Virtual Currency (IRS Definition)

Internal Revenue Service currently defines virtual currency as a digital representation of value that functions as a medium of exchange, unit of account, and/or store of value. However, virtual currency is not recognized as legal tender in any jurisdiction. For federal tax purposes, the IRS treats virtual currency as property, meaning general tax principles applicable to property transactions also apply to virtual currency transactions.

What You Need To Know

It is very important to follow all the current information regarding the IRS laws with digital assets and cryptocurrencies. Being a newer technology and having intensive legislative scrutiny over the past few years always review up to date information.