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IRS: Bitcoin Is Property, Not Currency
An anonymous reader sends this news from Bloomberg:
"The U.S. government will treat Bitcoin as property for tax purposes, applying rules it uses to govern stocks and barter transactions, the Internal Revenue Service said in its first substantive ruling on the issue. Today's IRS guidance will provide certainty for investors, along with potential income-tax liability. Under the ruling, purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of income for the coffee shop. ... Under the IRS ruling, Bitcoin investors would be treated like stock investors. Bitcoins held for more than a year and then sold would pay the lower tax rates applicable to capital gains — a maximum of 23.8 percent compared with the 43.4 percent top rate on property sold within a year of purchase. For investors with losses, U.S. tax law allows taxpayers to subtract capital losses from any capital gains. They can also subtract up to $3,000 of capital losses a year from ordinary income.'"
I had to type in a CAPTCHA to access Mt Gox.
And... Summoned the old ones!
"tyltylnc tymrkth"
"Flyin' in just a sweet place,
Never been known to fail..."
Why is bringing in my tax revenue good? Like my wife, the State and Feds have an infinite capacity to overspend. No matter what their revenue is, they will be broke. The huge windfall as a result of the the Tobacco settlement is proof of this as is the Stimulus Package. The state of MA got over 4 billion in the Stimulus Package and it is gone with no jobs to show for it.