Guide To Cryptocurrency Tax Rules

15 lessons for bitcoin investors

How many bitcoin investors are not up to speed with the IRS crackdown? Millions, probably. Coinbase has 35 million customer accounts. The number of taxpayers reporting crypto trades was, until recently, in the hundreds.

If it was once hard to plead ignorance of tax laws regarding crypto, it’s now impossible. The new Form 1040 demands that taxpayers say whether or not they own any virtual currencies. The yes/no question parallels the one that was implemented years ago on offshore investment accounts and led to nasty treatment of people who lied.

1. Cryptocurrency is property.

Bitcoin and its competitors look a lot like money: they’re a store of value and a means of exchange. But the Internal Revenue Service has decreed that these assets are not currency and not securities either. They are property. More like a shopping mall than like a $100 bill.

As capital assets, they give rise to…