Bitcoin and other virtual currency

A lot of people are getting into the cryptocurrency craze. A question I am often asked is "how is this taxed?" Well, according the IRS, virtual currency is treated as property for federal tax purposes. This means it can be used to buy things, such as personal goods, or business property, or held as an investment. Since the valuation of this currency changes so rapidly, the "cost basis" is the fair market value on the day of purchase. Furthermore, each virtual currency transaction is a reportable transaction, meaning there is a gain or loss associated with each transaction. The IRS also hasn't determined whether virtual currency is a currency, so the "wash sale" rules don't apply just yet. The IRS also fears that cryptocurrency may be used to hide income. My advice - if you use cryptocurrency, keep good records.

11 views0 comments

Recent Posts

See All

What is your greatest ability?

To all service professionals out there, what is your greatest ability? Are you the best lawyer, accountant, realtor, engineer in the whole world? Probably not. This sounds like a sports cliche, but

5050 Quorum Drive, Suite 700
Dallas, Texas 75254

Phone: 469-320-1260

Fax: 469-464-1789

Mark Conner, CPA PLLC

  • LinkedIn Social Icon
  • Facebook Social Icon
  • Yelp Social Icon

©2018 by Mark Conner, CPA PLLC.