Posts Tagged ‘short term capital gains’

The IRS has now finally declared its official stance on Bitcoin: It is to be treated as a capital asset and not currency, yet will be saddled with currency regulations as well. The first and perhaps scariest bullet point is that any gain made on the value of Bitcoin now must be treated as a short-term capital gain (which could be taxed up to 35%!). So, for example, the early adopters who turned pennies into millions, upon cashing out, will owe millions in taxes. Lovely!

So, the onerous list of bullet points:

  • Bitcoin profits treated as short-term capital gains.
  • Mining of Bitcoins is treated as gross income.
  • Any payment in excess of $600 value must be reported.
  • Any payment of Bitcoins to a contractor must be reported and filed with a Form 1099-MISC.
  • Bitcoin payments may be subject to backup withholding.

You can read all the legalese ugliness here.

 

Thanks to LaserBob for the info.