IRS Says Bitcoins are Property and Not Currency

BITCOIN IS NOW A TAXABLE ASSET – IRS Says Bitcoins are Property and Not Currency
Wading into a murky tax question for the digital age, the U.S. Internal Revenue Service said on Tuesday that bitcoins and other virtual currencies are to be treated, for tax purposes, as property and not as currency.
“General tax principles that apply to property transactions apply to transactions using virtual currency,” the IRS said in a statement, meaning that bitcoins would be taxed as ordinary income or as assets subject to capital gains taxes, depending on the circumstance.
Bitcoin, the best-known virtual currency, started circulating in 2009. Its present market value is around $8 billion, with up to 80,000 transactions occurring daily, according to accounting firm PricewaterhouseCoopers LLP.
Recent incidents have brought the currency under new regulatory scrutiny, such as the failure of Mt. Gox, a Tokyo-based exchange that filed for bankruptcy after losing an estimated $650 million worth of customer bitcoins.
Unlike conventional money, bitcoin is generated by computers and is independent of control or backing by any government or central bank, which its proponents like, but which also has led to calls for more guidance on U.S. tax treatment.
The IRS supplied that in its statement, which dealt a blow to bitcoin “miners,” who unlock new bitcoins online. The IRS said miners must include the fair market value of the virtual currency as gross income on the date of receipt.
This change “is a disincentive to start looking for bitcoins,” said John Barrie, a partner with law firm Bryan Cave LLP, who advises charities that receive bitcoins as donations.
NOT LEGAL TENDER

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http://www.cryptonews.biz/irs-says-bitcoins-are-property-and-not-currency/

$1.65 Million

BTER is reporting that 50m NXT, or roughly $1.65m at press time, has been stolen from its exchange following an attack on one of its hosting servers.
A developer representing the China-based digital currency exchange platform confirmed the news on the community information website NXT Forum, suggesting that the BTER team was considering urging the NXT community to roll back the NXT block chain to recover the lost funds.
In a post to the community, developer ‘freeworm’ revealed the gravity of the situation for both the exchange and the NXT community, saying:

“It’s totally our fault and we are trying our best to cover all the loss. However, 50m nxt is huge for us, we cannot afford it at the moment.”

Freeworm continued his post by providing the address containing the stolen 51,670,000 NXT, and detailing how it would seek to enlist the help of the NXT community in its effort to recover its funds.
The BTER representative suggested that the exchange is exploring all options, including contacting the NXT development team in an effort to rollback the block chain, thereby restoring the ledger to its state before the theft occurred.
However, NXTOrganization confirmed that a signifcant majority of forgers opposed the plan when it was proposed as part of a client update. 
“Most NXT users report only seeing a few 1.2.5b nodes. This would suggest that most of the community decided to go against the roll back even under the extreme pressure of such a large theft,” a spokesperson said.

Read more at:
 http://www.coindesk.com/bter-nxt-bitcoin-exchange-hack/