Tax experts remind consumers of tax risks associated with Bitcoin payments

According to Decrypt, the American restaurant chain Steak'n Shake has recently started accepting Bitcoin as a payment method, but tax experts remind consumers to be aware of the associated tax risks. According to the Internal Revenue Service (IRS), cryptocurrencies are considered property rather than currency, and any use of Bitcoin to purchase goods is regarded as a taxable transaction.

Lawrence Zlatkin, Vice President of Tax at a certain CEX, explained that when consumers use Bitcoin to purchase goods, they need to calculate the difference between the purchase price of Bitcoin and its market value at the time of use as a capital gain or loss and pay the corresponding taxes to the IRS. Experts recommend that consumers keep all transaction records and choose a consistent calculation method for tax reporting.

Although the IRS typically does not audit taxpayers for small transaction omissions, the risk still exists as centralized exchanges report more user transaction data to the IRS. Using stablecoins pegged 1:1 to the US dollar to purchase goods does not pose a tax risk.