The document provides an overview of Bitcoin and how it is taxed according to IRS guidance. Some key points:
- Bitcoin is considered property, not currency, for tax purposes by the IRS, making transactions more complex.
- Gains or losses from buying, selling, exchanging or mining Bitcoin are taxable events.
- Record keeping for basis is important to determine capital gains or losses when Bitcoin is disposed of.
- Employers must withhold taxes and issue W-2s for salaries paid in Bitcoin.
- Representatives need to educate auditors on how Bitcoin works using the transparent ledger to substantiate transactions.
Digital Currency Systems: Emerging B2B e-Commerce Alternative During Monetary...cjwells
Digital currency systems form the triumvirate nexus of government policies, money, and technology. Each has a global reach and responds to the needs of business and consumers. E-commerce depends on private and government financial institutions to enable payment transactions, the basis of e-commerce. As the United States financial crisis continues B2B enterprises may need to abandon traditional payment transaction systems and look to alternatives in the form of Web-based digital currency systems accessed via the Internet. The various types of digital currency systems generally fit into five categories: barter exchange software systems, non-bank digital currency payment systems, digital precious metal systems, online value transfer software systems, and online stored value transaction software systems. Digital currency systems are not online banking. Digital currency systems use private electronic monies: electronic tokens, barter-exchange currencies, digital cash, and stored value e-cash vouchers.
We explore the history of money against a backdrop of banking and government policies that cause cyclic monetary crises, how these current digital systems operate, how business can thereby benefit in their use, and why digital currency systems are such an underutilized service in the United States.
Bitkingdom- Earn Daily on Bitcoins Invested.Oomeysh zk
What is BitKingdom ?
BitKingdom is a type of community banking system that uses Bitcoin as a medium of value.
BitKingdom is NOT a pyramid or a ponzi scheme. We empowering people to be in control of their assets and equalize the wealth within the community itself.
We are committed in making sure this community lasts and does good to the people in it. Our mission statement is to empower community and to end poverty.
BitKingdom Community is a trusted global community center, where everyone will be able to provide help and in return, get help within the BitKingdom community.
Unlike traditional distribution system, we empower the use of Bitcoin technology into our system for our members.
At BitKingdom Community, we serve the community at our highest priority. We optimized the distribution of financial aid among participants through our ground breaking algorithm.
The community are the people, and we are the community.
*PROVIDING HELP & GETTING HELP This concept has been used by many wealth distribution network which equalize profit distribution using matching algorithms.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
What is Bitcoin ?
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
It’s the first example of a growing category of money known as cryptocurrency.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
What makes it different from normal currencies?
Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Digital Currency Systems: Emerging B2B e-Commerce Alternative During Monetary...cjwells
Digital currency systems form the triumvirate nexus of government policies, money, and technology. Each has a global reach and responds to the needs of business and consumers. E-commerce depends on private and government financial institutions to enable payment transactions, the basis of e-commerce. As the United States financial crisis continues B2B enterprises may need to abandon traditional payment transaction systems and look to alternatives in the form of Web-based digital currency systems accessed via the Internet. The various types of digital currency systems generally fit into five categories: barter exchange software systems, non-bank digital currency payment systems, digital precious metal systems, online value transfer software systems, and online stored value transaction software systems. Digital currency systems are not online banking. Digital currency systems use private electronic monies: electronic tokens, barter-exchange currencies, digital cash, and stored value e-cash vouchers.
We explore the history of money against a backdrop of banking and government policies that cause cyclic monetary crises, how these current digital systems operate, how business can thereby benefit in their use, and why digital currency systems are such an underutilized service in the United States.
Bitkingdom- Earn Daily on Bitcoins Invested.Oomeysh zk
What is BitKingdom ?
BitKingdom is a type of community banking system that uses Bitcoin as a medium of value.
BitKingdom is NOT a pyramid or a ponzi scheme. We empowering people to be in control of their assets and equalize the wealth within the community itself.
We are committed in making sure this community lasts and does good to the people in it. Our mission statement is to empower community and to end poverty.
BitKingdom Community is a trusted global community center, where everyone will be able to provide help and in return, get help within the BitKingdom community.
Unlike traditional distribution system, we empower the use of Bitcoin technology into our system for our members.
