Bitcoin: IRS says, “It’s property, and it’s taxable!”

A lot of people are still trying to figure out just what Bitcoin is, but the IRS has seen enough to decide: It’s a type of property and not a form of currency.

So what, you say? Here’s what: Because, as The New York Times has reported, the IRS is going to treat Bitcoin as property, people who buy and sell it are going to have to calculate the change in value from when they acquired it, and pay tax (or claim losses) on the difference.

That means you could buy Bitcoin, use it to purchase something, and then have to report a “trade” on the change in Bitcoin value between when you bought it and when you used it.

Oh, and if you’re one of those smart guys or gals who can actually electronically “mine” a Bitcoin, you are going to have to report the market value of the Bitcoin as income.

For Michael Jackson estate, $1B disagreement with IRS is no thriller

There’s the average person’s disagreement with the IRS over a tax bill. And then there’s the estate of Michael Jackson.

The executors of Jackson’s estate pegged his net worth at $7 million. But papers filed with the U.S. Tax Court in Washington, DC, show that the IRS believes his estate is worth $1.125 billion, which is, as The Los Angeles Times so nicely put it, “a difference so vast it looks like a typo.” (10 free articles and then a paywall.)

At that level, the estate would owe more than $500 million in taxes, plus another $200 million in interest and penalties. Among the areas of dispute: The IRS says Jackson’s image & likeness are worth about $434 million; the estate filing put the value at…$2,105.

Inheritance tax disputes are often settled before trial, but I’d like to see this case go to court, if for no other reason than that the testimony, and eventual ruling, is bound to be fascinating.

Washington Post’s maps paint a fascinating – and unexpected – picture of the USA

The Washington Post’s “GovBeat” feature is doing some great work, including this story and link to 25 maps and charts of the United States (your first 10 stories a month at Washingtonpost.com are free; then the paywall rises up.)

One, “Finding America’s Uninsured,” (#23) shows that the national problem of people not having health insurance may be strangely localized, with 116 counties (out of more than 3,000 total) accounting for more than half of all the uninsured in the U.S. Another, “Cartogram of Total Disenfranchisement rates by State,” (#16) features a stunningly distended Florida, where more than one out of every five black adults are not allowed to vote because they were at some point convicted of a felony.

On the other hand, it’s worth giving your brain a bit of a break and focusing on the maps of “Where The Breweries Are,”(#5) and “Where the Closest Pizza Joints Are” (#25).

Delta Airlines pays zero tax on $2.7 billion in earnings in 2013

When people have a bad financial year, they generally don’t get any tax benefit. But when corporations lose money, the losses don’t disappear. For tax purposes, they are carried forward to future years, and can result in companies making billions but still owing nothing.

Case in point: Delta Airlines, which, as Bloomberg Business Week explains, won’t owe anything on its $2.7 billion in earnings last year.

Delta isn’t doing anything special here–the ability to carry forward corporate losses is an ordinary and well-established feature of the tax code. And indeed, in some cases an individual taxpayer could have such a bad year that he would have a loss that could carry forward to another year.

Mitt Romney famously said on the campaign trail that corporations are people. What he didn’t explain is that they’re people who sometimes have better tax benefits than actual people.