TechFlow news, May 24 — According to Decrypt, U.S. restaurant chain Steak'n Shake has recently begun accepting Bitcoin as payment, but tax experts warn consumers about potential tax implications. Under guidelines from the Internal Revenue Service (IRS), cryptocurrencies are treated as property rather than currency, meaning any purchase made with Bitcoin is considered a taxable event.
Lawrence Zlatkin, Vice President of Tax at Coinbase, explained that when consumers use Bitcoin to buy goods, they must calculate the difference between the original purchase price of the Bitcoin and its market value at the time of use, reporting this amount as capital gain or loss and paying corresponding taxes to the IRS. Experts recommend keeping detailed records of all transactions and consistently applying a specific accounting method for tax reporting.
While the IRS typically does not audit taxpayers over small missed transactions, risks remain as centralized exchanges report increasing amounts of user transaction data to the agency. Using stablecoins pegged 1:1 to the U.S. dollar to purchase goods does not create tax liabilities.
