The IRS says it is studying the matter but has yet to issue any guidance. Until it does, it is anyone’s guess how Bitcoin should be taxed. Most users/investors will simply pick what is most beneficial to them when they file their 2013 returns.
At the moment, Bitcoin and its cousin currencies have had far more success generating buzz than facilitating commerce. Yet, the idea of online money can’t be ignored.
Back in November, Mindi Lowy and Miriam Abraham of PriceWaterhouseCoopers wrote a terrific review of the current state of play for Tax Notes Today (requires a subscription). They concluded that for now virtual currency would probably be viewed as a capital asset since it has limited use as real money. However, should these vehicles gain wider commercial acceptance, they’d more likely be treated as actual currency for tax and regulatory purposes.
Read the full article in Forbes here.