Tuesday, January 21, 2014

Caution in the World of Bitcoin

Bitcoin is an interesting phenomenon. I’ve actually read a number of the technical papers, a number of legal briefs on them. I’m not anti-bitcoin or [a] bitcoin basher. I don’t invest in them personally, I don’t recommend them to clients. I understand them technically. They seem to appeal to technophiles and libertarians.

The only thing I say to bitcoin people is, watch out for a couple of things. Number one, if you buy a bitcoin at one level and you redeem it for goods or services at a higher level, you have a taxable gain you have to put on your tax return. I daresay, very few people are doing that so they’ve all sort of become tax evaders.

And, a lot of people think if you’re in the bitcoin cloud the government is not watching, they are watching. So, consider the fact that you may be a tax evader and the government is looking over your shoulder, this will play out in time. So there is a little bit of caution in the bitcoin world.

- Source, Finance News Network: