I'm curious to know how regulated (or unregulated) income from crypto-currencies is whether it's from mining or asset appreciation. Would you owe capital gains taxes? Is this still a very gray area in terms of the US financial industry?
Mining is income at the value at time of earning, I would use an index like XBX to determine price.
Asset appreciation is capital gains.
These aspects of crypto-assets are not a gray area in the US financial sector, and have been addressed for almost half a decade now.
Yes. The guidance the IRS has offered is in Notice 2014-21. Specifically
Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.
In short, this means that you're taxed on capital gains whenever you sell or exchange it (e.g. when you buy something with it) based on its cost basis (how much you paid to acquire it, whether in exchange for money, other property, or services). The doc gives several examples and is worth a full read, but with respect to mining in particular:
Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.
There are still some area for which the American Institute of CPAs have asked for additional guidance, but there is no question that income derived from mining or asset appreciation should be taxed in the eyes of the IRS.