<p>You might not like this answer but the correct approach for figuring out taxes related to Bitcoin earnings is to ask the question to your local tax authority, in written form and get an answer that your local tax administration legally commits to.</p>

<p>I can speak only for France, but I assume the same kind of thing is possible anywhere. In France you can ask for a "rescrit" it is a written answer from the FISC (our tax authority). Once they gave you an answer they are legally obliged to stand by it.</p>

<p>There is no other correct way to account for your Bitcoin taxes than asking the people that actually can give you a definitive and legally binding answer.</p>

CC BY-SA 3.0
2013-02-05T22:57:48.333Z
Omg that _rescrit_ is so a logical, honest and straightforward thing, it is really a pain not to have it...
o0'.
CC BY-SA 3.0
2013-11-26T02:40:16.497Z
@Lohoris, until it can be forged
Pacerier
CC BY-SA 3.0
2013-11-26T08:47:54.340Z
@Pacerier no point forging it, they know if they have written it or not.
o0'.
CC BY-SA 3.0
2013-02-05T22:25:18.097Z
2013-02-05T22:25:18.097Z
David
<p>In the USA, Bitcoin earnings are treated like property.  <a href="http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance" rel="nofollow noreferrer">The full announcement is here:</a></p>
<blockquote>
<p><strong>Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply</strong> IR-2014-36,</p>
<p>March. 25, 2014 WASHINGTON —</p>
<p>The Internal Revenue Service today issued
a notice providing answers to frequently asked questions (FAQs) on
virtual currency, such as bitcoin. These FAQs provide basic
information on the U.S. federal tax implications of transactions in,
or transactions that use, virtual currency.</p>
<p>In some environments,
virtual currency operates like “real” currency -- i.e., the coin and
paper money of the United States or of any other country that is
designated as legal tender, circulates, and is customarily used and
accepted as a medium of exchange in the country of issuance -- but it
does not have legal tender status in any jurisdiction.</p>
<p>The notice
provides that virtual currency is treated as property for U.S. federal
tax purposes.  General tax principles that apply to property
transactions apply to transactions using virtual currency.  Among
other things, this means that:</p>
<ul>
<li><p>Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer  on a Form W-2, and are subject to federal income tax withholding and
payroll taxes.</p>
</li>
<li><p>Payments using virtual currency made to independent contractors and other service providers are taxable and
self-employment tax rules generally apply.  Normally, payers must
issue Form 1099.</p>
</li>
<li><p>The character of gain or loss from the sale or
exchange of virtual currency depends on whether the virtual currency
is a capital asset in the hands of the taxpayer.</p>
</li>
<li><p>A payment made using
virtual currency is subject to information reporting to the same
extent as any other payment made in property.</p>
<p>Further details,
including a set of 16 questions and answers, are in Notice 2014-21,
posted today on IRS.gov.</p>
</li>
</ul>
</blockquote>

CC BY-SA 3.0
2014-03-25T20:34:14.917Z
2014-03-25T20:34:14.917Z
2020-06-16T11:10:03.350Z
makerofthings7
<p>Should earnings in Bitcoin converter to a traditional currency be treated as trading income or non-trading income for tax purposes (for example, in <a href="http://en.wikipedia.org/wiki/Corporation_tax_in_the_Republic_of_Ireland#Tax_rates" rel="nofollow">Ireland</a>)? Reason for them being considered trading income is that the Bitcoins need to be sold at an exchange like a commodity. On the other hand, a business gains Bitcoin not necessarily through trading them for goods (say, SatoshiDice), so the other option appears viable.</p>

<p>Which approach should be taken into consideration when figuring out taxes?</p>

CC BY-SA 3.0
2013-02-04T17:11:41.347Z
I don't think you could make a universal rule about how businesses using bitcoins would be treated any more than you could make a universal rule about how businesses using the euro would be treated.
Nick ODell
<trading><legal><taxes>
Should earnings in Bitcoin converter to a traditional currency be treated as trading-income or non-trading income for tax purposes?
ThePiachu
# Should earnings in Bitcoin converter to a traditional currency be treated as trading-income or non-trading income for tax purposes?

(Asked by: username_0 on 2013-02-04)

Should earnings in Bitcoin converter to a traditional currency be treated as trading income or non-trading income for tax purposes (for example, in [Ireland](http://en.wikipedia.org/wiki/Corporation_tax_in_the_Republic_of_Ireland#Tax_rates))? Reason for them being considered trading income is that the Bitcoins need to be sold at an exchange like a commodity. On the other hand, a business gains Bitcoin not necessarily through trading them for goods (say, SatoshiDice), so the other option appears viable.

Which approach should be taken into consideration when figuring out taxes?

**Tags:** trading, legal, taxes

> **Comments:**
> **username_1**: I don't think you could make a universal rule about how businesses using bitcoins would be treated any more than you could make a universal rule about how businesses using the euro would be treated.  

---

## 2 answers

### Answer by username_2 on 2013-02-05. Score: 5

You might not like this answer but the correct approach for figuring out taxes related to Bitcoin earnings is to ask the question to your local tax authority, in written form and get an answer that your local tax administration legally commits to.

I can speak only for France, but I assume the same kind of thing is possible anywhere. In France you can ask for a "rescrit" it is a written answer from the FISC (our tax authority). Once they gave you an answer they are legally obliged to stand by it.

There is no other correct way to account for your Bitcoin taxes than asking the people that actually can give you a definitive and legally binding answer.

> **Comments:**
> **username_3**: Omg that _rescrit_ is so a logical, honest and straightforward thing, it is really a pain not to have it...  
> **username_4**: @Lohoris, until it can be forged  
> **username_3**: @username_4 no point forging it, they know if they have written it or not.  

---

### Answer by username_5 on 2014-03-25. Score: 0

In the USA, Bitcoin earnings are treated like property. [The full announcement is here:](http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance)

> **Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply** IR-2014-36,
>
> March. 25, 2014 WASHINGTON —
>
> The Internal Revenue Service today issued
> a notice providing answers to frequently asked questions (FAQs) on
> virtual currency, such as bitcoin. These FAQs provide basic
> information on the U.S. federal tax implications of transactions in,
> or transactions that use, virtual currency.
>
> In some environments,
> virtual currency operates like “real” currency -- i.e., the coin and
> paper money of the United States or of any other country that is
> designated as legal tender, circulates, and is customarily used and
> accepted as a medium of exchange in the country of issuance -- but it
> does not have legal tender status in any jurisdiction.
>
> The notice
> provides that virtual currency is treated as property for U.S. federal
> tax purposes. General tax principles that apply to property
> transactions apply to transactions using virtual currency. Among
> other things, this means that:
>
> * Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and
>   payroll taxes.
> * Payments using virtual currency made to independent contractors and other service providers are taxable and
>   self-employment tax rules generally apply. Normally, payers must
>   issue Form 1099.
> * The character of gain or loss from the sale or
>   exchange of virtual currency depends on whether the virtual currency
>   is a capital asset in the hands of the taxpayer.
> * A payment made using
>   virtual currency is subject to information reporting to the same
>   extent as any other payment made in property.
>
>   Further details,
>   including a set of 16 questions and answers, are in Notice 2014-21,
>   posted today on IRS.gov.


---

