Has any freeper involved with bitcoins, found an accountant that can do your federal tax return addressing their bitcoins?
I ask because we can’t find one. Care to share by private freep-mail?
I would think treating any bitcoin transaction the same as you’d treat a foreign exchange transaction would be appropriate. In most cases, you ignore FX transactions because you’re just spending after tax dollars, converting them first to FX before spending them in, say, France.
However, whatever the rules for speculating in a foreign currency are, i.e., buying 1,000 Euros with dollars, sitting on them for a time, then selling them at a profit or loss in dollars, would seem to apply. That is, I’d look to the tax rules for investing in foreign currencies.
One thing’s sure. If you own a bunch of bitcoins and sell them at a huge profit, Uncle Sam is going to want his cut. Whether he views it as a long-term gain or a short-term gain is another issue, as is whether he can ever discover the fact that you made the transactions at all.
What is the problem/issue you are having calculating what you owe? Have you even had any Bitcoin transactions? If you invest/trade and realized a profit once converted to dollars, it’s a capital gain. If you’ve mined them and sold/traded them for something for your personal use, it’s income. What’s so hard about calculating taxes on that. Keep good accurate records so you can determine your basis/expenses and then profit/income which is what is taxed. At least you have another two months to figure it out, if you even had a transaction in ‘13.