At BitKingdom Community, we serve the community at our highest priority. We optimized the distribution of financial aid among participants through our ground breaking algorithm.
The community are the people, and we are the community.
*PROVIDING HELP & GETTING HELP This concept has been used by many wealth distribution network which equalize profit distribution using matching algorithms.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
What is Bitcoin ?
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
It’s the first example of a growing category of money known as cryptocurrency.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
What makes it different from normal currencies?
Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
An introduction to bit coins and bit coin miningAnirudh Kadevari
Bit coins a buzz word today it is the digital currency that is one of the most convenient method of modern electronic payment system this presentation gives an overview of what bit coins are and how are they mined and certain hardware trends to mine bit coins..
Selling bitcoin isn't quite as straightforward as buying bitcoin, but fortunately CoinDesk is here to help. This guide will give you all the information you need to cash out your digital currency.
In this presentation, I have clearly explained how you can calculate your crypto taxes in India. I have also presented necessary tools that can come in really handy when you calculate your crypto tax.
Bitcoin is a cryptocurrency and a virtual type of money. It’s really like having an online version of money or cash.
You can use Bitcoin to purchase products and services and more and more vendors are accepting Bitcoin as a form of payment these days.
Now is a very good time to take an interest in Bitcoin and invest in it. It has been going strong for 10 years and its popularity has soared.
In order to make the best returns on Bitcoin investments you need to understand what it really is and how it works.
With this step by step guide:
you will learn how to avoid scams in cryptocurrency
you will learn how work the blockchain technolog
you will be able to keep your bitcoins safe in the best wallets
you will know the best way to obtain bitcoins and the best investment strategies
you will learn the advice you need to follow to make a good return on your investment
Bitcoin is a peer-to-peer electronic cash system and the first truly decentralized network for sending and receiving value over the Internet. This presentation gets into the details of the technology and answers common questions related to the bitcoin, how it works.
Bit Coins are one most disruptive technologies in recent times with an impact that may ultimately be as big as the internet. Bitcoin uses peer-to-peer technology to operate with no central authority or banks. Managing transactions and the issuing of bitcoins is carried out collectively within a network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and anyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system. Bitcoin is a virtual currency and the Bitcoin user experience will be very important for widespread adoption and use. In my talk I am going to talk about the evolution of currency, crypto currencies and Bit Coins. I will also discuss Bitcoin experiences and the Bitcoin platform eco-system, Bit Coin facts, and the possible future of Bit Coins.
BITCOIN, ONLINE PAYMENTS AND THE SCOURGE OF PAYPALSteven Rhyner
From 2003 to 2012, I built up and ran a technology blog called ReadWriteWeb (RWW). At its peak, it had over 20 people working for it, nearly all of them in the US.
Bitcoin is a peer-to-peer payment system introduced as open source software in 2009. The digital currency created and used in the system is also called bitcoin and is alternatively referred to as a virtual currency, electronic money, or crypto currency.
Bitcoin is a consensus network that enables a new payment system and completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
An introduction to bit coins and bit coin miningAnirudh Kadevari
Bit coins a buzz word today it is the digital currency that is one of the most convenient method of modern electronic payment system this presentation gives an overview of what bit coins are and how are they mined and certain hardware trends to mine bit coins..
Selling bitcoin isn't quite as straightforward as buying bitcoin, but fortunately CoinDesk is here to help. This guide will give you all the information you need to cash out your digital currency.
In this presentation, I have clearly explained how you can calculate your crypto taxes in India. I have also presented necessary tools that can come in really handy when you calculate your crypto tax.
Bitcoin is a cryptocurrency and a virtual type of money. It’s really like having an online version of money or cash.
You can use Bitcoin to purchase products and services and more and more vendors are accepting Bitcoin as a form of payment these days.
Now is a very good time to take an interest in Bitcoin and invest in it. It has been going strong for 10 years and its popularity has soared.
In order to make the best returns on Bitcoin investments you need to understand what it really is and how it works.
With this step by step guide:
you will learn how to avoid scams in cryptocurrency
you will learn how work the blockchain technolog
you will be able to keep your bitcoins safe in the best wallets
you will know the best way to obtain bitcoins and the best investment strategies
you will learn the advice you need to follow to make a good return on your investment
Bitcoin is a peer-to-peer electronic cash system and the first truly decentralized network for sending and receiving value over the Internet. This presentation gets into the details of the technology and answers common questions related to the bitcoin, how it works.
