Problem
Your client Janet is an investor in Bigcoin, a virtual currency. During the year she had the following transactions related to the Bigcoin,
• Earns $1,000 in Bigcoin from mining.
• Purchases $1,000 in Bigcoin from a friend.
• Sells the purchase in part (b) in the market to a third party for $1,400.
• Spends $1,000 of Bigcoin to acquire an asset worth $1,500.
• Spends $1,000 of Bigcoin to acquire an asset worth $750.
• Holds Bigcoin that she bought in February for $1,000. On December 31, the Bigcoin is worth $1,200.
What would you advise to the client regarding income tax consequences associated with these transactions.