US taxpayers should be mindful of certain tax provisions that may need to be considered with respect to bitcoin following approval of recent legislation in El Salvador

With the legislative approval of bitcoin as legal tender in El Salvador, United States (US) taxpayers should be mindful of certain Internal Revenue Code¹ (IRC) provisions that could be triggered if more countries decide to adopt bitcoin as legal tender.

Background

On 8 June 2021, El Salvador’s Legislative Assembly approved legislation to adopt bitcoin as legal tender in the country. Under the key provisions of the approved bill, businesses and lenders would be required to accept bitcoin as p…