IRS Declares Bitcoin to be Property

One of the amusing trends lately about Bitcoin adherents trying desperately to legitimize their shit is that some are taking the whole “tax free” thing to a new level by trying to pay taxes on it.

I know, right?

Anyway the IRS released some guidelines about it, which Bloomberg covers here. They’ve decided BTC is property, not currency. That on its own is humorous enough, but here’s the kicker: you’re not buying things with it, you’re bartering with it (think more along the lines of stock trades). And it turns out that will fall under captail gains rules here… well, here’s their explainer.

Today’s IRS guidance will provide certainty for Bitcoin investors, along with potential income-tax liability that wasn’t specified before. Purchasing a $2 cup of coffee with Bitcoins bought for $1 would trigger $1 in capital gains for the coffee drinker and $2 of income for the coffee shop.

Yeah. YOU feel like tracking your expenditures to report on your tax forms as capital gains/losses? 

Things tip into Comedy Gold™ territory when you read a few comments on the Bitcoin subreddit, and all the wonderful armchair tax law going on in there. 

[–]DozeNutz -1 points 30 minutes ago
This is if you are dumb enough to claim btc capital gains.

Don’t report your taxes accurately, what could go wrong? 

[–]tebexu -1 points 49 minutes ago
… there is no incentive for merchants to report taxes.

Ah, right, so the merchants jumping through hoops for your faux-currency already will risk their taxes too. AWESOME.

[–]folhowk 20 points 19 minutes ago
I’m gonna stick with the $135 Gox price for my taxes because it is the most stable over the past month

I’ll report a way-low value on a now defunct exchange, that won’t look weird at all.

Sigh. So much comedy, so little time to review it all.