IRS Rules Bitcoin is Property and Subject to Capital Gains Tax

The IRS has determined that bitcoin will be treated as property, not currency. Therefore, people who receive wages in bitcoins would also be subject to federal income and payroll taxes.

Author:: Brittany Umar
Publish date:: Mar 28, 2014 2:09 PM EDT

The Internal Revenue Service has determined that bitcoin will be treated as property, not currency. In its first big ruling on the virtual currency on Tuesday, the IRS said that bitcoin does not have "legal tender status." As a result of bitcoin being regarded as property, it can be treated as capital assets, governed by the same rules as stocks and bonds. In addition, the IRS said that people who receive wages in bitcoins would also be subject to federal income and payroll taxes.

Brittany joined TheStreet.com TV in November 2006 after completing a degree in Journalism and Media Studies at Rutgers College. Previously, Brittany interned at the local ABC affiliate in New York City WABC-TV 7 where she helped research and produce On Your Side, a popular consumer advocacy segment.