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- Title
VIRTUAL CURRENCY--PROPERTY OR FOREIGN CURRENCY? AN EXPLORATION OF THE TAX AND ETHICAL IMPLICATIONS.
- Authors
Lopez, Katherine J.
- Abstract
This paper explores the definition of virtual currency (also referred to as digital currency) and the implications, financial and ethical, of its treatment by the Internal Revenue Service (IRS) as property versus foreign currency on taxable income for nonbusiness users (individuals), business users (corporations), and gamers. The paper concludes that to change the treatment of virtual currency from its current IRS treatment as property to foreign currency would be more beneficial for business users and nonbusiness users spending virtual currencies for day-to-day activities, but less beneficial to nonbusiness users holding virtual currencies for investment purposes. Both methods of treatment for virtual currencies were determined to have potential problems when applied to gamers exchanging goods in virtual worlds. At this time, treating virtual currencies as foreign currency for tax purposes was determined to be the most suitable accounting treatment.
- Publication
Southern Journal of Business & Ethics, 2015, Vol 7, p119
- ISSN
1944-5474
- Publication type
Academic Journal