Bitcoin Investors Must Report Gains to the IRS
As cryptocurrency comes to the forefront with more investors jumping aboard, it is important to be aware of the tax issues and how to report gains accurately to the Internal Revenue Service. No excuses!
According to Node40, a blockchain tech company, only 800 Americans reported their Bitcoin gains from 2013 through 2015. It is important to abide by the law as you enjoy your winnings.
Let us remind you of the ongoing IRS lawsuit against Coinbase; with heightened probes into cryptocurrency tax evasion, it has never been more timely for cryptocurrency users to declare profits.
From a legal perspective, you must be aware of relevant issues and regulations and of the technology out there to assist bitcoin investors.
Robert Graham partner and head of the digital currency services practice at Friedman LLP, believes in educating investors in important legal pointers and definitions to make sure that, if they’ve made gains, they have no uncertainties.
First of all, be aware of the regulations. Graham explains that the IRS offered guidance on how to apply existing tax principles to transactions using virtual currency in Notice 2014-21.