The CFTC says that Bitcoin is a commodity, what does that mean going forward?
For years now the IRS has labeled bitcoin and virtual currencies as property.
However, with several recent court cases where judges ruled bitcoin a commodity as well as the CFTC coming out yesterday and calling bitcoin a commodity, perhaps the IRS is about to change their stance...
More about that can be found here:
https://www.ccn.com/cryptocurrency-is-here-to-stay-cftc-chairman-giancarlo/
My question is.... what does that mean for US tax payers?
(Source: https://www.ccn.com/cryptocurrency-is-here-to-stay-cftc-chairman-giancarlo/)
Some specifics:
If bitcoin is considered property then one must pay taxes on its market value at the time he receives it. As would be the case if someone was paid for the work they did in bitcoin.
Then, when they went to sell that bitcoin, they would also need to figure out the gain or loss that took place over the time they held the "property".
In most cases up until this year, people who had held bitcoin and then sold it had capital gains to calculate and then pay.
(Source: https://www.istockphoto.com/photo/question-mark-gm503451949-44144520)
However, what happens if the IRS decides to take the side of several courts and the CFTC?
What kind of changes would that imply for US tax payers, if any?
If bitcoin is classified as a commodity instead of property what will that mean for tax purposes exactly?
I am unclear on this currently and look forward to hearing some thoughts in the comment section below.
Stay informed my friends.
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