https://www.irs.gov/newsroom/irs-virtual-currency-guidance
IIRC (from reading in 2014, so don't count on me as your accountant or
lawyer, of which I am neither), according to the guidance linked in the
post above, mined cryptocurrency is to be reported as regular income at
its then current value, which becomes your cost basis for said
cryptocurrency. Said cryptocurrency is considered an asset like a stock
or commodity and should be tracked accordingly. Many cryptocurrency
users don't like this because they want it treated like cash, but the
tax laws on investment assets are very favorable vs the tax laws on
investment currency (and especially non-investment currency, where you
still must pay taxes on gains, but cannot claim losses).
On 10/26/2017 12:01 PM, Adrien Monteleone wrote:
Definitely one for both a CPA and lawyer for anyone doing any actual mining.
I’m sure someone big somewhere is already blazing this trail, and it would be
interesting to see how it is being handled on their books.
Regards,
Adrien
On Oct 26, 2017, at 9:19 AM, John Ralls <jra...@ceridwen.us> wrote:
On Oct 26, 2017, at 4:19 AM, Jean-David Beyer <jeandav...@verizon.net> wrote:
On 10/26/2017 12:21 AM, Rodney Elliott wrote:
Hi All.
If I were to purchase a cryptocurrency (say Bitcoin) with a fiat
currency recognised by gnucash (say USD), then the procedure to
record the transaction is clear - create an asset account of the type
'stock', associate it with a new security that uses the coin ticker
(BTC) and the maximum number of significant figures supported by
gnucash, etc.
What to do in the case of mining a cryptocurrency is less clear. The
BTC asset account would need to be credited with the amount of coins
mined, but then what? How do you balance this transaction, given that
no fiat currency was involved? The cryptocurrency was effectively
created out of thin air. I feel like the answer is an equity account
of some description, but I do not think that it would be appropriate
to have an equity account of the type 'stock'. Is there a tractable
solution to this problem?
If you found gold on your property and worked as a gold miner, and took
the gold as payment for your labors, how would you account for that?
Maybe it is just income paid in that alternate currency; gold in the
case of gold mining, BTC in the case of bitcoin. ???
I doubt any of us has any experience as either gold or crypto-currency miners.
It’s likely that the law varies by jurisdiction—especially in the case of
cryptocurrency where national laws now vary widely—so consult a local licensed
accountant for the right way to do it in your jurisdiction.
It would be wise also to consult a lawyer: You may need a business license. In
the case of finding gold on your property you’ll also need to establish that
you actually have the right to mine it, as some countries retain mineral rights
as national assets and in those that don’t (including the USA) deeds may have
separated the mineral rights from surface-use rights.
Regards,
John Ralls
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