Buy a Burger With Bitcoin? Beware the Tax Risks, Experts Warn
Steak ‘n Shake now accepts Bitcoin for purchases, including food items. However, these transactions are considered taxable events by the IRS, similar to stocks and bonds. Customers must track their Bitcoin purchases for tax reporting, as any gain or loss from the transaction must be calculated. The IRS prefers the "first in, first out" method for tax calculations. Taxpayers should consistently use one method throughout the year. While small discrepancies may not trigger audits, centralized exchanges will report user transactions to the IRS starting next year. A proposed de minimis exemption for small transactions is under discussion but not yet established. Using stablecoins like USDC is recommended for purchases, as they do not incur tax liabilities unless converted from other cryptocurrencies.
