Bitcoin and other cryptocurrencies, referred to as convertible virtual currencies or CVCs, have been held and traded for a number of years by U.S. taxpayers. In 2014, the Internal Revenue Service issued a notice that it considered CVCs to be property and not fiat currency. As a result, any sale or exchange of CVCs or the use of CVCs to purchase property or to pay for services would be a taxable transaction, with the taxpayer having either a gain or loss depending on the difference between the fair market value of the property or services and the taxpayer's basis in the CVCs that were used in the transaction. A gain or loss would also arise under the IRS notice if one type of CVC was exchanged for another type of CVC (with the exception of certain Section 1031 exchanges prior to 2018).
展开▼
