Is Bitcoin Taxed by the Government?

An Asset, Not a Currency

Despite Bitcoin being a cryptocurrency (which has “currency” in the name), the US government doesn’t view it as a currency. They call it an asset because it’s not being distributed by a central bank.

Capital and Income Tax

Let’s say you’re mining your own Bitcoin and sell it to someone else for US dollars. This transaction is subject to tax the same way a business or personal income is.

Short Term vs Long Term

The differentiating factor between long term and short term capital gains tax is if the investor held their coin for over or under a year. If it is less than a year, the capital gains tax is the same as the income tax for that investor. However, long term capital taxation is much more complex.

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Coin Cloud

Coin Cloud

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The world’s leading operator of two-way Digital Currency Machines (DCMs), more advanced Bitcoin ATMs.