IRS Offers Extensive FAQ on Virtual Currency Transactions
The IRS has published a helpful and informative guide to Frequently Asked Questions on Virtual Currency Transactions.
Visit the site for concise IRS definitions of virtual and cryptocurrencies, and for answers to 46 other related key tax questions, from “How is virtual currency treated for Federal Income tax purposes?” to “How do I calculate my income if I provide a service and receive payment in virtual currency?” to “Will I recognize a gain or loss if I exchange my virtual currency for other property?”
“In 2014, the IRS issued Notice 2014-21, 2014-16 I.R.B. 938, explaining that virtual currency is treated as property for Federal income tax purposes and providing examples of how long-standing tax principles applicable to transactions involving property apply to virtual currency. The frequently asked questions (“FAQs”) below expand upon the examples provided in Notice 2014-21 and apply those same longstanding tax principles to additional situations.”
