Did the IRS Just Kill Bitcoin?

New IRS regulations could make life a lot harder for Bitcoin users. Find out the details.

Mar 30, 2014 at 10:07AM

Bitcoin has been hugely controversial, with the recent bankruptcy of Bitcoin exchange Mt. Gox raising concerns about the cyber-currency. But guidance earlier this week from the IRS could have an even bigger effect by imposing obligations on Bitcoin users that could be extremely onerous.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through the IRS Bitcoin regulations, noting that the basic idea is that the IRS will treat Bitcoin as property rather than currency. Dan runs through the implications, noting that technically, any transaction involving Bitcoin will create capital gains or losses, and those who mine Bitcoin will have self-employment income on which they'll have to pay payroll taxes like Social Security and Medicare taxes. Moreover, Dan notes that various reporting and withholding obligations will also apply, ranging from payroll-tax withholding for wages to backup withholding and information reporting for other transactions. Dan concludes that with so many people using Bitcoin to avoid exactly this type of bureaucracy, it'll be interesting to see how well the IRS plans to enforce these rules.

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Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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