IRS tax and cryptocurrency

When did IRS start issuing guidance on taxation for Bitcoins?

In 2014 for the first time IRS began issued a guidance on taxation for Bitcoins.

How does IRS treat Bitcoins for taxation?

IRS determined that Bitcoin would be treated as an intangible  property. This means that individuals who have invested in digital currencies would have to fill out Form 8949,  this is the same form that individuals are required to fill out if they have invested in bonds and stocks.

How does IRS view payments in Bitcoin? IRS views Bitcoin payments a standard income. therefore Bitcoin payments fall under standard income tax guidelines.  This means that individuals would have to pay capital gains or Capital loss when they declare their tax.

How much is the capital gains and capital loss tax?

How many people declared Bitcoin related tax in 2015?  Only $802  investors declared their bitcoin-related gains or losses to the IRS?

How does IRS track Bitcoin Financial transactions of individuals?

  1. recently IRS required coinbase members identities to be revealed. if you have an account in coinbase and have traded over 20,000 US dollars in Bitcoin between the Years 2013 and 2015 coinbase will have to send that information to the IRS.
  2. 2 IRS is also now partnered worth a startup called chain analysis which  provides IRS tools that enable tracking visualizing and analyzing Bitcoin transactions.