> Treat e-gold like a foreign currency. With each transaction is an exchange
> rate. You can use the amount of gold, and the exchange rate to get a US
> dollar equivalent for each transaction in your accounting system.
That's how I'd love to do it, but I'm not sure the IRS would approve.
Suppose, for example, that I receive an ounce of E-Gold in revenue at a time
when an ounce goes for $300. Okay, I mark it in the books as $300 in
revenue. Then Alan Greenspan goes on a bender and starts "injecting
liquidity"--or whatever may be the Newspeak du jour for debasing our
nation's money--and gold goes to $1000 and ounce. Now I have Omnipay send a
$1,000 check to someone my business owes money, and it costs me the same
ounce of gold that I marked as $300 in revenues. To an economist I haven't
gained jack shit, of course, but in the eyes of the IRS I've realized a $700
gain.
The same would hold true if I were dealing in French francs and the value of
the franc changed.
My concern is not with the tax itself, but with the enormous complexity that
arrises trying to manage a FIFO system of accounting for what centigram was
"bought" or "sold" (for practical purposes) when and for how much when the
number of transactions can be very great and transactions are not all for
the same size as in my example.
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