Is bitcoin taxed?

] The first thing to know about Bitcoin is that it is property in the eyes of the IRS. Despite how you may view it or use it, the IRS says for tax purposes, bitcoin and other digital currencies are not currency; they're capital assets, which means they're taxed like stocks.

Is bitcoin an asset or a currency?

The IRS said that the bitcoin should be treated as an asset or an intangible property and not a currency, as it is not issued by central bank of a country. Bitcoin's treatment as an asset makes the tax implication clear.

Is bitcoin a good investment?

This is actually good news for long-term bitcoin owners, as it means you'll get more favorable tax treatment. "Currency is taxed at ordinary income rates, which is less favorable than capital gains tax rates," says Eric Pritz, a senior partner with Signature Estate & Investment Advisors.

How does bitcoin work?

Instead, Bitcoin uses blockchain technology to support peer-to-peer transactions between users on a decentralized network. Transactions are authenticated through Bitcoin’s proof-of-work consensus mechanism, which rewards cryptocurrency miners for validating transactions.