Cryptocurrencies Could Be Leading Americans To Tax Troubles!

Submitted by MAGA Student

Posted 11 days ago

A very small number of people who have made money trading Bitcoin and other cryptocurrencies have reported their gains to the IRS, setting themselves up to potentially be audited.  

From Zerohedge:

Despite the IRS's victory late last year in a lawsuit against Coinbase - the most popular cryptocurrency exchange in the US - that forced the organization to hand over transaction data pertaining to more than 14,000 users, surprisingly few Americans are reporting income from cryptocurrency trading as income this tax season.

That's even more surprising considering the astronomical gains realized, not just by bitcoin, but by dozens of coins.

Fewer than 100 people out of the 250,000 who have already filed federal taxes this year through Credit Karma reported a cryptocurrency transaction, Reuters reported Tuesday.

This, despite nearly 57% of the 2000 Americans surveyed by the credit score startup and research firm Qualtrics last month saying they had realized some gains from cryptocurrencies last year, according to a Credit Karma study. About the same percentage of respondents said they had never reported a crypto transaction to the IRS. Meanwhile, about half said they understood how cryptocurrency gains might impact their taxes.

As Reuters explains, the IRS considers cryptocurrencies to be property for federal tax purposes, meaning any profits or losses from the sale or exchange of the virtual coins must be reported as capital gains or losses. Still, it remains unclear exactly how many Americans hold cryptocurrencies, which were initially designed to protect the identities of their holders and can be difficult for federal authorities to trace. Coinbase famously surpassed retail brokerage Charles Schwab in terms of the number of accounts last year, but its unclear how many of those accounts are actively trading.

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