“There is confusion whether transactions in Bitcoin should be treated as property, barter, foreign currency, or a financial instrument. How you see it can determine the tax treatment. Barter transactions may be the most logical treatment, but not everyone agrees. Besides, even without Bitcoins or other exotica, bartering transactions are inherently under-reported. And then there is tax basis. If you sell something for less than you paid, you shouldn’t have gain. That’s true in U.S. dollars or in Bitcoin. If you sell something at a garage sale, you may or may not have income. Brave new world? GAO and IRS don’t think so.”

http://www.forbes.com/sites/robertwood/2013/06/18/bitcoin-in-irs-crosshairs-says-government-report/

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