Steak ‘n Shake, the popular American fast-food chain, has jumped on the crypto bandwagon by allowing customers to purchase their juicy burgers with Bitcoin. But before you rush to pay for that double cheeseburger with digital currency, tax experts are sounding the alarm about potential pitfalls. Using Bitcoin for everyday transactions, they caution, could lead to unexpected tax complications, a topic that seems to be stirring the pot in crypto circles.
The Tax Trap
Here’s the catch: Every time you spend Bitcoin, it’s considered a taxable event. In the eyes of the IRS, using Bitcoin is akin to selling it. This means that if your Bitcoin has appreciated in value since you acquired it, you might owe capital gains tax on the difference. “People often forget that when they use cryptocurrency for transactions, they might be incurring a tax liability,” explains Laura Walters, a crypto tax attorney at KPMG. She adds, “It’s a simple burger purchase that could turn into a complex tax calculation.”
For crypto enthusiasts, the appeal of spending digital currency on everyday items is undeniable. Yet, every transaction must be meticulously tracked for tax purposes. This adds a layer of complexity that many casual users might not anticipate. While the IRS has been clear about this rule for years, the increasing adoption of cryptocurrencies in retail settings is bringing it back into the spotlight. For more on how regulatory bodies can simplify crypto regulations, see The SEC Can Learn From the IRS in Making Regulation Simpler for Crypto.
Navigating the Crypto Tax Maze
The situation is further complicated by the volatility of Bitcoin and other cryptocurrencies. Prices can swing wildly in a matter of days—sometimes even hours—making it even more challenging to keep track of gains and losses for tax reporting. “Imagine buying Bitcoin at $30,000 and using it at $60,000 for a meal. That’s a significant gain you need to report,” says Walters.
In response to these challenges, some companies have emerged to help crypto users manage their tax obligations. Platforms like CoinTracker and TaxBit provide tools to sync transaction histories and calculate tax liabilities, aiming to simplify what can be an arduous process. However, these services come at a cost, and not everyone may find them accessible or affordable.
A Broader Implication for Crypto Adoption
The burgeoning use of Bitcoin and other cryptocurrencies in everyday transactions raises broader questions about their role in the mainstream economy. Will the allure of paying with crypto outweigh the hassle of managing tax obligations? Some believe that as technology evolves, these issues will be ironed out. Others remain skeptical, arguing that without significant changes in tax policy, widespread adoption of cryptocurrency as a transactional medium remains a distant dream.
Moreover, there are calls for regulatory clarity. Many in the crypto community advocate for updated tax guidelines that reflect the unique nature of digital assets. “The tax code wasn’t designed with cryptocurrency in mind,” says Sam Reynolds, a blockchain policy analyst. “We need tailored regulations that acknowledge the distinct characteristics of these digital currencies.” This sentiment echoes the ongoing legal battles over crypto data privacy, as seen in Coinbase Leaps Into Supreme Court Case in Defense of User Data Going to IRS.
The Future of Crypto Spending
As we move through 2025, the landscape of cryptocurrency usage continues to evolve. Yet, questions linger about whether regulatory frameworks can keep pace with innovation. For now, crypto users must navigate this labyrinth with caution, armed with knowledge and perhaps a tax advisor on speed dial.
While Steak ‘n Shake’s move to accept Bitcoin is a nod to the growing influence of digital currencies, it also highlights the need for individuals to understand the tax implications of their crypto activities fully. So, next time you consider buying that milkshake with Bitcoin, remember: it might come with a side of tax responsibilities. And as the crypto world keeps spinning, who knows what the next chapter will bring?
Source
This article is based on: Buy a Burger With Bitcoin? Beware the Tax Risks, Experts Warn
Further Reading
Deepen your understanding with these related articles:
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- Mesh Adds Apple Pay to Let Shoppers Spend Crypto, Settle in Stablecoins
- Visa and Baanx Launch USDC Stablecoin Payment Cards
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
