Last week the Internal Revenue Service (IRS) in the USA ruled that the digital currency Bitcoin should be treated as property, not a currency, for tax purposes.
This means that every transaction a Bitcoin user makes will have to be reported in some way. If it had been ruled as a digital currency, this would not have been the case.
The IRS agency states that anyone who holds the digital currency will have to calculate its value from the date it was received to determine whether a gain or loss was realised and consequently report the result.
This ruling appears to be an attempt to make the digital currency mainstream and could be seen by many, particularly during Bitcoins troubled recent times, as an indicator that it is here to stay. However, some users are voicing opinions that this may in fact have a detrimental effect on the digital currency, due to it being subjected to the same onerous record-keeping requirements and taxes as those making stock transactions and other deals.
For example, paying for a drink using bitcoins would be a taxable event meaning that the buyer will have to calculate if they had made any capital gain on the asset they just sold.
See recent Bitcoin articles:
- Another Bitcoin exchange hack attack
- Bitcoin exchange MT Gox files for bankruptcy
- Bitcoin exchange Mt Gox goes offline
- Bitcoin Value Sinks Amid China Restrictions
- JP Morgan files for Bitcoin-style payment system
- Bitcoin virtual currency breaks $1,000 mark
Source: Various online media