Are cryptocurrencies taxable?

Cryptocurrency is defined as a decentralized form of currency where no government or organization owns it. But the concept whatever you earn is yours and yours alone right?

Bitcoin is described as a digital asset or property. An asset is acquired by purchasing rights to something of value. This asset is then held by the owner and can be sold to another party on the agreement. This is basically the same process that a Bitcoin goes through, only virtually.

By establishing that cryptocurrencies are a form of property then the same taxes applied to property is referred to Bitcoin.

Record keeping has always been an essential part of taxation, especially for business. It shows the inflow and outflow of money and hence is the construct that defines how much you will be taxed. Good records will help you track the number of Bitcoins you bought, how long you held them for and at what rate you sold them for. This is precisely what happens when the IRS taxes your house or land.

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