Cryptocurrencies such as Bitcoin have gained prominence since they were
first introduced in 2008. While cryptocurrencies have grown in use by consumers and business, government regulators such as the Internal Revenue Service have been slower to respond to this technological creation. It is important to understand how the IRS views cryptocurrencies, so individuals and businesses can properly report their use of cryptocurrencies in transactions. The IRS has determined that cryptocurrencies will be treated as property, with all that entails including tracking basis, determining market value of transactions, and reporting gains or losses.