Bit Coins are one most disruptive technologies in recent times with an impact that may ultimately be as big as the internet. Bitcoin uses peer-to-peer technology to operate with no central authority or banks. Managing transactions and the issuing of bitcoins is carried out collectively within a network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and anyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system. Bitcoin is a virtual currency and the Bitcoin user experience will be very important for widespread adoption and use. In my talk I am going to talk about the evolution of currency, crypto currencies and Bit Coins. I will also discuss Bitcoin experiences and the Bitcoin platform eco-system, Bit Coin facts, and the possible future of Bit Coins.
BITCOIN, ONLINE PAYMENTS AND THE SCOURGE OF PAYPALSteven Rhyner
From 2003 to 2012, I built up and ran a technology blog called ReadWriteWeb (RWW). At its peak, it had over 20 people working for it, nearly all of them in the US.
Bitcoin is a peer-to-peer payment system introduced as open source software in 2009. The digital currency created and used in the system is also called bitcoin and is alternatively referred to as a virtual currency, electronic money, or crypto currency.
Bitcoin is a consensus network that enables a new payment system and completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
Let’s know your cryptocurrency now! here’s the answer to how do i buy cryptoc...Bitcoin Wallet Canada
The bitcoin system is a system of digital currency. In particular, a bitcoin functions as a digital asset, serving as a medium of exchange. Like other cryptocurrencies, the bitcoin system relies on cryptography to ensure that transactions remain secure.
This presentation talks how the Bitcoin works, what is the history of Bitcoin, features of Bitcoin, Bitcoin Mining, advantages, and disadvantages. It explains briefly about Bitcoins in India.
What is Bitcoin and How is it related to Satoshi Nakamoto White Paper.pdfSuraj Sharma
Well the terms like bitcoin & block chain are being coined and referred to everywhere over the internet or over any investment or financial platform the reason being its increasing popularity and the mammoth returns that people have made by investing in these avenues.
Although the concept of bitcoin is known to many but still there are many that are confronted with this question that what is a bitcoin and how does it work? so, in this blog I have made a sincere effort to explain the same in the easiest of manner for you to understand this concept. So as we move ahead we will dive in this concept of What is Bitcoin? How is it related to White paper of Satoshi Nakamoto? to understand the basics of bitcoins and how would its future be like.
The term crypto currency is being coined everywhere due to its increased popularity worldwide, it is being looked at with great aspiration to park one’s money for a lucrative and manifold return. One can well imagine the return percentage on his/her investment in bitcoins by the fact that 1 bitcoin was worth $0 in 2009 and it now values at $55,353 (at the time of writing this article).
This means you could have been a millionaire or a billionaire if a reasonable investment was made in bitcoins in 2009 and was to be redeemed now.
Cryptocurrency- A Digital asset as a medium of exchange:
Crypto currency is a digital asset that is designed in such a manner that it offers the benefits of a medium of exchange like any other currency, so you can buy any item in exchange of these digital assets that you possess from the seller that accepts these forms of payments.
These digital assets are stored in computerized databases as they do not exist in physical form, using strong cryptography to secure the transaction records.
Decentralized Cryptocurrency Explained in Easy:
Whenever these digital currencies are minted, mined or created by the originator , the process is said to have exercised a centralized control, however when these are further disseminated to larger groups a decentralized control is said to have exercised. Each cryptocurrency functions through a distributed ledger technology that is typically known as block chain technology that serves as a public financial transaction database.
Although there are several other Cryptocurrencies that exist in the digital world and they too have offered good returns over a period of time, but the major issue involved in these digital currencies is that they are not backed by any of the apex bank of any country nor do they are traded in any banking channel.
Usually these digital currencies or cryptocurrencies that are not backed by any government or banking channel have no intrinsic value and nor do they will have in future.
Their values are derived purely on the basis of market forces of demand and supply and are a private fiat money. The market of these digital assets is highly volatile and have no capping on their price increase or decrease.
The Bitcoin fever is spreading much faster than it was anticipated. It has grabbed the attention of speculators, investors, bankers and regulators around the world.
