10 May Bitcoin – Not for Avoiding Taxes
Bitcoin transactions are Taxable
Bitcoin has become the rage in the past few months by the so-called asset protection industry. There have been claims that this cryptocurrency cannot be detected by governments and transactions are not taxable. Not true!
Under the Internal Revenue Code, gross income means all income from whatever source. Trading Bitcoin currency for services or goods is clearly income for US Tax purposes. There is no argument. Just like bartering transactions, the question becomes “what is the value of the Bitcoin transferred?” With Bitcoin, the answer is online.
If you want to transact business in Bitcoin that is your option. But, the transactions must be included in gross income or you will be committing tax fraud that can be easily proved by the government.
Anyone interested in tax planning and asset protection can get real results by consulting their tax lawyer.