Bitcoins Ruled As Taxable Property by the IRS

The US Government has recognized Bitcoins which is good in a way but at the same time they have decided to view them as property, making them taxable. If they had decided that the virtual currency actually was a currency then a tax could not be placed on them when they gain in value. Some view this as making the currency legitimate, and a good thing.

Bitcoin Magazine

Bitcoin Magazine (Photo credit: zcopley)

The fact that they can now be taxed reduces the interest for some who see the risk in the fluctuations in value and don’t want to take on the additional tax risk. Spending them would trigger the taxation while holding onto the property would not create a taxable situation. An odd part of the IRS decision is that miners would need to count their Bitcoins as income.

Stability in the marketplace is what many hope for with a couple exchanges having financial trouble in recent months. This decision by the government should increase stability.

It will be interesting to see if there’s a form to claim Bitcoin income in the future or if exchanges will need to issue 1099 tax forms to miners at the end of each year.


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