By: Nathan Hartman

Some companies are using them as methods of payment; others are holding them for speculative investment.  The spread of ownership has led many to wonder how to account for them, both from bookkeeping and tax perspectives.  For book purposes, cryptocurrencies should be accounted for as intangible assets.  One might wonder why they aren’t cash, like foreign currencies.  The reason is that they are not issued or backed by any government or state.  For tax purposes, the IRS considers cryptocurrency to be property, similar to owning a share of stock trading on a stock market.  Thus buying and selling cryptocurrency (or even buying cryptocurrency and later using it to pay for goods or services) creates capital gains and losses.  There is no doubt the accounting standard setters and the IRS will continue to put guidance out for unique circumstances so stay tuned for new developments.

Our Firm
Peterson Sullivan is a Seattle-based CPA and advisory firm known for the expertise we bring to publicly traded and closely held middle-market companies, nonprofit organizations, and high-net-worth individuals throughout the Pacific Northwest and around the world.
PS Wealth Advisors, LLC is a registered investment adviser in the state of Washington. The adviser may not transact business in states where it is not appropriately registered or exempt from registration. Individualized responses to persons that involve either the effecting of transactions in securities or the rendering of personalized investment advice for compensation will not be made without registration or exemption.