The IRS Looked at Bitcoin . . .

bitcoinsA couple months ago, I posted about the problems with taxing bitcoins. In short, we didn’t know if bitcoins were currency or property.┬áLargely, of course, the difference is immaterial: receipt of currency or property constitutes the receipt of taxable income, and using property or foreign currency to acquire goods or services constitutes a taxable realization event.[fn1] The most significant difference is that if bitcoins were property, any gain or loss could be capital, whereas if they were a currency, that gain or loss would essentially always be ordinary.

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