Next year, in addition to an apparently excellent education, MIT undergrads are each going to get $100 worth of bitcoins to spend. What’s unclear, though, is whether MIT will provide tax advice to go along with those bitcoins. Continue reading
A couple months ago, I posted about the problems with taxing bitcoins. In short, we didn’t know if bitcoins were currency or property. Largely, 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.