Share this on:
 E-mail
20
VIEWS
0
COMMENTS
 
SHARES
About this iReport
  • Not vetted for CNN

  • Click to view aucamangates's profile
    Posted April 9, 2014 by
    aucamangates

    More from aucamangates

    Abney and Associates Tech Research: Bitcoin Regulation Roundup

     

    Rumours, Court Cases and Taxing Times

    Regulatory attitudes towards crypto currencies around the world are shifting. Hardly a day goes by without a central bank issuing a warning on the digital currency. However, it’s not all bad news – as some authorities are taking a much more positive approach.

    In CoinDesk’s regulation roundup, Certified Public Accountant and ACFE Certified Fraud Examiner Jason Tyra examines the most significant digital currency news from the world’s regulators and law courts over the past two weeks.

    USA: Bitcoin is property, says IRS

    The US Internal Revenue Service issued a notice in late March that classified bitcoin as property for purposes of taxation, clarified that mined bitcoins are taxable at the time they are received, and specified that bitcoins received in connection with a trade or business or as wages are subject to withholding and/or payment of Medicare or social security taxes.

    The reaction among US bitcoiners was mixed. Treatment as a capital asset grants access to preferential capital gains rates for bitcoins held longer than a year and a day, but imposes the burden of tracking basis and gain for every bitcoin received or spent.

    This is good news for US taxpayers using bitcoin as a store of wealth, but terrible news for those who might use it as a means of exchange.

    The subtleties and implications of the IRS notification are likely to fuel debate among US bitcoin enthusiasts for months to come: for example, the IRS did not specify whether taxpayers exchanging bitcoins for other crypto-currencies would be entitled to defer taxable gain under like-kind exchange rules.

    Rejection of non-functional (otherwise known as ‘foreign’) currency treatment by the IRS has also created uncertainty as to the implications, if any, for FinCEN’s designation of bitcoin as a monetary instrument.

    USA: Texas following NY example?

    The Texas Department of Banking released a letter this week addressed to “virtual currency companies operating or desiring to operate in Texas” that declared that, “because cryptocurrency is not money under the Money Services Act, receiving it in exchange for a promise to make it available at a later time or different location is not money transmission” in the state.

    However, since the Texas Department of Banking is a state-level agency, its declaration has no impact on FinCEN’s federal registration requirements.

    Texas has aggressively cultivated a business-friendly climate in recent years, poaching a number of high-profile companies from higher tax and higher regulation states. Austin, Texas is especially well known as a progressive hub for technology companies, including many bitcoin startups.

     

    Read full article at CoinDesk

    What do you think of this story?

    Select one of the options below. Your feedback will help tell CNN producers what to do with this iReport. If you'd like, you can explain your choice in the comments below.
    Be and editor! Choose an option below:
      Awesome! Put this on TV! Almost! Needs work. This submission violates iReport's community guidelines.

    Comments

    Log in to comment

    iReport welcomes a lively discussion, so comments on iReports are not pre-screened before they post. See the iReport community guidelines for details about content that is not welcome on iReport.

    Add your Story Add your Story