This reminds us of a popular quote ‘The more things are forbidden, the more popular they become’- Mark Twain.
In this lesson, we make an attempt to demystify the term ‘Bitcoin’.
All you want to know about #cryptocurrency and blockchain as well as hashing bitcoin.
- there are something is so difficult to understand in the power point but don't hesitate and write down your comment and surly i will make it easier for you.
In this issue of Math in the News we explore Bitcoin. We look at how it's used for making purchases and how it differs from other currencies. This provides an opoortunity to apply the concept of currency exchange.
Presentation to the Pittsburgh Association of Financial Professionals discussing Crypto-currencies and Blockchain. Emphasis on the importance of expanding familiarity with virtual currency and Blockchain technology. Exploring the potential for both utility and disruption for financial professionals.
Nuv Mining is the world's leading hashpower provider, offering cryptocurrency mining capacities in every range - for newcomers, interested home miners, as well as large scale investors. No longer it is required to buy expensive equipment and waste your time on setting it up.
1. Bitcoin and Virtual Currencies:
Understanding What They Are and How They Are Taxed
2. Jonathan Morton
Di Monte & Lizak, LLC
216 Higgins Road
Park Ridge, IL 60068
847.698.9600
jmorton@dimontelaw.com
James Creech
Law Offices of James Creech
30 N LaSalle St Suite 2825
Chicago IL 60602
(312) 469-0883
jcreech@creechtaxlaw.com
3. Three Takeaways from
Today’s Presentation
• Bitcoin Is Misunderstood. Instead Of Seeing It As A
Currency It Should Be Thought Of As A Technology
• The Current Set Of IRS Rules Make Bitcoin
Unwieldy And Difficult To Use
• Bitcoin Misconceptions Will Make Audits And
Controversies More Difficult
6. The Following Companies
Accept bitcoin
• Expedia - Discount Travel Website
• newegg.com - Electronics Retailer
• overstock.com - Clothing And Home Goods
• Dell - Computer Maker
• Microsoft Digital Content
• Sacramento Kings - NBA Team
7. In Addition To Being A Virtual
Currency Bitcoin Is Also A
Technology
8. Bitcoin The Technology
Is
A Globally Distributed
Transaction Database Where
The Order Of Transactions Is
Determined By Everyone
10. The Basic Rules Of Bitcoin Were
Created By The Original Code
• How Transactions Work
• The Rewards For Processing Transactions
• How Often Transactions Are Confirmed
• How Many Coins Are Available. This Is A Limited
Number That Is Released In Decreasing Amounts
As Rewards For Processing Transactions
12. • There are three important parties in every bitcoin transaction. The
buyer, the seller, and the miner.
• Buyer and Seller each have a key.
• The Buyer has a private key which is equivalent to secure password for
the account that contains his bitcoins. The private key would look
like:18E14A7B6A307F426A94F8114701E7C8E774E7F9A47E2C2035D
B29A206321725
• The Seller has a public key which is equivalent to a bank account
number. This public key would look like:
3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy
• The Seller provides the Buyer with his public key and the Buyer enters
his private key and the amount of bitcoins to be transferred to the Seller
13. • The public and private keys are combined and published to the Bitcoin
network
• The Bitcoin network computes the transaction and orders it amongst
other bitcoin transactions using timestamp and a mathematical formula.
The network confirms that the Buyer owns enough coins to complete the
transaction based upon previous transfers and then uses a random
mathematical outcome to confirm the transaction. There are thousands
of computers all competing to solve the formula at the same time
• The first computer to solve the mathematical formula associated with the
transaction produces a Hash
• A Hash is a combination of the private key and the public key which
results is a new code such as:
D61967F63C7DD183914A4AE452C9F6AD5D462CE3D277798075B1076
15C1A8A30
14. • This code is a one directional code meaning you can see what the
Buyer’s and Seller’s keys are but you cannot alter the keys without
changing the Hash
• The individual computer publishes the Hash to the network. Other
computers verify the Hash is correct
• If the Hash is correct it goes into the blockchain. Every 10 minutes a
blockchain is updated and the transfer is complete
• The computer that correctly generated the Hash is rewarded with
new bitcoins. The number of bitcoins rewarded is based upon the
original bitcoin code and the number of bitcoins currently in existence
• This process of verifying transactions in exchange for new bitcoins is
called Mining
15. Anyone Who Is Interested Can
Search The Blockchain And Learn
The Time, The Amount Of The
Transfer, And The Keys That Are
Making The Transfer
16. The Only Thing The Public Does Not Know
Is Who Owns Bitcoin Keys Involved In The
Transaction
Bitcoin Transactions Are Anonymous
18. • Transaction Fees
Anonymity
Minimal Equipment Is Needed To Access A
Bitcoin Based Financial System
Speed
Security
Ability to Do Business With Someone You
Don’t Trust
20. Notice 2014-21 Covers All
Virtual Currency Not Just bitcoin
• What Is Virtual Currency For Tax Purposes?
