James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comKey Contacts
Back
Are Bitcoins Taxable? Bitcoins are becoming more visible and popular among consumers, and many investors are even focusing on the prospects that this digital currency may yield. As the demand for Bitcoins – which are used in a digital environment as real cash – increases significantly, the Internal Revenue Service may set its sights on the currency as taxable income.
A recent article in Business Insider noted that the value of Bitcoins have nearly tripled since March alone, and are currently valued at $115. Some analysts predict that as the value of Bitcoins continue to increase and demand grows, new potential tax law guidelines may come into play, the news source theorized.
Some have argued that the U.S. may not focus too heavily on taxing the currency because they are not recognized as legal currency, save for the online world, and they receive financial backing from governments around the globe, Business Insider added. As a result of these stipulations, many who are opposed to taxing them argue that if the currency is not recognized, it should not fall under tax rules.
However, many users are finding ways to add real value to the Bitcoins, which may result in taxation down the road. For example, some users can visit online currency exchange websites and sell Bitcoins for real currency, including USD, the article noted. As a result, this may be considered income under federal law, and therefore taxable.
“As soon as you go to exchange them for dollars, you definitely have a tax obligation on that,” David Stewart, an international tax reporter for Tax Analyst, told the news source. “There is value in Bitcoins, whether or not people outside the Bitcoin community believe it.”
When it comes to businesses that accept Bitcoins, IRS spokesperson Anthony Burke told the Huffington Post that the agency is trying to classify whether payments should be considered payments in foreign currency, barter or in-kind payments, as these may each fall under different tax guidelines.
- Practices: Tax and Trusts & Estates
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
When Are New Jersey Business Owners Personally Liable for Corporate Debt?
New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
Author: Charles H. Friedrich
Commercial Real Estate Trends to Watch in 2026
Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
Author: Michael J. Willner
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know
Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]
Author: Scott H. Novak
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know
Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]
Author: Scott H. Novak
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business
In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]
Author: Dan Brecher
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026
For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]
Author: Ken Hollenbeck
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.