The Business of Bitcoin: Taxable Property

Here is a somewhat more extensive discussion of the implications of the IRS’ recent guidance on the tax treatment of bitcoin, written by BCS associate attorney David Freda.

Briskin, Cross & Sanford - Business Law Blog

As you may have now heard, on March 25, 2014, the IRS declared that, at least for now, Bitcoin will be taxed as property, rather than as a currency.  For those who view bitcoin as an investment vehicle similar to stocks, this ruling sets a clearer path with well known “rules of the game” for dealing with the tax implications of bitcoin.

But for those who are interested in bitcoin as a new currency, the path is now cluttered with administrative, legal, and financial complexities.

In order to better understand the implications of the IRS’ new stance, let’s take a quick look at the taxation of property. Generally speaking, if you purchase property and it appreciates in value, you must pay tax on the gain you realize above the original purchase price when you sell the property. This rule has traditionally applied to stocks and bonds in the same…

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IRS Issues Guidance on Taxation of Virtual Currencies

The IRS has issues a notice, Notice 2014-21, providing guidance on its position regarding how virtual currencies such as Bitcoins should be taxed. Under this new guidance notice, the IRS has taken the position that virtual currencies and crypto currencies, such as Bitcoins, are taxable as property, and transactions occurring using virtual currencies will be treated as property transactions for tax purposes.

While this Notice does not solve all of the concerns and issues inherent in the use of virtual currencies, it at least answers nagging questions regarding the U.S. federal tax treatment for the currencies and for transactions carried out using such virtual currencies.

When is software patentable? The Supreme Court is about to weigh in

The Alice Corp. case definitely represents a potential pivot point for software patents. The determination of what what is and abstract idea and what is not in the context of computer software has long been a difficult and fuzzy process. It is hoped that the U.S. Supreme Court will use its decision in the Alice Corp. case to clarify that analysis, thus providing clearer direction to software authors who are considering whether to seek patent protection for their creations.

Gigaom

Software patents have always been controversial, in large part because the dividing line between a patentable software-based invention and one that is not has never been clearly defined. But the often hazy body of law that determines software patentability could be about to change.

On March 31, the U.S. Supreme Court will hear oral arguments in Alice Corp. Pty. Ltd. v. CLS Bank Int’l., No. 13-298, a case that could have wide consequences in the tech community and beyond.  At stake is when and how a particular software-based invention—that is, an invention that incorporates the performance of a computer and software—is entitled to a patent.

At the heart of the matter is the “abstract idea.” An abstract idea on its own is not patentable, but what exactly counts as an abstract idea? The Supreme Court has never set out a specific test for what is and is not…

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