Bitcoin: Currency of the Future or Investment Property

We live in a digital age where almost every aspect of our lives is based on computerized information. In 2009, currency became digital in the form of Bitcoin. The existence of Bitcoin has brought a variety of obstacles to government agencies and regulators. Specifically, the Internal Revenue Service (IRS) has been debating the treatment of virtual currencies such as Bitcoin for tax reporting purposes. In March 2014, the IRS issued a notice classifying Bitcoin and other convertible virtual currencies as investment property, similar to stocks and bonds. The notice from the IRS provoked outrage from the Bitcoin community. This project analyzes the current tax rules for investment property as well as the rules for foreign currency to determine whether or not the IRS decision will stand if appealed. Additionally, this project focuses on the mysterious and complex nature of Bitcoin to better understand what Bitcoin is and how the IRS arrived at their position