In this Dec. 8, 2017, file photo, coins are displayed next to a Bitcoin ATM in Hong Kong. The IRS says that cryptocurrency transactions are taxable by law. (AP Photo/Kin Cheung, File)
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The IRS says that cryptocurrency transactions are taxable by law. That means people who made money (or lost it) on bitcoin trades, "mined" ethereum or even bought a cup of coffee with digital currency face potential tax implications. All digital currency transactions are taxable events, according to the IRS.Another key thing to remember is that these digital currencies are taxed as property, instead of currency, for tax reasons.While the IRS only knows what you tell them, to a degree, if they find out that you were not properly reporting the income from virtual currency transactions, you could be held liable. Omri Marian, a law professor at University of California, Irvine, called cryptocurrencies potential "super tax havens" back in 2013 . He says people may still be using them to evade taxes but he is more optimistic these days, in part, because the IRS is going after this matter.
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