Re:I Spent A Coin (And I Liked It) — How I Bought Lunch in M...
by rprasad on Monday June 27, 2011 @02:57PM
(#2702514)
His statement is legally accurate.
When you engage in a trade transaction (as opposed to cash), the "income" from the transaction is the fair market value of the items/assets/property exchanged, at the time of the exchange.
The problem is that taxes aren't due until the end of the quarter (for businesses) or year (for individuals). Even if the value of the bitcoins has dropped, you owe taxes on the value when received. On the other hand, if the value has gone up, you don't owe any additional taxes until you use the appreciated bitcoins in another transaction.
When you engage in a trade transaction (as opposed to cash), the "income" from the transaction is the fair market value of the items/assets/property exchanged, at the time of the exchange.
The problem is that taxes aren't due until the end of the quarter (for businesses) or year (for individuals). Even if the value of the bitcoins has dropped, you owe taxes on the value when received. On the other hand, if the value has gone up, you don't owe any additional taxes until you use the appreciated bitcoins in another transaction.