Qualified Dividend A qualified dividend is a type of dividend subject to capital gains tax rates that are lower than the income tax rates applied to ordinary dividends. One can either mine bitcoins or buy them from someone by paying cash, using a credit card , or even a PayPal account. The US Federal Reserve acknowledged the growing importance of bitcoin when it announced that bitcoin-related transactions and investments cannot be deemed illegal. The value received from giving up the bitcoins is taxed as personal or business income after deducting any expenses incurred in the process of mining. The expenses on staking, if there are any, should be deducted from such income as ordinary expenses, i. Casual bitcoin users might want to consider using a reputable bitcoin wallet provider.