--- title: IRS: Bitcoin is a Property, Not a Currency description: Transactions made with Bitcoin are now subject to taxes though investors could benefit from the announcement canonical: https://time.com/37428/bitcoin-irs-property-virtual-currency/ author: Sam Frizell article:opinion: false article:content_tier: free article:published_time: 2014-03-25T19:09:09.000Z article:modified_time: 2026-02-21T06:57:26.506Z article:section: World og:title: IRS: Bitcoin is a Property, Not a Currency og:description: Transactions made with Bitcoin are now subject to taxes though investors could benefit from the announcement og:url: https://time.com/37428/bitcoin-irs-property-virtual-currency/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltde093bcdab65f2d0/6988d9b9bc6cfc69913e2a3c/time-logo.jpg?branch=production og:image:width: 1200 og:image:height: 675 og:image:alt: TIME og:type: article twitter:card: summary_large_image twitter:title: IRS: Bitcoin is a Property, Not a Currency twitter:description: Transactions made with Bitcoin are now subject to taxes though investors could benefit from the announcement twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltde093bcdab65f2d0/6988d9b9bc6cfc69913e2a3c/time-logo.jpg?branch=production --- # The IRS Will Tax Bitcoin As a Property by [Sam Frizell](/author/sam-frizell/) ## Sam Frizell Mar 25, 2014 7:09 PM CUT by [Sam Frizell](/author/sam-frizell/) ## Sam Frizell Mar 25, 2014 7:09 PM CUT The Internal Revenue Service announced on Tuesday that it will [categorize](http://www.businessinsider.com/irs-bitcoin-is-property-not-currency-full-release-2014-3 "undefined") virtual currencies like Bitcoin as property, and not as a currency, a move that will impose significant taxes and regulations on the fledging market, but will likely be a boon for investors. Payments made to employees and workers with virtual currency will be subject to federal income tax, and any payment made using virtual currency will now have to be reported in the same way as other payments made in property. But any gains investors make from Bitcoin will be treated as capital gains, meaning they could be subject to lower tax rates. Bitcoin ‘miners’, who verify transactions made with the virtual currency and generate new currency using complex algorithms, will now be forced to pay income taxes on their earnings, as well as payroll taxes to any employees. Governments are beginning to step up their regulation of Bitcoin as the virtual currency struggles to achieve legitimacy. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/37428/bitcoin-irs-property-virtual-currency/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/37428/bitcoin-irs-property-virtual-currency/"},"headline":"The IRS Will Tax Bitcoin As a Property","datePublished":"2014-03-25T19:09:09.000Z","dateModified":"2026-02-21T06:57:26.506Z","description":"The IRS has announced it will categorize virtual money as property, not as currency. The move will impose significant taxes and regulations on the fledging Bitcoin market, but will likely be a boon for investors, since trading profits will be treated as capital gains","url":"https://time.com/37428/bitcoin-irs-property-virtual-currency/","keywords":["Bitcoin","IRS"],"thumbnailUrl":"","author":[{"@type":"Person","name":"Sam Frizell","jobTitle":null,"url":"https://time.com/author/sam-frizell/"}],"articleSection":"World","image":[],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/world/","name":"World"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/bitcoin/","name":"Bitcoin"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/37428/bitcoin-irs-property-virtual-currency/","name":"The IRS Will Tax Bitcoin As a Property"}}]}] ```