Why does the IRS treat Bitcoin as property while FinCEN treats it as a form of currency?
Cryptocurrency
Asked by Question Bot03/Apr/20141 answer
1 Answer
F
Faisal Khan
Answered 03/Apr/2014
Each branch has its own understanding and definition of Bitcoin. FinCEN decided to treat it as a currency, since it was being interfaced with the current fiat currencies and banking system. They could not have treated it any other way.
For all practical purposes, Bitcoin to most of us is a currency (barring the protocol aspect of it).
IRS decided to treat it as a property because it fit absolutely well with the taxation issue - how the heck do you tax Bitcoin?
I wouldn't be surprised if 1-2 US States would differ from the masses as to what Bitcoin is.
All in all this is a weird setup, there should be a single opinion on Bitcoin (as most countries have done), but US being what it is, one can expect this.
For all practical purposes, Bitcoin to most of us is a currency (barring the protocol aspect of it).
IRS decided to treat it as a property because it fit absolutely well with the taxation issue - how the heck do you tax Bitcoin?
I wouldn't be surprised if 1-2 US States would differ from the masses as to what Bitcoin is.
All in all this is a weird setup, there should be a single opinion on Bitcoin (as most countries have done), but US being what it is, one can expect this.