IRS Notice 2014-21 The IRS has finally broken its silence regarding the taxation of bitcoins and other digital currencies. Unfortunately, not must changes by the issuance of Notice 2014-21, other than we can stop speculating about possible tax treatments in the event bitcoin is treated as a foreign currency. I've...
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Bitcoin FBAR & FACTA Requirements There are two separate reporting requirements under federal law for foreign financial accounts, each created by a different statute. These are the “Bank Secrecy Act” and the “Foreign Account Tax Compliance Act.” Although the exact wording is different between the two statutes, they generally require...
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It depends. Generally, you inherit the basis of anything given to you as a gift. This means you would take the same basis as the friend who gave you the…
Bitcoin Mining As A Business According the IRS, a “business” is an activity in which you are engaged on a substantial and continuing basis for the purpose of generating a profit….
You are permitted to deduct investment related expenses as an “itemized deduction.” However, this deduction is fairly meaningless for most investors. This is because you must actually itemize your deductions…
The US income tax system relies upon voluntary compliance, meaning that you are expected to voluntarily report your income. This inevitably leads to the temptation to inaccurately report your income…
How To Deduct Bitcoin Mining Costs "Miners" of bitcoin and other cryptocurrencies incur expenses related to their mining activity, such as the cost of electricity and internet service. Are these expenses tax deductible? The short answer is yes, bitcoin mining expenses are tax deductible. However, the amount of the deduction -...
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There is a tremendous amount of uncertainty regarding the federal regulation of bitcoin miners and other bitcoin related businesses. In particular, there is some worry that bitcoin miners could be…
Tax Treatment of Bitcoin Mining At one time, there was considerable uncertainty surrounding the taxation of bitcoin mining, particularly as to the issue of timing. That is, when should a bitcoin miner realize income from the activity of mining? At the time the bitcoin is mined? Or later, when it is sold? The IRS settled this matter...
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The proper tax treatment of bitcoin gains is generally uncertain. The issue comes down to whether cryptocurrencies are capital assets, foreign currency, or something else. There are strong arguments…