re: Bitcoin Casinos Release 2012 Earnings

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I'm just trying to wrap my mind around how merchants would accept the currency for tax purporses. Wouldn't there have to be some type of exhcange rate before the government recognized it as a means of payment?

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Don't quote me on any of this because I'm no tax expert. Maybe poodlebrain could better answer this.

But if I buy bitcoins and sit on them while they appreciate in value, then I have to pay capital gains taxes on them when I sell them. Of course, this would require honesty since "bitcoin" is just a protocol and can't send tax documents to the IRS.

And if a business accepts bitcoin with the BitPay model I described above, I imagine they would just pay taxes based on the USD value.


Now, the more interesting question, and probably what you are ultimately getting at is this:

If a company accepts straight up bitcoins and doesn't convert them to USD immediately, how do they account for that at tax time? If the bitcoin was worth $15 USD at the time of them receiving it, but it's worth $25 when they file their taxes, how does that work? I truly don't know.