New Tax Rules for IRAs and Bitcoin: American Assoc. of Individual Investors
Investors March 28, 2014 Comments Off on New Tax Rules for IRAs and Bitcoin: American Assoc. of Individual Investors 12On Tuesday, the IRS issued tax rules regarding the virtual currency. Bitcoins are now classified as a capital asset (except when held as inventory mainly for sale to customers), and not as a foreign currency. The IRS also considers “stocks, bonds, and other investment property” to be capital assets. The Bitcoin bulletin (PDF) has a good question and answer section.
Though Bitcoin is intended to exist outside the boundaries of government, any transaction involving the virtual currency is subject to existing tax laws. If you trade, transact or are compensated in Bitcoins, you must factor the transaction into your tax liabilities.
If you have any questions about the tax code, contact a professional. The amount of money you may spend working with a quality tax professional can well be worth the avoidance of an audit.
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