As many of you know who follow TaxConnections Worldwide Tax Blog, I enjoy dabbling in the uncharted waters of the United States Tax Code. It helps me keep fresh. One of the many areas that this includes is the tax treatment of virtual currencies.

With the most recent run up in the price of Bitcoins there were a handful of very fortunate people that quite literally amassed multi-generational wealth over just a few short weeks cashing out their Bitcoins all the way to $1,000 per coin. You know who you are. May God bless you on your journey that you use this new found wealth for good.

Fortunately in your favor the IRS produced Notice 2014-21 explaining how existing general tax principles apply to transactions using virtual currencies, including Bitcoin. The Read More