its cryptocurrency so you can start off with any amount... and why papertrade, you may aswell start with $100 bucks and trade that instead of papertrade, it will be more acurate.. then when you are comfortable, add the real capital..
I annot advise you about taxes, depending on where you live, your government may not even consider this currency, or they may consider this capital gains (which is taxed at a different rate) .. Maybe you only declare bitcoin you convert back into fiat.. youll have to research your area