How the IRS Values Cryptocurrencies

          Cryptocurrencies, such as Bitcoin, have had special IRS rules made for them over the past 4 years. They basically state that these types of digital holdings are not viewed as currency, they are property. That means in the event there is ever an exchange, that occasion will be taxable.

          However, there is another pressing issue that comes up because of the decentralized nature of digital currencies. Are virtual currencies subject to foreign financial reporting requirements? They very well might be. This is an area where a Taxpayer needs to do their own research. They must find out if their currency is on an exchange or a virtual wallet. Taxpayers who choose to venture into this field must know what they have signed up for, and what responsibilities they have. If they don’t, then the IRS might surprise them with some sobering facts.

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