As Bitcoin’s Escalate…Now Taxes – Forbes
Popular, Reviews, Trending December 5, 2013 Comments Off on As Bitcoin’s Escalate…Now Taxes – Forbes 36There is no guidance from the IRS specifically for cryptocurrency. Robert Wood contributed three interesting views: Barter, Currency or Marking to Market valuation to which on commenter took particular exception.
Woods, stated, in part,
“Still, the peer-to-peer nature of Bitcoin doesn’t obviate taxes. If you swap one product or service for another, tax is due, as the IRS explains at its Bartering Tax Center. If you provide services or sell goods for Bitcoin, you have income. If you exchange Bitcoins for cash, whether you have gain may depend on whether Bitcoin is currency or commodity.
One key question these days is whether you are taxable on the appreciation in Bitcoin you bought at $13.50 that is now worth $1,000. Currency wouldn’t be, but it isn’t clear that’s what Bitcoin is in the eyes of the IRS. Transactions in Bitcoin could be property, barter, foreign currency, or a financial instrument. Barter seems most logical, but not everyone agrees.”
Jim Dreher Jr in part,
“I’ve been thinking a lot on the taxes (being a bitcoin holder with every intention of paying any owed taxes) and I think you are wrong about marking to market as being good for the IRS. Because of the speculative nature of bitcoins, marking it to market would make it too risky to hold for us Americans because you could end up owing thousands or even tens of thousands of dollars of taxes or more (for those holding the most bitcoins) and if the bitcoin system failed the next year, have NOTHING to show for it except lots of taxes owed to the IRS.”
For the complete story see: Bitcoin’s $13.50 To $1,200 Eleven Month Climb–Now Taxes – Forbes.
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