The Internal Revenue Service issued a notice Tuesday saying that Bitcoin and other virtual currencies should be treated as property for federal tax purposes and the general rules for property transactions should apply.

The notice provides answers to frequently asked questions on virtual currencies such as Bitcoin, which have been gaining adherents in recent years. However, Bitcoin has seen its image tarnished in recent months with the collapse of popular Bitcoin exchanges like Mt. Gosk and Vicurex, due to hacking attacks that caused hundreds of millions of dollars to disappear, and the shutdown of the site Silk Road and the arrest of its founder on money laundering and murder conspiracy charges.

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