ruby
    I believe the simplest course of action is to immediately sell the bitcoins on coinbase and get them to produce the tax documentation. You'll report it with a basis of zero because you didn't buy them.

    Of course, consult with a cpa, don't trust strangers on blind to know the tax law...
    Dec 28, 2017 0
  • Microsoft / Product bruted
    There is market for people to pay you in cash or as a 'gift' for mined Bitcoin. Both sides want to avoid taxation and a paper trail
    Dec 28, 2017 5
    • Yahoo / Eng wJea12
      Don’t do that, it’s illegal. People have been arrested by undercover officers.
      Dec 28, 2017
    • Microsoft / Product bruted
      That's kind of a stupid response. Nothing about trading bitcoin for cash is illegal until you do not pay your taxes. And undercover officer cannot prove you won't pay your taxes when you exchange
      Dec 28, 2017
    • Microsoft / Product bruted
      Either way, even if you do want to pay your taxes, there is a premium to selling Bitcoin like this, so you will make over market value
      Dec 28, 2017
    • Yahoo / Eng wJea12
      Ok anything over 10k is illegal. The transaction has to be reported otherwise you start avoiding money laundering laws
      Dec 28, 2017
    • Google 💩 poo poo
      You're thinking of a SAR (suspicious activity report) filled out by banks when someone deposits over 10k in cash. Even then it's optional as tons of people deposit that much (and more) every day. I don't know where you got your information from, but _any_ suspicious activity could be seen as potential money laundering. People need to report whatever taxes are due on their tax forms come April, BTC or not.
      Dec 28, 2017
  • Yahoo / Eng wJea12
    Sell them on coinbase after a year and you’ll have to pay 15% of the total amount since cost basis is 0
    Dec 28, 2017 1
    • Microsoft dingo
      Mining counts as regular income. They tax it on the day its mined. IRS put out a notice about it.
      Dec 29, 2017

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