Quote from: Photony on Today at 05:54:53 AM

That’s potentially huge news for retail US citizens, but there is also huge news for US Bitcoin businesses.

Most US businesses use the US dollar as their unit of account for bookkeeping and reporting. However, there are cases where businesses operating primarily in foreign jurisdictions use a foreign currency—the unit of account does not have to be USD. The unit of account used by the business is the “functional currency” of the business and, perhaps, even an individual (see Sec. 985 IRC). If a business’s “functional currency” is a foreign currency, it does not have to bother with gains/losses related to USD fluctuations.

Again, under Notice 2014-21, Bitcoin cannot qualify as a functional currency. And, again, this could change if El Salvador adopts Bitcoin as legal tender.

Final tldr If Bitcoin becomes legal tender in El Salvador, IRS Notice 2014-21 may become partially null, relieving US individuals and business of huge tax and reporting burdens, paving the way for Bitcoin to legally and easily be used as a currency in the US.

Disclaimer: I am not a tax lawyer. The discussion and analysis on this should be much more detailed before financial decisions are made. I’ve written this to be used as a starting point for discussion with a tax lawyer.

I am impressed with El Salvador President decision. This may be amazing for El Salvador and their citizens.

Look at Forbes

Quote

Most importantly, El Salvador’s decision has ramifications for one of the greatest sources of skepticism for Bitcoin’s staying power: the theory that the U.S. will ban the digital currency if it ever becomes a true competitor to the U.S. dollar. “Bitcoin’s greatest risk is its success,” said Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, at the Consensus cryptocurrency conference in May. But banning the official national currency of another country would be an unprecedented step for the U.S., one that could, on its own, undermine the greenback’s utility as the world’s premier fiat currency.

El Salvador may be the smallest country in North America. But if President Bukele’s bitcoin proposal becomes law, El Salvador could become one of the most significant monetary centers in the world.
https://www.forbes.com/sites/theapothecary/2021/06/07/el-salvador-to-make-bitcoin-legal-tender-a-milestone-in-monetary-history/?sh=66adc6f075b9

Imagine what could happen with bitcoin price continues to increase by 10-20-30x in the next years, as we are used to see? This could bump all Salvador economy

El Salvador is also becoming a natural destination of many cryptocurrency milionaires, who will try to go there to avoid paying huge tax gains.