Hidden Bitcoins Subject To IRS Reporting - Essay Example

It is hard to resist a mystery man handing out no-strings Hidden Cash.

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It now appears that the benefactor is Jason Buzi, whole role as Mr. Hidden Cash was revealed by Inside Edition. Tweets from handle @HiddenCash give clues. The feel-good story started in San Francisco.

And whether it is the same benefactor branching out to other locales or copycats, it is a nice trend. He has spawned emulators in the US and the UK. Yes, @HiddenCash_UK has left envelopes filled with ?50 or more in London, Sheffield, Manchester and other cities.

The money-driven scavenger hunts should make everyone happy, especially if you dig up some green.

But it’s worth considering whether you should post that photo or tell your friends all about your big find. After all, the IRS may be watching. These aren’t charitable contributions, not in the traditional sense. They are a kind of grassroots giveback but probably aren’t gifts either.

After a small start, Hidden Cash, sparked a multi-city frenzy. The cash man has attracted more than 717,000 followers on his Twitter accountwhere he gives clues to the location of the hidden money.

What if plain old cash isn’t hip enough for you? Then you can check out @SFHiddenBitcoin. The idea is similar, though it’s so far appropriately only in San Francisco, where Bitcoin might aspire to be a kind of local currency. And just like the Hidden Cash, the mystery Bitcoins are, well, mystery.

Clues at @SFHiddenBitcoin provide tips where to find Bitcoin wallets looking like small sheets of aluminum. There’s a QR code, a Bitcoin address and the @SFHiddenBitcoin Twitter handle. If you figure out the clues, you might find a wallet containing 0.0333 bitcoin, about $20.

California Gov. Jerry Brown signed legislation legalizing Bitcoin, although Bitcoin probably didn’t lead California’s official stamp of approval. The IRS, on the other hand, isn’t so sure. In fact, in March of 2014, the IRS issued Notice 2014-21 ruling that Bitcoin is property (not currency) for tax purposes. That means:

Bitcoin payments to independent contractors are taxable and payers must issue Form 1099.
Gain or loss from the sale or exchange of Bitcoin depends on whether it is a capital asset in your hands.
Bitcoin payments are subject to Form 1099 reporting just like any other payment made in property.