IRS: Bitcoin Is Not Actual Money—But It Is Property

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The Internal Revenue Service announced Tuesday that it will treat the virtual currency Bitcoin as property, not actual legal tender.

The upshot is that Bitcoin will now be treated like any other traded property, such as gold. Investors purchasing bitcoin will be required to pay capital gains taxes after selling them if they increase in value, the Associated Press reported.

Also, parties involved in handling the digital money will now be responsible for keeping much more extensive records on transactions and use.

While the move is chiefly to designate the digital money’s tax status, it is also a sign the government is taking Bitcoin more seriously as an alternative currency.

Read the full IRS release here.