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In the US mining is taxed as ordinary income at the time of receipt, meaning if you are lucky enough to mine a block, the block reward is income at that moment.
by throwawayForMe2 7y ago
In the US mining is taxed as ordinary income at the time of receipt, meaning if you are lucky enough to mine a block, the block reward is income at that moment.
- jermaustin1 7y agoThat's kind of crappy. When I build a bookshelf from raw materials, I am not taxed on the value of the bookshelf. That would be tantamount to a wealth tax. I am only taxed when I convert said bookshelf to fiat currency, or make a trade that isn't like-kind (such as trading my bookshelf for a house).
- xxpor 7y agoThe analogy does really work though. You are taxed when you sell the bookshelf for income. In the Bitcoin case, if you were able to mine coins and not pay income taxes, theoretically you could pay for everything you need while never having paid income tax. The problem is Bitcoin is a cash equivalent, sort of.
- gamblor956 7y agoThe premise of mining is that a miner is rewarded with crypto coin for the service of recording/proving/verbing transactions to the crypto ledger and essentially being the backbone of the crypto's system. Money in exchange for services rendered is income pretty much everywhere in the world. The US has already ruled on this. Portugal and much of the EU hasn't...yet, but is likely to follow the US.
- wmf 7y agoCheck out the taxation of stock options; it's equally crappy. Unfortunately for Bitcoiners there is precedent here.