[amorphid]

Say you're way, way up in your Bitcoin investment, and you yse part of the gains to buy a $10 toaster with the equivalent amount of Bitcoin (let's assume no tax in the toaster itself).

Do you realize a $10/gain, and owe money on that? If yes, let's say you return the toaster, and your Bitcoin is refunded. Do you still pay taxes?

[aggronn]

Yes. The point is that when you "trade" BTC for something, you're selling it. We differentiate between a sale and a trade colloquially based on whether currency is involved, but currency isn't that special--its just another good. You realize your gain when you sell your thing in exchange for some other thing.

Moreover, if you bought the toaster, and sold it for $20 in BTC, you would have profited $10 and would need to pay taxes on it.