https://www.irs.gov/pub/irs-drop/n-14-21.pdf https://www.irs.gov/pub/irs-drop/n-14-21.pdf The IRS has said that it is currently treating Bitcoin as property fo

https://www.irs.gov/pub/irs-drop/n-14-21.pdf https://www.irs.gov/pub/irs-drop/n-14-21.pdf The IRS has said that it is currently treating Bitcoin as property for tax purposes. The document has some interesting bits to it. If you mine bitcoin, you're likely liable for self-employment taxes. When you use bitcoin to pay for things, you might create a gain or loss compared to your basis (even though you aren't exchanging for cash). Wages received in bitcoin still have taxes due on the US Dollar value of the bitcoin received (and payable in USD). I'm a little surprised that the IRS didn't treat it as a foreign currency with the Section 1256 60/40% split long-term/short-term gain tax treatment. Anyway, this case doesn't change anything from a tax standpoint. The IRS has already clarified all of that for your federal taxes.