If I take a yard of fabric and make a shirt, sell it, then the “income” is taxable.
If I take a company, sell it, (equity sale) then that income is not taxable, from what I understand.
The difference is the transfer of ownership, being either ALL or PARTIAL ownership.
A shirt is a shirt that no one expects it to appreciate in value. But, if I made or even bought a thousand shirts at $10 and sold them for $20, I’d have a taxable event.
Bitcoin miners will have to reduce their cost basis by calculating their costs to produce them. Their time, effort and computing power usage, etc etc etc. They can easily claim that their costs have exceeded their sales price.
Do you think the IRS is going to set some standard for “Production costs”?
From my perspective, Bitcoins are neither a currency nor a property, in the way they define them, but a property more like a chicken, a barter tool, used to trade for other properties.
So...metals are property too.
No, I see "mining" as taxed like any other business where the owner has skin in the game. The miner will not be able to take out his own labor, only expenses for equipment, salaries, repairs, electrical costs, and any other associated costs for producing coins.
Where I see a problem is as you observed: "Bitcoins are neither a currency nor a property". I suggest they are a little of both. IMO, they should be treated like a currency by those who acquire them for convenience and use them for purchases while treating as an asset for those who trade or mine them.
I'm not sure how you keep the two separated. It is indeed a problem looking for a solution.