Nearly half of crypto traders won’t report to the IRS
A survey of tech workers shows how many will let today’s tax deadline pass without reporting crypto gains.
It’s the dreaded tax day, but almost half of tech-savvy cryptocurrency owners won’t let the deadline get them down. That’s because a TeamBlind survey found that 46% of respondents said they wouldn’t be reporting 2017 cryptocurrency earnings to the IRS.
Though many in the cryptocurrency industry treat bitcoin and the multitude of altcoins as digital currencies or speculations, the US tax collection agency has classified them as property. That means if any cryptocurrency was sold within the year, any gain in value would be subject to taxes.
For HODLers (a modern abbreviation for those holding on for dear life), however, no tax is due until cryptocurrencies are sold or converted to another coin. If you bought bitcoin or another coin in 2017 or earlier and haven’t touched it since, you’re in the clear.
Just like regulators are rushing to establish a legal framework for cryptocurrencies and initial coin offerings, the IRS is scrambling to keep taxpayers honest through an investigative task force that is probing exchanges like Coinbase for trading records.
Clearly, though, more cryptocurrency owners are declaring their profits now than have in the past, and some observers believe that at least some of the recent slump in coin prices can be attributed to recent selling in order to pay taxes.
For those who may yet be polishing off their tax return – or feel compelled to amend their return in light of the increased IRS scrutiny, we’ve compiled a resource to help you understand how cryptocurrencies should be treated for tax purposes in our guide to calculating taxes on crypto profits.
And if you’re scratching your head about why you’re technically liable for taxes if you bought something with bitcoin, you’re not alone. From state governments to the international G20, leaders are debating just what exactly cryptocurrency is and isn’t.
Disclosure: At the time of writing, the author holds XRP, CND, ANT and DRGN, and actively trades BTC and ETH.
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