IRS Rules Bitcoin Is Property, Not Currency

This strikes me as the most expected outcome. They are essentially treating Bitcoin as gold (actually slightly better, since gold has a collectible tax rate of 28% which doesn't qualify for the long term capital gains rate). The trickiest and scariest consequence will be for miners, who might need to report taxes at the time their bitcoins were mined and at the current market rate. This will mean a lot of people will need to retroactively declare gains, many of which may not have been realized. For small mining operations likely the miners will avoid reporting and just sell for cash. But for large miners who will need to use the exchanges, this becomes a real issue. Consult an accountant!

Of course for the many people who will do simple point-to-point purchases with bitcoin, these rules won&#x27;t really apply, since those transactions and gains aren&#x27;t detectable unless they&#x27;re declared.<p>On the other hand, with retailers and 3rd-party apps adding Bitcoin payment layers, an increasing amount of bitcoin purchases will be on record and associated with an address or bank account in some way or another. I think it&#x27;s good - we get both worlds and bitcoin grows.<p>I think they also did a good job of doing this without having it come off stiff or overly specific to Bitcoin. Doubtless things will be adjusted over the next couple years, but this is a big step in the right direction. (I also anticipate a couple small steps in the wrong one, but that&#x27;s to be expected)

So that means if I hold it over 1 year I can treat any gains as LONG TERM capital gains, right?

This can only be good for Bitcoin. If you can pay taxes on it; it increases its legitimacy.<p>Bitcoin has never really been currency anyway; it&#x27;s more of a pseudo-futures contract than anything else. IMO an essential criteria for a currency is that it is backed by an economy and a government with the power to ensure the security of that currency.

So, if military capabilities can detonate the planet in under a millisecond...<p>The &quot;property&quot; is so liquid that it can be taken away faster then it can be processed, and acquired...