Mining Eth and taxes

TruthchanterTruthchanter Posts: 494Member ✭✭
I'm curious how taxes apply to mining eth. Do I have to file the usd value of the eth i mine as income tax?

On the other hand, if I have a job and convert the usd into eth (or btc/any cryptocurrency), would I still have to pay income tax considering the net gain of usd (after converting to btc) would be lower than the threshold value to pay tax on income (like 6k usd i think)?

Comments

  • nathannnathann Posts: 72Member
    I would think unless your over that threshold your fine? Im interested also.
  • CalivetCalivet Posts: 194Member ✭✭
    I think I read somewhere that cryptocurrency is not consider assets but they are consider property. Not sure this forum would be the best place to get tax advice. When in doubt as a tax pro. :)
  • agent412agent412 Posts: 216Member, Moderator mod
    @Truthchanter If the government does not consider cryptocurrency to be an asset or to have monitory value, then you don't have to pay taxes for it. Now, when you transfer your cryptocurrency back into USD and withdraw it back into your bank account, that's a different story. In MY personal opinion and understanding, as long as you deposit no more than $9,999 at a time, it wont set off any red flags and should not be looked at. At least that is what my banker friend told me.
  • boysieboysie Posts: 526Member ✭✭✭
    found this also...looks good...anyone used previously?

    https://bitcoin.tax
  • TimboSliceTimboSlice Posts: 76Member
    edited August 2016
    From what I understand from a mining perspective, mined coins should be taxed as income in addition to whatever you make from your day job or primary income source (assuming it isn't mining). Then if you hold coins and the value goes up, you have to pay tax on the capital gains. So miners get doubly screwed, at least in the US. However, if you set yourself up as a "business" then you could subtract operating costs (electro) and depreciation on GPUs and other gear before figuring out taxable income, but that get's even more complicated. The article that fuchs_it linked to is very good, although the information about SAR filings is slightly inaccurate, but banks are very skittish about anything to do with Bitcoin.
    For most small operations though, as long as your not cashing out large amounts at a time and buying new cars or something ridiculous, you should be able to go unnoticed.
    agent412 said:

    @Truthchanter If the government does not consider cryptocurrency to be an asset or to have monitory value, then you don't have to pay taxes for it. Now, when you transfer your cryptocurrency back into USD and withdraw it back into your bank account, that's a different story. In MY personal opinion and understanding, as long as you deposit no more than $9,999 at a time, it wont set off any red flags and should not be looked at. At least that is what my banker friend told me.

    You're thinking of a Currency Transaction Report (CTR), which is a report for any cash transaction over $10,000.00. If you do a bunch of transactions at just under that amount, regardless of if being ACH or cash, it will look like you're trying to avoid the CTR and that will definitely set off red flags.


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