How to know if you need tax on bitcoins


While the number of people who hold virtual currencies is not certain, bringing the exchange of US cryptocurrencies to Coinbase there were about 11.7 million users at the end of October 2017, according to data compiled by Alistair Milne, co-founder and chief investment officer of Altana Digital Currency Fund. (Which exceeded the number of active brokerage accounts then opened to Charles Schwab.)

But unlike traditional investments, in which case you are likely to be issued with a 1099 form (which is also sent to the IRS) to track your holdings and tax obligations, which is not necessarily the case with virtual currency . Coinbase will provide 1099 forms to "certain business customers" and "customers who have received at least $ 20,000 in cash for virtual currency sales of at least 200 transactions in a calendar year", according to the customer service page. ;company.

But without such documentation, it can be difficult for the IRS to enforce its rules.

"[For] Now it's hard for the IRS to really discover on an individual basis if you've reported sales or exchanges of virtual currencies, "says Losi.

In fact, it seems that hardly anyone is paying taxes on their crypto-earnings. For example, in 2015, only 802 Coinbase users reported the earnings of bitcoins, although the exchange had 2.9 million users in December of that year, according to Milne data.

Recently, however, the IRS has taken steps to identify tax payers who profit, but do not report.

In 2016, IRS convened the Coinbase documents, and a court ruled that the company was to disclose information on approximately 14,000 users who "bought, sold, sent or received at least $ 20,000 bitcoins in a given year" , reports CNBC.

Even if you are not a strong user of Coinbase, you are obliged to report, and any tax payer in the United States can potentially be controlled by the IRS. The IRS examined 0.6 percent of the 193 million statements presented in the 2016 fiscal year, or about 1.2 million.

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