It depends what you did with them.
Whether
you call Bitcoin and its peers like Litecoin and Ethereum virtual currencies,
cryptocurrencies, e-currencies, or digital currencies, what matters to the IRS
is how those currencies were held and used—as income
or property.
- If you were paid in Bitcoin or other digital
currencies, you should report your earnings as income.
- If you hold Bitcoin or other digital
currencies as a capital asset, you must treat them as property for tax purposes, thus the
earnings are capital gains.
Note: Many people have been unsure of
how to treat Bitcoin and other digital currencies, so you may have recorded
earnings incorrectly on prior returns. If you need to amend a previous return, follow these steps. (We also have a video that shows you how.)
Here’s
a list of helpful topics:
How do I report earnings or losses from Bitcoin and
other digital currencies?
How do I report Bitcoin or other cryptocurrency as a
capital gain?
I’m mining Bitcoin, what does that mean for my taxes?
I didn’t receive a 1099-MISC or 1099-B for my digital
currency earnings, do I have to report them?
