- In 2010, 1,000 bitcoins could only buy you a single pizza. That’s how low the currency’s value was at that time.
- In 2009, Norwegian graduate student Kristoffer Koch bought 5,000 bitcoins for approximately $27 US dollars. By 2013, that initial $27 investment had grown in value to approximately $886,000. That’s a return of 3,281,500% in only four years.
- If you bought $1,000 worth of Bitcoin in 2010, they would be worth approximately $35 million dollars today.
- As of August 2017, Bitcoin’s value moved past $4000 US dollars for the first time. That’s based on the promise of even faster transaction times than before.
As you can see, Bitcoin’s value is accelerating at a tremendous pace and shows no major signs of stopping. The growth potential is enormous! If you are thinking about getting into this market yourself by accepting bitcoin payments for your goods or services, Anderson partner and noted tax attorney Toby Mathis breaks down the tax implications of using Bitcoin for transactions you conduct in the video below.
Most importantly, he discusses why you need to think about Bitcoin as property, not currency. This is understanding how to account for transactions with it and making sure you handle them correctly with regards to tax filings. Long-term capital gains, short-term capital gains, and basis are all factors that you’ll have to deal with just. Any mistakes could lead to an IRS audit, which no one wants to deal with ever.
Watch the video to learn more.
If you have any further questions about how to handle Bitcoin transactions for your business or questions related to your business’ tax, bookkeeping, or asset protection needs, schedule a FREE Strategy Session with one of our expert Advisors. Click here to schedule your session today.
Toby Mathis, is a founding partner of Anderson Law Group and current manager of Anderson’s Las Vegas office. He has helped Anderson grow its practice from one of business and estate planning to a thriving tax practice and national registered agent service with more than 18,000 clients. In his work as an attorney, he has focused exclusively in areas of small business, taxation, and trusts. In addition, Toby was the past director and host of the longest-running local business radio program on KNUU in Las Vegas “The BOSS Business Brief”. He sits on the board of directors for several companies and was recently appointed to the local board of Entrepreneurs’ Organization, a worldwide association of owners of successful businesses. He has authored more than 100 articles on small business topics and has written several books on good business practices, including first and second editions of Tax-Wise Business Ownership and 12 Steps to Running a Successful Business.