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Are Bitcoin Profits Taxable?

TheMotleyFool

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Virtual currencies, such as bitcoin, are still in the relatively early stages of adoption, and many legal aspects of them aren't well understood. One big example is taxation -- that is, if you buy bitcoin or any other virtual currency and sell it for more than you paid, do you have to pay taxes on your profits?

The short answer is "yes," but how much tax you'll have to pay depends on a few factors. Here's a rundown of how the IRS classifies bitcoin and what it means for your taxes.

Image Source: Getty Images.

Source: Fool.com

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