Quote from: stevegee58 on March 27, 2013, 11:13:03 AM

Quote from: willphase on March 27, 2013, 02:07:17 AM

if you buy BTC then sell at a profit, then it's a capital gain, like if you bought some stock.

Kind of but not quite. Again, it's more like spot Forex than stocks. Forex gains are taxed like futures transactions and get 60/40 tax treatment (60% long term cap gain, 40% short term)

First, bitcoins might not be considered a foreign currency. They are not backed by any foreign currency so it seems like they would not be. But it is possible that the IRS *might* considered them to be.

Most people seem to view bitcoins as personal property which they barter with in which appreciation would be considered capital gains.

If they are foreign currency then they are only eligible for 60/40 tax treatment if you fill out the appropriate forms to elect out of IRC 988 treatment. This has to be done when you make the trade! It is likely too late for you!

And you are going to consider them a foreign currency, why not just use them to buy gold or something to avoid taxes. (I'm not sure this is possible, but I have an accountant looking into it).