Bitcoin is taxed as property

Bitcoin is not recognized in the United States as a currency, but it will now be taxed as property, according to a circular from the American IRS, which seeks to clarify the landscape regarding what applies to the “digital currency” in the US.

The circular clarifies that Bitcoin and other digital currencies are treated as property, not as currency. Practically, Bitcoin will be treated in the US the same way stocks are.

Thus, as the Wall Street Journal notes in its example, if someone buys bitcoins worth $5,000, and then their value doubles, and the same person uses the bitcoins worth $10,000 for a transaction, then the extra $5,000 is taxable capital gains.

And of course, now everyone who conducts transactions with bitcoins must report them to the tax authorities, even if they are small amounts.

Important element is that these provisions apply retroactively, and therefore also cover transactions that took place in the past, and penalties are provided for those who do not declare their bitcoin transactions, although some leniency will be applied.

Source: newsbeast.gr