US Gov Wants to Tax Gains from Bitcoin

Bitcoin regulation is starting to pick up steam; the US government now wants to tax gains from trading in the currency.

The Internal Revenue Service (IRS) has declared Bitcoin to be a “property” rather than a “currency,” therefore capital gains should be reported to the authorities. While there is yet no tax regime for the virtual currency which is now accepted by some online casinos in the UK and Canada, the declaration likely means that the government will look to start taxing transactions as soon as possible.

Capital gain refers to the profit earned when a capital asset is sold. So if someone sells Bitcoins at a higher price than what they paid for them, the difference is considered capital gains and should be reported and taxed, according to the IRS.

Industry leaders ambivalent

This has obviously drawn the ire of industry leaders, who have promoted Bitcoin specifically for the reason that it should supposed to be free from government regulators. However, Forbes reports that execs of BitGo and BitPay, two major exchanges, are fully willing to cooperate with regulators.

While regulation could make use of the currency safer and by extension fuel growth in the online and mobile casino industry (where increasing numbers of gamblers are using the currency), many voiced argue that it is essentially self-regulating. That is because all Bitcoins are tracked by the Blockchain, a database which records every transaction made with the virtual currency.