Asset classification of cryptocurrency
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A digital asset that has an equivalent value in real currency or acts as a substitute for real currency has been referred to by the IRS as convertible virtual currency. Bitcoin is one example of a convertible virtual currency. Bitcoin can be digitally traded between users and can be purchased for, or exchanged into, U. Tax Consequences You may owe taxes on the following transactions: Sale of a digital asset Exchange of digital assets for property, goods or services Exchange or trade of one digital asset for another Receipt of a digital asset as payment for goods or services Receipt of a new digital asset as a result of mining and staking activities Receipt of a digital asset as a result of an air drop Use of digital assets to pay for goods or services Any other disposition of a financial interest in a digital asset Receipt or transfer of a digital asset for free without providing any consideration that does not qualify as bona fide gift Guidance and Publications Find more information on digital assets and general tax rules in our guidance and publications.
IRS Guidance IRS Notice provides guidance for individuals and businesses on the tax treatment of transactions using convertible virtual currencies. For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. What will happen if one day the world runs out of energy or all computers crash?
In the same case, things like equity, debt, real estate, cash in any form , commodities, art all will survive and be there in some form. When I asked this question on our telegram group and on Twitter, here were the responses. Do you consider Crypto as another asset class or just a new-age online payment technology? Can you please share your thought process around it?
What do you consider it? Disclaimer: I am not saying that cryptocurrencies will not rise in value? All I am debating is if it shall fall under the definition of asset class or not? Please leave this field empty Subscribe to Newsletters.