Just in case anybody didn't know...Although I have a feeling I'm preaching to the choir here!
Each of the 23 Federal Reserve Banks is organised into a corporation whose shares are sold to the commercial banks and thrifts operating within the Bank's district. Shareholders elect six of the nine the board of directors for their regional Federal Reserve Bank as well as its president. Mullins reported that the top eight stockholders of the New York Fed were, in order from largest to smallest as of 1983, Citibank, Chase Manhatten, Morgan Guaranty Trust, Chemical Bank, Manufacturers Hanover Trust, Bankers Trust Company, National Bank of North America, and the Bank of New York (Mullins, p. 179). Together, these banks owned about 63 percent of the New York Fed's outstanding stock. Mullins then showed that many of these banks are owned by about a dozen European banking organisations, mostly British, and most notably the Rothschild banking dynasty. Through their American agents they are able to select the board of directors for the New York Fed and to direct U.S. monetary policy. Mullins explained...
The Chauvinist: I wonder what this means. Will some UN agency eventually take control over the net? This is why I'm glad we're now seeing innovations like Namecoin. It's not enough, but a start.
U.S. officials announced plans Friday to relinquish federal government control over the administration of the Internet, a move that pleased international critics but alarmed some business leaders and others who rely on the smooth functioning of the Web. Pressure to let go of the final vestiges of U.S. authority over the system of Web addresses and domain names that organize the Internet has been building for more than a decade and was supercharged by the backlash last year to revelations about National Security Agency surveillance.
The change would end the long-running contract between the Commerce Department and the Internet Corporation for Assigned Names and Numbers (ICANN), a California-based nonprofit group. That contract is set to expire next year but could be extended if the transition plan is not complete. We look forward to ICANN convening stakeholders across the global Internet community to craft an appropriate transition plan,” Lawrence E. Strickling, assistant secretary of commerce for communications and information, said in a statement.
The announcement received a passionate response, with some groups quickly embracing the change and others blasting it. In a statement, Senate Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.) called the move “consistent with other efforts the U.S. and our allies are making to promote a free and open Internet, and to preserve and advance the current multi-stakeholder model of global Internet governance.”
WASHINGTON — The Internal Revenue Service today issued a notice providing answers to frequently asked questions (FAQs) on virtual currency, such as bitcoin. These FAQs provide basic information on the U.S. federal tax implications of transactions in, or transactions that use, virtual currency.
In some environments, virtual currency operates like “real” currency -- i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance -- but it does not have legal tender status in any jurisdiction.
The notice provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that:
Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.
The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
Further details, including a set of 16 questions and answers, are in Notice 2014-21, posted today on IRS.gov.
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Summary
Contributing author Bryan Clontz explores the implications of gifts of Bitcoin and other virtual currencies.
By: Bryan Clontz, CFP®, CAP®
Introduction
The popular virtual currency, Bitcoin, has been a news fixture since its introduction in 2009.[1] Bitcoin is the world’s leading virtual currency, with a market capitalization currently approaching $5 billion.[2] Donors and their advisors are now exploring various charitable giving opportunities using virtual currencies. The Internal Revenue Service (“IRS”) describes virtual currency as “a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value.”[3] It is designed to operate like legal tender, and serve as a medium of exchange, although it is not currently recognized as legal tender anywhere in the world.[4]
Currently, Bitcoin and other virtual currencies, such as Ripple and Litecoin, represent a total market capitalization of nearly $6 billion.[5] Many large charities are eager to tap into this market or have already received virtual donations, such as United Way Worldwide, which recently began accepting donations of Bitcoins.[6] Smaller nonprofits have begun accepting the currency as well.[7] This article discusses charitable donations of virtual currencies, including tax, appraisal, legal, and processing considerations.
Tax Considerations
In March 2014, the IRS issued a Notice on the tax treatment of transactions involving virtual currency.[8] Most importantly, the IRS stated that, for tax purposes, virtual currencies are property and not currency.[9] This means that traditional gain and loss principles will apply; the IRS treats these assets as securities or business property. A party selling, spending, or otherwise disposing of virtual currency may be subject to capital gains or ordinary income tax. Since the charity will be selling the currency, exempt organizations are not generally taxed on income, even from the sale of appreciated property.[10]
The major tax implications for donations of virtual currency, therefore, involve the donor. The main consideration for donors is the charitable income tax deduction received. The gain can be ordinary or capital, depending on the source of the virtual currency to the donor. The determination on the type of gain or loss recognized depends on whether the donated virtual currency was held as a capital asset for investment purposes.[11] If the property was not held as an investment, it would be subject to ordinary gain or loss treatment – this is more likely to be the case if the donor is a so-called “miner” or where the virtual currency is otherwise income.[12]
These possibilities lead to three potential tax results for donors of virtual currency. First, a donor giving virtual currency held short term (ie: less than one year) as a capital asset will be able to deduct the lesser of cost basis or fair market value up to 50% of adjusted gross income.[13] However, if the donor held the Bitcoin or other currency for more than a year as a capital asset, the deduction would be the fair market value of the gift up to 30% of adjusted gross income.[14] Finally, if the currency is subject to ordinary gain or loss treatment in the hands of the donor, the donor may deduct the cost basis of the gift up to 50% of her adjusted gross income.[15] If Bitcoin was received as ordinary income as payment for services rendered or property sold, the donor may only deduct the cost basis. The IRS defines the cost basis of the virtual currency as its fair market value when it was received.[16] So if the donor was paid Bitcoin worth $500 for professional services, and that Bitcoin later appreciated to $1,000 USD, the donor’s charitable income tax deduction would be limited to $500, or cost basis.
