{"id":496,"date":"2019-12-03T14:33:03","date_gmt":"2019-12-03T19:33:03","guid":{"rendered":"https:\/\/www.deluziocpa.com\/?p=496"},"modified":"2023-07-19T11:35:05","modified_gmt":"2023-07-19T15:35:05","slug":"cryptocurrency_virtualorreal","status":"publish","type":"post","link":"https:\/\/www.deluziocpa.com\/cryptocurrency_virtualorreal\/","title":{"rendered":"Cryptocurrency &#8211; Virtual or Real? The \u201cImportant Tax Information\u201d Not Received in the Mail"},"content":{"rendered":"<p><em>~ Author &#8211; Janice Hogan, Senior Tax Accountant, Deluzio &amp; Company, LLP ~<\/em><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-full wp-image-497\" src=\"https:\/\/www.deluziocpa.com\/wp-content\/uploads\/2022\/11\/cybercurrency.jpg\" alt=\"\" width=\"500\" height=\"375\" srcset=\"https:\/\/www.deluziocpa.com\/wp-content\/uploads\/2022\/11\/cybercurrency.jpg 500w, https:\/\/www.deluziocpa.com\/wp-content\/uploads\/2022\/11\/cybercurrency-300x225.jpg 300w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/>Cryptocurrency is defined as a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.<\/p>\n<p>The debate over Cryptocurrency, also known as virtual currency, began for the purpose of determining if it is \u2018virtual\u2019 or \u2018real\u2019 currency. As virtual currencies become more widely used, the IRS is issuing more guidance on how to treat transactions involving its use for federal tax purposes. The IRS defines virtual currency as \u201ca digital representation of value, other than a representation of the U.S. dollar or a foreign currency (\u201creal currency\u201d), that functions as a unit of account, a store of value, and a medium of exchange.\u201d The IRS further recognizes that virtual currencies are being exchanged and used in transactions which are equivalent in real currency or acting as a substitute for real currency. Depending on how the virtual currency is used, the transaction may result in a tax liability, or a tax deduction.<\/p>\n<p>Virtual currency transactions can have a variety of tax treatments which may involve property, capital gain or loss, or ordinary income, depending on the nature of the transaction. There are additional considerations of determining value or basis, such as using USD fair market value, or calculating cost basis.<\/p>\n<p>Are you using or considering using virtual currency as an investment, or as currency in the exchange of goods and services?<\/p>\n<p>If you have questions regarding the tax implications of using Cryptocurrency, contact our office for further guidance.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>~ Author &#8211; Janice Hogan, Senior Tax Accountant, Deluzio &amp; Company, LLP ~ Cryptocurrency is defined as a digital currency in which encryption techniques are used to regulate the generation &hellip;<\/p>\n","protected":false},"author":2,"featured_media":497,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[14,1],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Cryptocurrency - Virtual or Real? 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