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If you're in the US, the problem you would have operating on the assumption that "crypto is a currency" is that it's very far from established that this is true
by NovemberWhiskey 6y ago
If you're in the US, the problem you would have operating on the assumption that "crypto is a currency" is that it's very far from established that this is true, legally speaking.
Crypto-assets are variously regulated more as property, commodities or securities; and from an accounting perspective I don't think that's a distinction that can be willed away.
For example, there are just certainly tax implications that won't be accurately recorded if you assume that income of 1 BTC offsets expenses of 1 BTC. My understanding is that the IRS wants you to calculate the USD fair market value of each of those transfers at the time they occur in order to determine the tax implications.
ref. https://www.irs.gov/irb/2014-16_IRB#NOT-2014-21 https://www.irs.gov/irb/2014-16_IRB#NOT-2014-21
- toyg 6y agoThe regulatory framework is an issue, sure, but in a good system you can set up translation in a bunch of different ways so that the USD values are saved per-transaction. In OneStream you'd set the main currency in, say, USD, then force entries in BTC and translate either with average rate, periodic rate, or spot rate as you prefer. You can then report as necessary.
- arjun_s 6y agoYes, saw this. Q–1: How is virtual currency treated for federal tax purposes? A–1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. Q–2: Is virtual currency treated as currency for purposes of determining whether a transaction results in foreign currency gain or loss under U.S. federal tax laws? A–2: No. Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.