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The regulatory and market environment. The Internal Revenue Service (IRS) describes Virtual Currencies (VCs) as "a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value [and] does not have legal tender status in any jurisdiction." [4] Although, electronic payment systems have been ...
Virtual currency. Virtual currency, or virtual money, is a digital currency that is largely unregulated, issued and usually controlled by its developers, and used and accepted electronically among the members of a specific virtual community. [1] In 2014, the European Banking Authority defined virtual currency as "a digital representation of ...
A cryptocurrency, crypto-currency, or crypto [a] is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. [2] It has, in a financial point of view, grown to be its own asset class.
How the IRS Treats Cryptocurrency The most important thing to understand about the tax implications of cryptocurrency is that the IRS has designated all “virtual currency” as a form of property.
The Internal Revenue Service (IRS) is stepping up enforcement efforts, and even those who hold the currency — let alone trade it — need to make sure they don’t run afoul of the law.
The IRS requires all filers to state whether they’ve received or sold digital currency in the relevant tax year. When reporting your realized gains or losses on cryptocurrency, use Form 8949 to ...
They underlined that virtual currencies (including bitcoin): (1) are not issued or guaranteed by the central bank, (2) are not money, i.e. they are neither legal tender nor currency, (3) can not be used to pay tax liabilities, (4) do not meet the criterion of universal acceptability in shopping and service points, (5) are not electronic money ...
oversight. Later, the federal Internal Revenue Service issued directives leading up to tax season stating that it was the official stance for tax purposes that Bitcoin and other cryptocurrencies be treated as commodities rather than currency (Harpaz, 2014) (IRS.gov. 2014). 3. WHAT MAKES A CRYPTOCURRENCY?