I am confused about bitcoin taxation and mining, I mined coins back in 2011, when they were $7. They matched my costs of hardware and electricity. Are they both income and capital gains (when I sell over a year later)?
Yeah, I'm kind of confused on this too. I mined a few years ago, played around with the coins a bit (lost a few), and have left them in a wallet since.
So, technically I pay the taxes on them in 2011 as income tax (when I 'mined' them), at the price I mined them at, and then I will pay the difference between that price, and the price I sold them at as capital gains?
Can anyone else in a similar situation chime in here?
I think you would need to refile your 2011 taxes, recognizing the income (and probably deducting some of your mining costs, but it isn't obvious that would be 100%). If you sold them that year, you would also figure the capital gain or loss.
In a later year, you would list the capital gain or loss.
