Tax attorney will accept Bitcoin payments, but won't take digital currency on retainer
A Michigan business and tax lawyer has announced that he will take Bitcoin payments from clients, but will not accept the digital currency on retainer.
The reason for the distinction is that Bitcoin is more like property than money, Donald Katz explains to MLive.com. He operates his own law firm in the Detroit metropolitan area.
“It’s like they pay you in property, not currency,” he said, explaining that the Bitcoin payment is valued, for tax purposes, at its fair-market value on the day it was received. Then, when the Bitcoin payment is spent, “it’s either a capital gain or a capital loss,” depending on the market value at that point.
Since the trading price of bitcoins can fluctuate considerably, Katz said he will not hold the digital currency as a retainer payment.
A single bitcoin has traded for between $300 and $1,000 in recent years. As of Wednesday, it’s market price was about $375, the article notes.
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