• How Should bitcoin Gains Or Losses Be Treated?
• How Should Exchanges Of property For bitcoin Be Treated?
• What Are The Reporting Requirements?
• Withholding Requirements
• How Is Mining Treated?
• Penalties For Inconsistent Treatment
21. The IRS Considers bitcoin
To Be Property
• bitcoins Are Not Currency For Tax Purposes
• Have To Use General Tax Principles From Property
And Barter Transactions To Determine Tax
Implications Of bitcoin Transactions. This Makes
Simple Transactions More Complicated And
Requires More Record Keeping
• Virtual Currencies Must Be Priced If There Is A
Taxable Event. However The Taxpayer May Do
This Valuation Using Any Reasonable Method
22. When We Have A Client With bitcoin
Gains Or Losses There Are A Minimum
Of Three Questions You Need To Ask:
How Did You Get The bitcoin?
How Long Have You Held It?
What Did You Get Upon Dispossession?
23. bitcoins Become More Complicated
When Exchanged For Services
• Notice 2014-21 Imposes The Same Withholding
Restrictions As Bartering For Services For Both
Independent Contractors And Employees
• If The Services For An Independent Contractor Are Over
$600 In bitcoin Converted To Dollar Terms The Payor Is
Responsible For Issuing A 1099
• If An Employee Is Paid In bitcoin The Employer Must
Issue A W-2 That Provides The Wages In Dollars. They
Must Withhold Income And Employment Taxes In Dollars
24. Bitcoin Mining
If A Taxpayer Owns A Computer That Verifies bitcoin
Transactions And Is Rewarded With bitcoins, The
bitcoins Are Immediately Considered Income
If The Mining Activities Are A Trade Or Business They
Owe Employment Taxes On That Income As Well
26. Hypo 1
Bill Is A Web Designer. He Prepares A
Website For Steve’s CPA Firm. Steve
Pays Him 2.775301 bitcoins (BTC) For
The Website On March 12. The Value
Of bitcoin On March 12 Was $500.
27. Hypo 1
Bill Has Income. His Income Is 2.775301
BTC x $500 Or $1387.65
Steve Has A Business Expense Of $1387.65
Steve May Also Have Capital Gains Based
Upon His BTC Basis
28. Hypo 1
Both Steve And Bill Need To Document The Transaction
More Extensively Than They Would If Steve Paid With A
Check
Steve Would Have To Substantiate How He Got His bitcoins,
How Long He Had Held Them, And Any Gain Or Loss That
Occurred Based Upon The Fair Market Value Of Bill’s
Services
Bill Would Have To Keep A Record Of What His Basis Is In
The bitcoin For A Future Transaction
29. Hypo 2
Sue Is Employed By An App Developer. The Developer Pays Her
In bitcoin. Sue’s Salary Is 160 BTC (Roughly $80,000 At $500
Per BTC) Per Year And She Gets Paid 6.15 BTC Every Two
Weeks. At The Start Of The Year BTC Is Worth $500 But It
Fluctuates During The Year. Sue Converts 4 BTC Into Dollars
Every Pay Period To Pay Bills. She Saves The Rest Because
She Is Planning On Quitting Next Year And Traveling The World.
30. Hypo 2
Sue’s Employer Requirements
Sue’s Employer Is Still Responsible For Sue’s Withholdings.
