IRS Labels Bitcoin as Property


[social_warfare]

This week the IRS finally gave Bitcoin a label. While Bitcoin is commonly thought of as a currency / financial instrument, the IRS has labeled Bitcoin as PROPERTY for tax purposes. Their rationale: even though Bitcoin is used as a currency, it has yet to be accepted by any country as a currency. Thus, Bitcoin is more like personal intangible property. So when people receive bitcoin as payment for their services, they must include the fair market value of the currency at the time of the transaction when computing their income for their taxes. This represents good news for the Bitcoin community. If Bitcoin has become significant enough to tax, it represents a good step in the maturation process for the fledgling technology. But, this news is not all sunshine and rainbows. There are a couple of problems with this. First, libertarian values seep in the core of Bitcoin. Bitcoin […]

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Can America Federally Regulate Bitcoin


[social_warfare]

A week ago U.S. Senator Joe Manchin from West Virginia sent a letter to currency regulators such as the Treasury Department and Federal Reserve protesting the legitimacy of Bitcoin.   He encouraged them to prohibit Bitcoin like Thailand, China, and South Korea.  Some shrug this off as a political ploy of one of the Senate’s most junior to gain publicity.  Others find this to be the rise of American government regulation.   But who can regulate it?  The next day US Federal Reserve chairwoman Janet Yellen testified  before the Senate Banking committee that, “The Federal Reserve Simply does not have the authority to supervise or regulate bitcoin in any way.”  She explained that Bitcoin was a “payment innovation” that did not interact with banks that neither it nor the Federal Reserve had “the ability to supervise and regulate” it.  And she’s fair in her analysis.  Both the Treasury and Reserve’s […]

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