IRS will tax cryptocoins as property, not currency

The United States’ tax agency, the Internal Revenue Service, clarified its position on cryptocurrencies Tuesday in a statement. The full text is below.

The biggest takeaway is that the IRS plans to tax digital currencies as property, which means that:

• anyone paid in digital currencies as a freelancer/ contractor will need to report this on Form 1099;
• profits and losses from the sale of such currencies will be subject to capital gains tax (at least if they’re used as capital assets);
• wages paid in cryptocurrencies must be reported.

Income tax for most Americans must be filed by April 15, so the timing is a bit inconvenient for those who have already filed.