Tuesday, April 1, 2014

IRS treats Bitcoins as property

“The taxman has spoken, said Richard Rubin and Carter Dougherty in Bloomberg.com.  In ‘its first substantive ruling on the issue,’ the Internal Revenue Service said this week that it will treat Bitcoins ‘as property’ for tax purposes, applying the same rules used to ‘govern stocks and barter transactions.’  The distinction may limit Bitcoin’s utility as a digital currency, but owners may benefit as profits from transactions will be taxed as capital gains, with a cap of 20 percent, and not as ordinary income, which is subject to a top tax rate of 39.6 percent.”  [Source: The Week, April 4, 2014]

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