I am pretty sure it is at the time of the transaction. This is no different than buying or selling stock.

Believe it or not, we've had taxes for a long time on non-dollar-but-store-of-value things whose values fluctuate over time. Bitcoin does not present any sort of radical new challenge to the tax system.

Ok, I had a feeling that would be already settled but a lot of people seem to think you should be paying taxes now and I don't see how can that can be done without knowing which of the many exchange rates to use.