These rules are very favorable to donors holding appreciated virtual currency as capital assets, allowing them to avoid incurring a tax for capital gains on the Bitcoins or other currency.[17] Note that this donation would also allow the donor to avoid the 3.8% Medicare surcharge on investment income.
Appraisal Considerations
A major concern for potential donors of virtual currencies will be complying with IRS appraisal requirements. The Service requires that donors claiming total deductions of over $500 on noncash donations file Form 8283.[18] Due to the IRS ruling that virtual currency is property, donors of such currencies must therefore file Form 8283 if their deductions exceed the statutory threshold.
More importantly, however, is that the IRS requires a qualified appraisal for donated property over $5,000 in value.[19] Although there is an exception for publicly traded securities, it seems improbable that virtual currency would be deemed qualified appreciated stock. This is because the IRS defines a “publicly traded security” as one that is “[l]isted on a stock exchange in which quotations are published on a daily basis,” or “regularly traded in a national or regional over-the-counter market for which published quotations are available.”[20]Although there are online virtual currency exchanges, these are not stock exchanges, and hence do not qualify under the first category. The second category is a closer case, because although price information about virtual currencies is easily located online, it is difficult to say that virtual currencies fit within the sort of market described. Hence, virtual currencies probably do not fall within the IRS definition of “publicly traded security” for noncash donation purposes.
This means that anyone planning to donate more than $5,000 worth of virtual currencies should arrange for an appraisal of the currency’s value from a qualified appraiser. [Disclaimer: The author’s firm, Charitable Solutions, LLC, offers appraisal services.] This may prove difficult, given the IRS requirements that the appraiser be “qualified” – that is, possessing “verifiable education and experience in valuing the type of property being appraised.”[21]This requirement poses a difficulty to donors considering large gifts of virtual currency, because virtual currencies were only recently introduced. As a result, “it may be difficult to find a qualified appraiser” with the requisite education and experience.[22] For this reason, it may be wise for potential donors to limit their total contributions to all charities in virtual currency form to less than $5,000.[23]
I am a tax attorney, here are my answers to the most common questions about the taxation of bitcoins(self.Bitcoin)
submitted1 year ago*bydblcross121
Edit: On March 25, 2014 the IRS released Notice 2014-21 addressing the taxation of bitcoins. This post was updated on March 26, 2014 to reflect the IRS's positions contained in the Notice.
Introduction
I've noticed a significant amount of uncertainty around here about the taxation of bitcoins. In effort to provide some guidance , I've compiled some of the most common questions I've seen and tried to provide straight-forward, easy to understand answers. I am a tax attorney, but there is so much uncertainty surrounding bitcoins that I expect some people to disagree with one or more of my conclusions. If you have a contradictory opinion, please share it. We would all benefit from an educated discussion of this issue.
Keep in mind this post is intended for a layman audience. If you are a tax professional or want a detailed examination of this topic, you find this post lacking. Please don't nit pick this post with technicalities or narrow exceptions, I purposely excluded such nuances for the sake of readability.
I should note that this post does not address aggressive tax planning strategies. Such strategies are a lot of fun to discuss, but they do not belong in this type of post. If you are interested in such strategies, perhaps we can make a follow-up post on another day.
Legal Disclaimer
This post was created for general guidance on matters of interest only, and does not constitute legal advice. You should not act upon the information contained in this publication without obtaining specific advice from a tax professional. No representation or warranty (expressed or implied) is given as to the accuracy or completeness of the information contained in this post, and I do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this post or for any decision based on it.
CIRCULAR 230 DISCLOSURE To ensure compliance with requirements imposed by the IRS, I inform you that any U.S. federal tax advice in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
THE AUTHOR Tyson P. Cross is a tax attorney in San Diego, California representing individuals and businesses with tax issues related to Bitcoin and other cryptocurrencies , including tax return preparation, tax planning, and FinCEN compliance. He can be reached at Tel: +1 619-786-0641 or Email: [email protected]. (this information is to ensure I am compliant with attorney advertising rules).
Topic 1: Realization
#1: Are gains on Bitcoins taxable?
Yes. This is one of the only unequivocal answers you'll find in this post. All income is taxable, regardless of source or form, unless the Internal Revenue Code specifically states otherwise. Bitcoins present a lot of interesting tax questions, but whether gains are taxable is not one of them.
