This is due to how cryptocurrencies are classified by the IRS. Currently, they are classed as assets (property) as opposed to currencies, and thus any "realized

This is due to how cryptocurrencies are classified by the IRS. Currently, they are classed as assets (property) as opposed to currencies, and thus any "realized gains" are taxable events. This includes the above example, where you may have technically "realized a gain" while buying a grilled cheese with Bitcoin. https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies https://www.irs.gov/businesses/small-businesses-self-employe...