IRS: Cryptocurrency Isn't Currency; It's Property

WASHINGTON — The U.S. Internal Revenue Service said on Tuesday that cryptocurrencies are to be treated, for tax purposes, as property and not as traditional currency.

The IRS said that cryptocurrencies — like bitcoin, litecoin and scores of others — should be considered like stocks and bonds and that "general tax principles that apply to property transactions apply to transactions using virtual currency."

The IRS also said that payments made using virtual currency to service providers or independent contractors are taxable.

It further said cryptocurrencies are not to be treated as legal-tender currency to determine if a transaction causes a foreign currency gain or loss under U.S. tax law and that wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.

In addition, the IRS  said that the character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer and that a payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.

For "miners," like bitcoin miners, those who use computers to validate bitcoin transactions must include the fair market value of the virtual currency as gross income on the date of receipt, the IRS said.

Online adult companies have come to embrace cryptocurrencies as a substitute for traditional methods of processing transactions. MindGeek, SCORE Group, Naughty America, Wicked Pictures, Porn.com, Grooby.com, DominicFord.com, ClassyCams.com and MetArt.com, among other adulte brands, take bitcoin. Internet payment service provider Verotel also accepts bitcoin for transactions.

View IRS FAQ on cryptocurrencies

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

UPDATED: Supreme Court Rules Against Adult Industry in Pivotal Texas AV Case

The U.S. Supreme Court on Friday issued its decision in Free Speech Coalition v. Paxton, striking a blow against the online adult industry by ruling in support of Texas’ controversial age verification law, HB 1181.

North Carolina Passes Extreme Bill Targeting Adult Sites

The North Carolina state legislature this week ratified a bill that would impose new regulations that industry observers have warned could push adult websites and platforms to ban most adult creators and content.

Supreme Court Ruling Due Friday in FSC v. Paxton AV Case

The U.S. Supreme Court will rule on Friday in Free Speech Coalition v. Paxton, the adult industry trade association's challenge to Texas’ controversial age verification law, HB 1181.

Ofcom: More Porn Providers Commit to Age Assurance Measures

A number of adult content providers operating in the U.K. have confirmed that they plan to introduce age checks in compliance with the Online Safety Act by the July 25 deadline, according to U.K. media regulator Ofcom.

Aylo Says It Will Comply With UK Age Assurance Requirements

Tech and media company Aylo, which owns various adult properties including Pornhub, YouPorn and Redtube, plans to introduce age assurance methods in the United Kingdom that satisfy government rules under the Online Safety Act, the company has announced.

Kyrgyzstan Parliament Approves Measure Outlawing Internet Porn

The Supreme Council of Kyrgyzstan on Wednesday passed legislation outlawing online adult content in the country.

Trial Set for Lawsuit by U Wisconsin Professor Fired Over Adult Content

A trial date of June 22, 2026, has been set for the civil lawsuit filed by veteran communications professor Joe Gow against the University of Wisconsin board of regents, which fired him for creating and appearing in adult content.

New UK Task Force Meets to Target Adult Content

The architect of an influential report that recommended banning adult content deemed “degrading, violent and misogynistic” has convened an “Independent Pornography Review task force” aimed at translating that report’s findings into action in the U.K.

11:11 Creations Launches Affiliate Program

11:11 Creations principal Alicia Silver has launched 11:11 Cash for creators and affiliates.

Pineapple Support, Pornhub to Host 'Self Love' Support Group

Pineapple Support and Pornhub are hosting a free online support group for performers to develop self-love.

Show More