Notice 2014-21 is the IRS's foundational guidance on virtual currency, establishing that cryptocurrency is treated as property for federal tax purposes, so general property transaction rules apply rather than currency rules.
The notice answered the basic questions: gains are capital gains, mining is income, payment in crypto is wages or self-employment income at fair market value, and every disposal is a taxable event. Later guidance (Revenue Rulings 2019-24 and 2023-14) built on it.
Why it matters: every argument that crypto should be taxed like currency, or not at all, runs into this notice, which has been the rule since 2014.
IRS crypto audits and letters, unreported years, theft loss opinions, and returns that survive an audit.
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Definitions are general information, not legal advice, and may not reflect the most recent changes in law.
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