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That's what I thought too. It didn't make sense at the time, and still doesn't, but the TaxBit forms showed a tax on both the payouts and the BTC->USD transacti

That's what I thought too. It didn't make sense at the time, and still doesn't, but the TaxBit forms showed a tax on both the payouts and the BTC->USD transaction. There was probably something I could have done to remove one of them, but I don't know enough about capital gains taxes to figure it out, and paying a professional would have cost as much as the tax I was trying to avoid.

mminer237 4y ago
You would get taxed twice, but it wouldn't stack. If you earned $15 of Bitcoin, you'd get $15 added onto your tax bill at payout. Then if Bitcoin jumped to $20 and you sold it a couple months later, you'd have the $5 difference of short-term capital gains taxes added on then.
bombcar 4y ago
You often have to correctly document each step (and I don't know if the law is "smart" enough yet to allow you to deduct the electricity charge unless you set the whole thing up as a 'company') and allow it to know the "cost basis" for each step.
yebyen 4y ago
When you count your income from mining, you need to create an equal cost basis at that time. The value of the coins when you received them is your cost basis. If you didn't do that, you paid way too much in taxes. (If you hold them for longer than a year before you sell them, you can be paying long-term capital gains which is cheaper than short-term. Unless you're in losses in which case it doesn't matter.)
dboreham 4y ago
Just to clarify: there's no such thing as "US crypto taxes". There are taxes, levied on things like income and capital gains. Crypto transactions can constitute taxable events same as trading any other kind of asset can. In this case it sounds like this TaxBit software is buggy / not full featured and shouldn't be relied upon. Same applies in some cases to TurboTax also, but you'd think it would be possible to handle such a simple scenario correctly.

mminer237 4y ago

You would get taxed twice, but it wouldn't stack. If you earned $15 of Bitcoin, you'd get $15 added onto your tax bill at payout. Then if Bitcoin jumped to $20 and you sold it a couple months later, you'd have the $5 difference of short-term capital gains taxes added on then.

bombcar 4y ago

You often have to correctly document each step (and I don't know if the law is "smart" enough yet to allow you to deduct the electricity charge unless you set the whole thing up as a 'company') and allow it to know the "cost basis" for each step.

yebyen 4y ago

When you count your income from mining, you need to create an equal cost basis at that time. The value of the coins when you received them is your cost basis. If you didn't do that, you paid way too much in taxes. (If you hold them for longer than a year before you sell them, you can be paying long-term capital gains which is cheaper than short-term. Unless you're in losses in which case it doesn't matter.)

dboreham 4y ago

Just to clarify: there's no such thing as "US crypto taxes". There are taxes, levied on things like income and capital gains. Crypto transactions can constitute taxable events same as trading any other kind of asset can. In this case it sounds like this TaxBit software is buggy / not full featured and shouldn't be relied upon. Same applies in some cases to TurboTax also, but you'd think it would be possible to handle such a simple scenario correctly.