Question 12 of 75. Jamie converted $500 into Bitcoin in November 2018. In October 2019, when the value of his holding had increased to $1,500, Jamie decided to purchase a diamond ring using Bitcoin. He spent the entire holding on the ring. How will Jamie report this on his tax return? No reporting is necessary when purchases are made using virtual currency. He will report $1,500 as ordinary income. No reporting is necessary until he sells the ring. At that time, he will report a gain or loss, depending on the sale price of the ring As a short-term capital gain of $1,000 on Form 8949. His basis in the ring is $1.500. *