Comment by patio11 | Hacker News Reader

Comment by patio11 | Hacker News Reader

Somebody in the Bitcoin ecosystem would get a lot of attention if they published an authoritative number for the average Bitcoin price in 2013, which would likely suffice for most taxpayers' needs for a reasonable and consistent valuation. (Ask a tax professional if you disbelieve that informal recommendation.)

This is one of the many equally valid options for e.g. calculating the yen/USD conversion if you happen to have many yen transactions which are approximately equally distributed throughout the year. (The Treasury Department has a handy web page listing yearly averages for reference, but you're allowed to use any number which is reasonable and consistent. One of the best reasons to keep good books is that you can try several reasonable methods and then consistently adopt the one which is most favorable to your interests. Welcome to taxes, if that being OK is counterintuitive.)

Isn't the whole point of saying bitcoin is not currency, but property, that you're not allowed to do this kind of accounting? I'm pretty sure if I buy and sell the same stock throughout the year, I can't simply account for it using the stock's average for the year.

If you run a numerical simulation of white noise distribution of buy and sell, you'll find no profit to tax and your buy and sell prices will average close to that number.

Special rules apply to stocks, principally because the IRS thinks you should have really good records for your cost basis. If you had acquired them through a dividend reinvestment plan (DRIP) average market price over time is exactly what you'd use.

"If you had acquired them through a dividend reinvestment plan (DRIP) average market price over time is exactly what you'd use."

I think that is allowed for mutual funds, but not stocks.

http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-In...

http://bitcoinaverage.com/ does currency-adjusted price averages across many exchanges around the world.

You should be able to get a yearly average from the API but I worry this would not be what the IRS had in mind, but rather specific prices at time of purchase vs liquidation.

You can get the daily historical prices since July 17th 2010 from [1]. Here's some quick calculation of the yearly averages (until yesterday):

   2010:   0.14$
   2011:   5.43$
   2012:   8.25$
   2013: 191.90$
   2014: 717.93$

Looks like average price didn't move that much in 2012.

[1]: https://api.bitcoinaverage.com/history/USD/per_day_all_time_...

This does it all for you: https://bitcointaxes.info/

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