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Bitcoin Makes Historic First Appearance In US Supreme Court Opinion (ccn.com)
hyperclocker shares a report from CCN: Thursday marked a historic day for bitcoin, as the flagship cryptocurrency made its first appearance in an opinion published by the U.S. Supreme Court. The case, Wisconsin Central Ltd. v. United States, did not involve bitcoin's regulatory or legal status. Rather, it examined whether employee stock options represent taxable compensation under the Railroad Retirement Tax Act of 1937.
That may seem like an unlikely place for a discussion of bitcoin to appear, however, as justices noted in both the majority and dissenting opinions, the case forced them to consider a fundamental question that has also taken on a renewed importance in the decade following the publication of the Bitcoin white paper: "What is money?" "Ultimately, the 5-4 majority ruled that employees should not be taxed for exercising stock options since the action does not constitute 'money remuneration,'" the report adds. "However, writing in a dissenting opinion, Justice Stephen Breyer argued for a 'broader understanding of money' and said that stock options should be classified as taxable compensation."
That may seem like an unlikely place for a discussion of bitcoin to appear, however, as justices noted in both the majority and dissenting opinions, the case forced them to consider a fundamental question that has also taken on a renewed importance in the decade following the publication of the Bitcoin white paper: "What is money?" "Ultimately, the 5-4 majority ruled that employees should not be taxed for exercising stock options since the action does not constitute 'money remuneration,'" the report adds. "However, writing in a dissenting opinion, Justice Stephen Breyer argued for a 'broader understanding of money' and said that stock options should be classified as taxable compensation."
No idea why your comment was modded down as you are exactly right. Back in the 90s, hundreds of Sun Microsystems were caught by this trap in which they exercised stock at their low "purchase price" of say $10/share while its fair market value was an order of magnitude greater. The taxes they owed on pieces of paper became the fair market price at time of exercise minus exercise price * number of shares. Then quite suddenly the stock crashed, the IRS came for their taxes the following April, and people who had briefly been theoretical millionaires were instead taxed like millionaires but in fact held nothing of value.
This type of stock option is called an ISO, and they were all the rage as a form of compensation in Silicon Valley, especially during the 90s through 2000s. Many lives were ruined by the taxation of a speculatively valued stock, and the only entity to truly benefit from the sky-high price of those stocks was the IRS. ISOs have since given way to RSUs as they represent a different method of taxation, but I happen to share the court's opinion that stock != money until that stock is liquidated. The value of a greenback is consistent from day to day while stocks, bitcoin, art, etc. are not.