It Must Withhold Both Income And Employment Taxes For
The BTC It Pays Sue. These Withholdings Have To Be Paid
In US Dollars. The Employer Must Calculate The Wages It
Paid Sue In Dollars And Issue Sue A Dollar Based W-2
31. Hypo 2
Sue’s Impact - Income Tax
Sue Has Ordinary Income Based Upon The
Wages She Received From Her Employer. She Is
Responsible For Paying Tax On That Income
Based Upon The FMV Of The bitcoin She
Received. She Must Pay Her Taxes In Dollars
32. Hypo 2
Sue’s Impact - Converting BTC To Dollars
In Addition To Ordinary Income, Sue Also Has Gains And Losses
From Converting BTC To Dollars Based Upon The Volatility Of BTC
during her holding period.
For Example If Sue Is Paid 6.15 BTC On Friday. On Friday BTC has
A Value Of $500 Per BTC. By The Time She Converts 4 BTC To
Dollars On Tuesday, BTC Has Fallen To $440. Sue Has A $240 Short
Term Capital Loss.
When It Is Time To Go On Vacation 18 Months Later, Sue Converts
The Remaining 2.15 BTC To Dollars. During That Time BTC Has
Risen To $800. She Has A Long Term Capital Gain Of $645. She
Must Do This Calculation Separately For Every Pay Period.
33. Hypo 3
Ted Is A Computer Parts Vendor. He Buys And Resells
New And Used Computer Equipment Online. He
Purchases Six “Fast-Hash-One Platinum bitcoin Mining
Machines” Online. Ted Pays 12 BTC Each At $500 Per
bitcoin. Ted’s Basis In Each bitcoin Used To Buy The
Machines Is $300. He Then Immediately Resells Five Of
The Machines At 13 BTC At $530 Per bitcoin. Ted Keeps
One Machine And Uses It To Mine bitcoins.
34. Hypo 3
Ted’s Basis In Each Machine Is The Number Of BTC He Paid For
Each Machine Multiplied By The Exchange Rate Of BTC At The Time
Of The Purchase. Ted’s Basis In Each Of The Machines Is 12 x $500
Or $6000. He Sold Them For 13 x $530 Or $6890. Ted’s Ordinary
Income From The Sale Is $890 Per Machine Or $4450 For 5
Machines. In Addition To Ordinary Income, Ted Also Has A Capital
Gain From The Appreciation Of The bitcoin Used To Buy The
Machines. This Gain Would Be $200 Per BTC or $14,400 (12 BTC x 6
Machines x $200). His New Basis In The BTC received Is $530
When Ted Mines bitcoins With The Machine He Kept He Has Ordinary
Income When The bitcoin Is Mined. He May Owe Employment Taxes
If The Mining Activity Is More Than Just Sporadic
36. Audits Of Clients With bitcoin
Gains And Losses Are Coming
• Prior To 2013 The Price Of bitcoin Was Not
Sufficient To Lure Speculators And Business Users.
• The Notoriety And Volatility Have Increased Number
Of Taxpayers Will Have Taxable bitcoin
Transactions
37. bitcoin Price Fluctuations
• In 2010 The Price Of bitcoin Was $.01, In 2012 The
Price Was $4.70. On January 1, 2013 The Price Was
$13.55
• On November 17, 2013 bitcoin Hit An All Time High
Of $1216.73
• The Price Of bitcoin Then Crashed To $340 In April,
2014 Only To Rebound To $650 In June Of 2014
• The Price Of bitcoin In Early January 2015 was $270
38. Before The Audit Begins
• Request The Client Provide You Will All
Documentation Relating To The Transactions
• Ask The Client To Go Into Their bitcoin Wallet And
Provide You With Their Public Key Information As
Well As Any Transaction Confirmation Messages
• Document What The Holding Periods Were For
Each bitcoin Transaction
39. During The Audit The First
Job Is Education
• Demystify bitcoin And It’s Uses. Show The Auditor How
It Is Used For More Than Money Laundering And Buying
Illegal Items
• Explain How The Open Source Ledger Works And How
It Makes It Possible To Find The Date And Time The
Transfer Was Made.
• Show Them How To Look Up The Historical BTC To
Dollar Exchange Rate
• Have A Copy Of Notice 2014-21
40. The Message Should Be: bitcoin Is
New But It Is Transparent. We Can
Substantiate Everything Using
Publicly Available Information
41. Be A Resource To The Agent
You Will Most Likely Understand The Issue
And The Mechanics Better Than They Do