user1878: From a taxation perspective, I think it's important to clarify if running a Bitcoin mining operation is more like property exchange, labor to solve a puzzle, vs winning a lottery that runs every 10 minutes.
I'm looking from someone to answer who is familiar with accounting rules regarding lotteries, gambling, and similar operations.  As it stands, lottery earnings are taxed at enormous rates.  (50%)  
Although I'm interested in US based operations, anyone with experience in other countries would be of interest as well.

user4842: I recommend this article:
http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know/
It says:
Individual bitcoin miners who convert their “created” coins to fiat are money transmitters, even though they never act “as a business,” nor accept value from one person to transfer it to a third person.
So, assuming that you aim to convert some of your mined bits, you are taxed as a money transmitter along with the regulations for transmitters, FinCen compliance etc. 

user1448: Please take all these answers with a grain of salt and consider talking to either a tax professional or a tax attorney to get advice on how to report profits/losses from Bitcoin, especially if you are either a business or are reporting a substantial amount.
The Internet is great and StackExchange is wonderful, but when it comes to taxes, err on the side of caution and speak to a professional in your country who knows the laws and regulations in question or can research them if necessary.
If you're ever audited (or worse, in Court) the difference between "per my tax attorney's advice" and "per the advice I got on the Internet by RandomCommenter69" could be huge.

user1878: In the USA, Bitcoin earnings are treated like property.  The full announcement is here:

Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply IR-2014-36,
March. 25, 2014 WASHINGTON —
The Internal Revenue Service today issued
a notice providing answers to frequently asked questions (FAQs) on
virtual currency, such as bitcoin. These FAQs provide basic
information on the U.S. federal tax implications of transactions in,
or transactions that use, virtual currency.
In some environments,
virtual currency operates like “real” currency -- i.e., the coin and
paper money of the United States or of any other country that is
designated as legal tender, circulates, and is customarily used and
accepted as a medium of exchange in the country of issuance -- but it
does not have legal tender status in any jurisdiction.
The notice
provides that virtual currency is treated as property for U.S. federal
tax purposes.  General tax principles that apply to property
transactions apply to transactions using virtual currency.  Among
other things, this means that:

Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer  on a Form W-2, and are subject to federal income tax withholding and
payroll taxes.

Payments using virtual currency made to independent contractors and other service providers are taxable and
self-employment tax rules generally apply.  Normally, payers must
issue Form 1099.

The character of gain or loss from the sale or
exchange of virtual currency depends on whether the virtual currency
is a capital asset in the hands of the taxpayer.

A payment made using
virtual currency is subject to information reporting to the same
extent as any other payment made in property.
Further details,
including a set of 16 questions and answers, are in Notice 2014-21,
posted today on IRS.gov.




1878: <p>From a taxation perspective, I think it's important to clarify if running a Bitcoin mining operation is more like property exchange, labor to solve a puzzle, vs winning a lottery that runs every 10 minutes.</p>

<p>I'm looking from someone to answer who is familiar with accounting rules regarding lotteries, gambling, and similar operations.  As it stands, lottery earnings are taxed at enormous rates.  (50%)  </p>

<p>Although I'm interested in US based operations, anyone with experience in other countries would be of interest as well.</p>
 4842: <p>I recommend this article:</p>

<p><a href="http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know/" rel="nofollow">http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know/</a></p>

<p>It says:</p>

<p><em>Individual bitcoin miners who convert their “created” coins to fiat are money transmitters, even though they never act “as a business,” nor accept value from one person to transfer it to a third person.</em></p>

<p>So, assuming that you aim to convert some of your mined bits, you are taxed as a money transmitter along with the regulations for transmitters, FinCen compliance etc. </p>
 1448: <p>Please take all these answers with a grain of salt and consider talking to either a tax professional or a tax attorney to get advice on how to report profits/losses from Bitcoin, <em>especially</em> if you are either a business or are reporting a substantial amount.</p>

<p>The Internet is great and StackExchange is wonderful, but when it comes to taxes, err on the side of caution and speak to a professional in your country who knows the laws and regulations in question or can research them if necessary.</p>

<p>If you're ever audited (or worse, in Court) the difference between "per my tax attorney's advice" and "per the advice I got on the Internet by RandomCommenter69" could be <em>huge</em>.</p>
 1878: <p>In the USA, Bitcoin earnings are treated like property.  <a href="http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance" rel="nofollow noreferrer">The full announcement is here:</a></p>
<blockquote>
<p><strong>Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply</strong> IR-2014-36,</p>
<p>March. 25, 2014 WASHINGTON —</p>
<p>The Internal Revenue Service today issued
a notice providing answers to frequently asked questions (FAQs) on
virtual currency, such as bitcoin. These FAQs provide basic
information on the U.S. federal tax implications of transactions in,
or transactions that use, virtual currency.</p>
<p>In some environments,
virtual currency operates like “real” currency -- i.e., the coin and
paper money of the United States or of any other country that is
designated as legal tender, circulates, and is customarily used and
accepted as a medium of exchange in the country of issuance -- but it
does not have legal tender status in any jurisdiction.</p>
<p>The notice
provides that virtual currency is treated as property for U.S. federal
tax purposes.  General tax principles that apply to property
transactions apply to transactions using virtual currency.  Among
other things, this means that:</p>
<ul>
<li><p>Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer  on a Form W-2, and are subject to federal income tax withholding and
payroll taxes.</p>
</li>
<li><p>Payments using virtual currency made to independent contractors and other service providers are taxable and
self-employment tax rules generally apply.  Normally, payers must
issue Form 1099.</p>
</li>
<li><p>The character of gain or loss from the sale or
exchange of virtual currency depends on whether the virtual currency
is a capital asset in the hands of the taxpayer.</p>
</li>
<li><p>A payment made using
virtual currency is subject to information reporting to the same
extent as any other payment made in property.</p>
<p>Further details,
including a set of 16 questions and answers, are in Notice 2014-21,
posted today on IRS.gov.</p>
</li>
</ul>
</blockquote>
