Month/Year of Graduation
Bachelor of Science (B.S.)
The current tax regulations applied to cryptocurrencies are inappropriate. The initial purpose of Bitcoin, the most popular cryptocurrency, was to circumvent the fraud associated with using credit and debit cards for e-commerce. Simply put, cryptocurrencies can be thought of as cash for the internet. The Internal Service Revenue acknowledged its use as a unit of account, store of value, and medium of exchange (the definition of a currency). Despite its function as a currency, and the IRS’s acknowledgement of this function, the new asset has been designated as property for tax purposes. Property transactions are generally taxed on realized gains. One realizes a gain on a cryptocurrency transaction when converting it to an amount in legal tender that exceeds the amount it was purchased for. Considering the high volatility of Bitcoin and other cryptocurrencies, and the substantial gains that have been realized due to this volatility, property treatment is not entirely inappropriate. However, treating it exclusively as property presents a considerable amount of issues due to its currency-like nature. This paper seeks to provide solutions to the most pressing issues by exploring the nature of cryptocurrencies, as well as the current property tax regulations in the United States.
Wilwerding, Joe, "Cryptocurrency Taxation: Suggested Revisions on Current Treatment" (2019). Theses/Capstones/Creative Projects. 72.