For anyone involved in the world of cryptocurrency, it’s been an interesting few years. Many early investors saw their chosen currencies explode in value, and then plunge soon after that. Throughout the roller coaster ride, regulators and government agencies struggled to make sense of what the crypto market actually was, how it was to be regulated, and which existing legal structures might apply.
One of the biggest grey areas that emerged from all of the scrutiny centered around how crypto assets would be treated for tax purposes, particularly in the United States, where so much of the market gains occurred. So far, there’s been no specific legal frameworks created in the US to deal with cryptocurrencies, but the IRS has issued a ruling that designates them as property — not money. That means they’re subject to capital gains tax just like stocks, bonds, and similar financial instruments.