Photo: Flickr BTC Keychain
Bitcoin: Passing Fad, Disruptive
Technology? Either Way, It’s Now Taxable!
Tom Hood, CPA, CITP, CGMA
Tom Hood, CPA, CITP, CGMA
CEO
MACPA www.macpa.org
and
Business Learning Institute (BLI)
www.blio...
4 Careers Bitcoin can Disrupt
• Bankers
• Cashiers
• Armored Car
Drivers
• Accountants
Is Bitcoin a bubble?
Source: CoinDesk
Closing Price $817.12 as of Dec 30, 2013
Bitcoin Theft Makes Headlines
Bitcoin hit new
low of $557.40
on news of Mt.
Gox (Japanese)
Bitcoin Exchange
theft of Bitco...
More Bad News:
Apple removes Block Chain from App Store
Bitcoin Price 3/30/14
Down 43% since
year-end
Source: CoinDesk
How a Bitcoin Transaction Works
Source: PC World – 7 Things You Need to Know About Bitcoin
How Bitcoins are Circulated & Used
Source: GAO Report
Bitcoin Transaction Documentation
Source: Bitcoin: A Peer-to-Peer Electronic Cash System
Could this
replace the
general le...
Congress, GAO, FBI, and Treasury
Study Virtual Currencies
Congress started studying the economic and tax issues with a hea...
IRS Issues Virtual Currency Guidance
on March 25, 2014
Three Types of Virtual Currency Systems
Source: GAO Report
Generally not taxable Most likely taxableCould have taxable iss...
Virtual Currency Tax Issues
1.Taxpayer lack of knowledge about tax
requirements
2.Uncertainty over how to characterize inc...
7 Things to Know About Bitcoin
1. Bitcoins are created, traded and
controlled by the people
2. We’re definitely in a Bitco...
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Bitcoin - Passing Fad? Disruptive Technology? Either Way It's Now Taxable!

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Bitcoin has been making major headlines recently. Starting with a year-end high price of $817.12 which would have returned 56X or 5,600% in 2013 to the over $500 million theft from the Japanese exchange Mt. Gox in February. Then Apple removes the Bitcoin app from its app store and finally the IRS announces its position on the taxability of virtual currencies on March 25, 2014.

Which raises the question, is Bitcoin a passing fad or disruptive technology that we need to take seriously?

This deck covers the background and latest information about Bitcoin and the IRS guidance on taxation and virtual currencies.

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Bitcoin - Passing Fad? Disruptive Technology? Either Way It's Now Taxable!

  1. Photo: Flickr BTC Keychain Bitcoin: Passing Fad, Disruptive Technology? Either Way, It’s Now Taxable!
  2. Tom Hood, CPA, CITP, CGMA Tom Hood, CPA, CITP, CGMA CEO MACPA www.macpa.org and Business Learning Institute (BLI) www.blionline.org http://www.linkedin.com/in/tomhood/ If there is a conversation about the future of the profession, you're bound to hear Hood's name mentioned as one of the people leading the way. – Accounting Today Magazine • Named the Second Most Influential in Accounting by Accounting Today Magazine 2013 • Linked-In Top 150 Influencer • Top 25 Influencers in Learning & HR by HR Examiner • Top 25 Thought Leaders in Public Accounting by CPA Practice Adviser • Working on Learning Management with AICPA/CPA2Biz, Cloud Curriculum, Performance Management
  3. 4 Careers Bitcoin can Disrupt • Bankers • Cashiers • Armored Car Drivers • Accountants
  4. Is Bitcoin a bubble? Source: CoinDesk Closing Price $817.12 as of Dec 30, 2013
  5. Bitcoin Theft Makes Headlines Bitcoin hit new low of $557.40 on news of Mt. Gox (Japanese) Bitcoin Exchange theft of Bitcoins.
  6. More Bad News: Apple removes Block Chain from App Store
  7. Bitcoin Price 3/30/14 Down 43% since year-end Source: CoinDesk
  8. How a Bitcoin Transaction Works Source: PC World – 7 Things You Need to Know About Bitcoin
  9. How Bitcoins are Circulated & Used Source: GAO Report
  10. Bitcoin Transaction Documentation Source: Bitcoin: A Peer-to-Peer Electronic Cash System Could this replace the general ledger for documenting transactions?
  11. Congress, GAO, FBI, and Treasury Study Virtual Currencies Congress started studying the economic and tax issues with a hearing by a Joint Economic Task Force on April 1, 2008 to the GAO report on May 15, 2013. The FBI, Treasury and the National Taxpayer Advocate all were investigating the fast growing economies of virtual goods and virtual currencies that started with World of Warcraft & Second Life.
  12. IRS Issues Virtual Currency Guidance on March 25, 2014
  13. Three Types of Virtual Currency Systems Source: GAO Report Generally not taxable Most likely taxableCould have taxable issues
  14. Virtual Currency Tax Issues 1.Taxpayer lack of knowledge about tax requirements 2.Uncertainty over how to characterize income 3.Uncertainty over how to calculate basis for gains (capital gains / barter) 4.Challenges with third-party reporting (1099s) 5.Evasion Source: GAO Report
  15. 7 Things to Know About Bitcoin 1. Bitcoins are created, traded and controlled by the people 2. We’re definitely in a Bitcoin bubble 3. You can mine Bitcoins but the gold rush is over 4. Most major retailers don’t accept Bitcoins 5. Bitcoins aren’t protected or insured by anyone 6. Nobody knows who really created Bitcoin 7. Bitcoins aren’t the first virtual currency and won’t be the last Source: PC World – 7 Things you need to know about Bitcoin by Alex Wawro

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