In the last episode, we were joined by Dr. Anonymous, a cryptocurrency miner who explained what cryptocurrency is, how it’s mined, and how it’s valued. In this episode, we’re going to talk about another important aspect of cryptocurrency: how the IRS is looking at it and how it’s taxed. Because, as you know, if there is money to be made, there are taxes to be paid.

Melane Howell and Tim Dimitroff, accountants here at Rea, have invested some serious time and energy into researching cryptocurrency and the tax implications associated with this intangible asset. They will be talking about the guidance that currently exists, how it’s actually viewed by the IRS, and what other reporting requirements are out there for cryptocurrency miners like our friend Dr. Anonymous.

The IRS Doesn’t Consider Cryptocurrency to be Currency

For all intents and purposes, cryptocurrency is used and treated like money and it’s used for things like purchasing goods and compensating employees. However, the IRS actually considers cryptocurrency to be intangible property – and any way you slice it, the IRS considers transfers of cryptocurrency to be a taxable event.

If you are invested in or interested in cryptocurrency, you will want to know about these other topics discussed in this episode:

• IRS guidance was originally issued in 2014, which means currently there are quite a few areas that require additional clarification by the IRS.
• What you do and don’t have to report to the IRS about your cryptocurrency holdings and trades.
• If you have invested in cryptocurrency, you could be looking at foreign reporting requirements.

If you liked this episode of unsuitable on Rea Radio, let us know by hitting the like button or by sharing it with your followers on social media. You can also use #ReaRadio to join the conversation on Facebook and Twitter, and you can watch the podcast in action on the Rea & Associates YouTube channel. We’ve also included access to additional resources on our website at www.reacpa.com.