Replies

Vermont Lt:
They trade it as property. What is the big deal. I track when I buy them, and I track when I dispose of the asset. Just like I do with stocks, business assets, and, if I were ever to buy gold and silver, bullion.

Errant:
As long as you are buying and selling them, it isn’t an issue. It’s when you’re mining them that creates issues. For instance, the value at the time they were mined. Who’s to say what the value was (i.e., which exchange value at the time). Seems to me the proper way to handle that would be to tax the asset at time of sell, instead.

I tend to agree that the record keeping is typical of what is necessary for investments. And while I agree it would be more convenient to tax mining gains at time of sale, the mining operators will just start issuing statements to hashers indicating the USD value based on some consistent price source. In fact, I think this will be required under the IRS rules.

Businesses and investors are used to dealing with these rules and will handle bitcoin as an investment in stride. The real problem is that users of money do not regularly deal with these issues. This will kill consumer adoption of Bitcoin as an everyday payment method.