Bitcoin Tax Consequences Nevada Companies

Posted by on Feb 12, 2014 in Blog | 9 Comments

How does a company report Bitcoin revenue received?

Bitcoin is recorded as a revenue when you receive the online currency for products or services.  You should record the value of the revenue the same as receiving cash or credit.  Yes, you are required to report the income on your business tax return.  The company will have to report the value of the service or product as revenue even if the bitcoin stays in the account.

How does a company report Bitcoin purchased and sold?

If your company is maintaining a bitcoin account the difference between purchase price and sale price is treated as investment income or loss.  Similar to stock trades if there is a gain it will be treated as a short term capital gain unless you hold the bitcoin for more than a year in the account before exchanging it for real currency.  There is no tax due on the fluctuation of your account balance you won’t have to recognize a gain or loss until you exchange the bitcoin for currency.  The gain or loss should be reported on your capital gain/loss summary for your business tax return.

Mr. Arlint is a tax attorney, certified public accountant and accounting professor in Las Vegas Nevada. He owns and manages both a CPA firm and a law firm. Mr. Arlint practices in tax law, estate planning and asset protection.

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