Taxation on Virtual Currency

The IRS had already confirmed that virtual currency is to be treated as a capital asset if it can be converted to cash. This means that capital gains rules apply to any gains or losses on the sale or transfer of virtual currency and will be reported on a Schedule D. Transactions involving a digital asset are generally required to be reported on a tax return. Taxable gain or loss may result from transactions including but not limited to 1. Sale of a digital asset for fiat 2. Exchange of a digital asset for property, goods, or services 3. Exchange or trade of one digital asset for another digital asset.