There are tax consequences of mining Bitcoin, investing in it or using it to buy or sell goods or services. Prior to the Internal Revenue Service’s release of Notice 2014-21 this week (3/25/14), we didn’t know whether the IRS would treat a virtual currency as currency or property. The IRS has now said – treat it as property. [IRS Information Release IR-2014-36 and Notice 2014-21]

I think that is a good answer. After all, Bitcoin and other virtual currencies are not used as the currency of any government and generally, are convertible to a currency of a government. For example, you can buy Bitcoin with U.S. dollars and convert it back to U.S. dollars. Read More