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Nasir and Matt discuss the IRS deciding that Bitcoin is property and not currency, the recent ruling that college football players may unionize, a lawsuit filed over an asset purchase gone wrong, and why one early investor is not excited about the Candy Crush IPO. They also answer questions about putting the "LLC" designation after your business name, finding the right domain name, and when you can use the trademark symbol. Also, as mentioned, Nasir's prediction of 2 perfect brackets didn't even make it to the second week of the tournament. Full Podcast Transcript NASIR: Welcome to Episode 24 of Legally Sound Smart Business. This is Nasir Pasha. MATT: And this is Matt Staub. NASIR: Nice formal introduction that time but we’re ready to go. MATT: Things feel right again. It was thrown off the last couple of episodes. NASIR: Well, that was the purpose. MATT: It’s good to be back. All right, let’s get into this first story for this week and this was a really big one. It’s something we’ve been waiting on. NASIR: Huge news. MATT: Maybe not necessarily we but a lot of people have been waiting for the IRS to come down to decide what they’re going to do – not only with Bitcoin, that gets a lot of the press, but just virtual currency in general. I think it turned out as what a lot of people that are familiar with Bitcoin thought was going to happen. They ruled that – well, first things first – they ruled that it’s not currency; it’s property. Any gains on it are actually going to be capital gains. Like I said, this is what people thought was going to happen but it’s still kind of weird. There’s a lot of little things in here that might shy people away from it but there’s also some positives as well. NASIR: Well, I’d like to hear the positive because my first reaction was annoyance because the requirements to actually track this stuff is going to be kind of difficult. Our firm has dealt with Bitcoin in the past and we’re dealing with it now. But, to me, these new IRS rules are just going to be a lot harder to report. Because it’s property, we have to track at the time that we receive the Bitcoin how much it’s worth. And then, if we use it again to let’s say buy a TV, then we have to track that new price that the Bitcoin is currently worth and then calculate capital gains and capital loss at that transaction. I don’t know. It seems like a huge burden upon reporting. MATT: Yeah, and I definitely agree with that and there’s no doubt that it is going to be more burdensome. There’s an example where you get Bitcoin and you use it to go buy a sandwich. Technically, you have to calculate the potential capital gains or capital loss on that transaction. I guess, in that sense, it’s overly burdensome. But, on the pro side, I was thinking it’s not taxed at ordinary income so that’s definitely a plus – I guess more so for investors. NASIR: That’s true. MATT: Or maybe, if an employee gets paid with Bitcoin, I would think that they wouldn’t be taxed at capital gains rates like they’re saying and not ordinary income. NASIR: The capital gains rate is obviously lower than ordinary income. But then, also, I think the proponents of Bitcoin are maybe upset about this because it’s not considered a currency and because it’s considered almost an investment, people are going to see it that way and not going to be able to use it in the same way that a currency is supposed to be used and it kind of goes against the entire purpose of the Bitcoin itself. MATT: Overall, I’m definitely siding with it’s more of a negative than a positive. I’m just trying to point out the one or two positives that are there. But we’ll see. The people I’ve spoken to that are in the Bitcoin world, I think they maybe are a little bit upset about it. But, at the same time, they say that it’s all the more reason to get in Bitcoin because, the more you get into it, the stronger everyone becomes. It’s a positive outlook, I guess. But, underneath, people might be upset.