#2: When do my gains become taxable?*
Gains are taxable in the year they are realized. Realization occurs when you exchange bitcoins for any type of other property; such as cash, merchandise, or services. This includes everything from haircuts to yachts. Essentially, any transaction involving Bitcoin is a realization event and triggers taxable gain. Note: IRS Notice 2014-21 expressly confirms this treatment.
Because I've seen a lot of misinformation on this point, I want to make myself perfectly clear. If you own bitcoins that have appreciated in value, you cannot use them to purchase goods or services without realizing gain. Such a purchase is an accession to wealth. It puts you in the same position as if you had first sold the bitcoins for cash and then used the proceeds to purchase the goods or services directly. Yet, one would be a taxable transaction while the other would not? The IRS would never tolerate such a blatant loophole, and neither would the courts. In fact, this exact argument has already been rejected for other types of assets. The outcome for bitcoins will be the same.
Unfortunately, this has some serious implications for the future of bitcoin. I have to question the effectiveness of bitcoin as a medium of exchange when the user has to calculate his or her tax liability on every single transaction. As the saying goes, the power to tax is the power to destroy, and this is no exception.
Note: There is a code section that might provide some relief here, but only if bitcoins are categorized as a foreign currency. Under this code section, the use of bitcoin to buy goods and services would be tax free as long as the transaction was personal (i.e. not for business or investment) and did not generate more than $200 of gain. Unfortunately, the IRS ruled in Notice 2014-21 that bitcoin is not a currency for tax purposes. So, this code section is inapplicable unless the IRS changes its position sometime in the future.
#3: What if I sell my bitcoins but do not withdraw the proceeds from the exchange?
It doesn't matter, your gains were realized the moment you sold them. It is irrelevant whether the proceeds from the sale are kept in your bank account or your exchange account, you still have a realized gain for tax purposes.
#4: What if I exchange my bitcoins for altcoins?
This is a fair question and implicates what is known as a "like kind exchange." Like kind exchanges do not trigger realization, and therefore are tax-free. Although it's technically possible for bitcoins and altcoins to qualify for-like kind treatment, I think it's exceedingly unlikely. The regulations for like kind exchanges require the two property types to have the same rights, characteristics, and obligations. Whether altcoins and bitcoins meet this test is uncertain, but I would tend to think not.
Although nothing is for certain when it comes to bitcoins, I'm fairly confident that like-kind treatment will fail at one or both of these hurdles. Thus, I would not suggest that you try to qualify such a transaction as a like kind exchange until further guidance on this issue is given by the IRS.
edit: IRS Notice 2014-21 concluded that bitcoins are not a foreign currency, therefore it is possible that bitcoin can qualify for like-kind treatment if the "rights and characteristics" test is met.
#5: So how can I avoid realizing gains on my bitcoins?
The only way to avoid realization is to hold your bitcoins without selling or exchanging them. If you were hoping for a different answer, I'm sorry. Whether you decide to actually report you realized gains is of course a different matter, but as far as the law is concerned, you have realized gains upon any sale or exchange of your bitcoins.
"Published in July 2015 and available now, The Law of Bitcoin is a response to the great interest and need for a text focused on the law of cryptocurrencies, especially Bitcoin. This book is the first of its kind delving into cryptocurrency law in four jurisdictions: the United States, the United Kingdom, Canada and Germany. Written by knowledge leaders in the fields of law and cryptocurrency,The Law of Bitcoin addresses such topics as the intersection of cryptocurrencies and criminal law, taxation, anti-money laundering and counter-terrorist financing regulations, securities law, consumer protection, negotiable instruments, currency law and financial regulation. The Law of Bitcoin is a leading resource and go-to text both for those wishing to understand the basics of how the law affects cryptocurrency and Bitcoin businesses, and also for those in the legal community searching for sophisticated answers to more advanced questions."
On April 12, 2025, Hellar experienced a major disruption in its server infrastructure that resulted in the unexpected and complete shutdown of several key community communication platforms, including our official Discord server and Twitter presence. This incident was caused by a global-level failure within our third-party infrastructure provider, impacting critical backend systems responsible for real-time communication and social integrations.
As a result of this event, and after thorough internal assessment, the Hellar team has made the decision not to restore the Discord server. While this platform has served as a valuable space for user support, developer discussions, and community engagement, we are now focusing on creating a more stable, self-hosted environment to ensure greater resilience and independence moving forward.
We want to reassure the community that all core Hellar systems remain fully operational:
The blockchain continues to function smoothly, with no interruptions to transaction processing or block generation.
The block explorer is live and fully operational, providing transparent and real-time visibility into network activity.
All wallet services and core protocols are unaffected, with Hellar Core currently running on version 3.0.1.
Most importantly, the Hellar community forum has been fully migrated to this platform. This new forum will serve as the primary and official hub for all project discussions, updates, support, and developer coordination. We encourage all community members, contributors, and newcomers to join us here and help shape the future of Hellar in a more secure and controlled digital space.
We thank you for your understanding, continued support, and commitment to decentralized innovation. Hellar’s mission remains unchanged — building an open, anonymous, peer-to-peer digital currency for a borderless world.
