A recent Twitter poll targeting crypto enthusiasts showed a majority of people react negatively when asked about taxes on their cryptocurrency. Only a fifth of survey participants indicated that they had already completed their returns and filed taxes.
This poll in Twitterquickly attracted attention, with almost 10,000 people already participating. Despite guidance issued by the IRS regarding digital currencies, people seem to be blatantly ignoring the rules, trusting that the agency simply will not be able to detect any signs of crime.
More than 16 million Americans are already proud owners of cryptocurrency, with approximately 20% of students using school loans to purchase digital currencies. As the number of users increases, the number of problems also increases.
What does the law say?
In the above guidance, the IRS clearly states that the agency will treat cryptocurrency as taxable property. In addition, the term “cryptocurrency” itself includes all the characteristics of a “convertible virtual currency” that has a fiat equivalent and can replace it. ( True, not all cryptocurrencies fit this description. Bitcoin does. )
IRS Tip: “Keep Trade Logs”
“As the industry evolves, the best way for you to keep accurate records of the dates of your purchases.” In addition to this, the IRS, as stated above, views cryptocurrencies as property. In other words, you will have to pay tax if you start making profits from your trading activities. You should have the following information:
Time of purchase
Investment amount
Time of sale
Income generated
Everything else is simple math.
Don’t do something stupid if you are a newbie
Hiding information from the IRS is not a good idea. While you may be able to remain undetected for a while, there may be other types of trades that may appear in the future that are no longer available to you. While the guidelines are not binding, they do provide some guidance on the penalties and penalties that defaulters may face. In some cases, “taxpayers may be subject to criminal prosecution for withholding information to reduce tax consequences,” the IRS said in a March 23 statement...
But for now, crypto enthusiasts are playing “Catch Me If You Can” and trying on the role of Frank Abagnale.
And given the clumsiness of the bureaucratic fiscal machine, the ending of this game is not at all predetermined, in our opinion.
According to http://bitcoinist.com
You May Also Like
Coinfloor received a license from the Government of Gibraltar
London-based cryptocurrency exchange Coinfloor announced that the government of Gibraltar has issued the company a license to conduct exchange activities in this jurisdiction. According to Finance Magnates, the exchange received permission to supply DLT (distributed ledger technology) services in accordance with the 2018 regulations “on the organization of financial services.”
India to unveil draft cryptocurrency regulation in December
According to the news publication Quartz, a working group tasked by India's finance minister to prepare regulations and recommendations regarding the blockchain industry and the activities of companies in the cryptocurrency sector is expected to unveil the bill next month.
