In the new year, the Forbes magazine has significantly increased its coverage of bitcoin. The periodical began January with an article about the role of bitcoin in the Internet of Things and now continues with tax advice for bitcoin holders and miners.


In an article titled “Don’t Forget Bitcoin at Tax Time”, Kelly Philips Erb explains the current tax rules for bitcoin holders.

The American Internal Revenue Service (IRS) treats bitcoin as a capital asset. This means that people who received any income from bitcoin should pay capital gains tax on it. According to Forbes, the tax rate varies from 15% to 20% depending on the income of this or that household and on the time of ownership.

As with all capital gains, the reverse works for any possible losses: “Capital losses can be netted against the capital gain and excess losses can be deducted from ordinary income”. This will be calculated in the same manner as with the system of calculation used for stocks or other similar assets.

One interesting point in a different paragraph of the tax code is of interest to miners. If a miner mines his bitcoins independently as a self-employed worker, they have to pay the self-employment tax on the income from mining.

Forbes raises the question of price change, which is quite important taking into account the volatility of bitcoin. According to Kelly Philips Erb, businesses and private individuals who are reporting bitcoin activity should calculate “the fair market value of the virtual currency in U.S. dollars as of the date of payment”. The author is silent about the means by which this or that business should establish the “fair market price” of their transaction on any given day.

This is not the first time Forbes touches on the topic – in December 2014, Bryan Clonz explained to the readers how to maximize their tax deductions using bitcoin donations. He suggested making large donations with bitcoins that readers have held for over a year. Such significant donations could result in a big tax deduction:

“In this case, that means that if you held the Bitcoins you donated for longer than a year, you will generally be able to deduct the full fair market value of the donation, up to 30% of your adjusted gross income, without having to recognize any taxable gain on them” – wrote Clonz in his article. Unfortunately, it was not very popular with the Forbes audience abd was only 2,600 times.