It is quite complicated, but you have to keep in mind that your profit (loss) from trading Bitcoins may be an income (loss) OR a capital gain (loss)… The above rule gives some clues to find out what your actual status is. Also, since this rule has been quite well known for years, we may assume that past court decisions could be of great interest in understanding what is coming concerning Bitcoin tax matters.
It is important to know if your profit is an “income” or a “gain”, because tax consequences are important. You will pay much less taxes if it is a capital gain, rather than an income.
Louis Sirois LL.B