NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its
articles, interactive tools and other content are provided to you for free, as self-help tools and for
informational purposes only.

They are not intended to provide investment advice. NerdWallet does not and
cannot guarantee the accuracy or applicability of any information in regard to your individual

Examples are hypothetical, and we encourage you to seek personalized advice from
qualified professionals regarding specific investment issues. Our estimates are based on past market
performance, and past performance is not a guarantee of future performance. You can run afoul of IRS rules on bitcoin in a few surprising ways.

Here’s how using bitcoin can affect your tax situation. In 2014, the IRS issued a notice declaring that cryptocurrency is treated like property, not a currency.

That may sound like a trivial distinction, but it’s the basis for when the IRS decides whether individuals owe taxes. And these tax consequences revolve around what the government agency calls a “realization event.” A realization event, as it relates to bitcoin, involves three actions: In each case the bitcoin owner may have created a tax liability. Read more from…

thumbnail courtesy of