IRS to Issue Tax Guidance on Crypto
By Block Society
Ever since IRS determined virtual currencies to be taxed as property in 2014 via its Notice 2014-21, significant ambiguity still existed for how to tax virtual currencies. This ambiguity was compounded by the 2017 bull run in which both the masses and the accountants alike struggled with the intricacies of virtual currency taxation. For instance, it was not immediately clear to many cryptocurrency investors and traders that a cross-transaction between different virtual currencies triggers a capital gain tax, as well as any purchase of goods via virtual currency.On April 11th, Rep. Tom Emmer requested for the IRS to provide a more comprehensive guideline to virtual currency taxation, and with success. On May 20th, the IRS Commissioner Charles P. Rettig confirmed that IRS will soon release a thorough guide for virtual currency taxation on an undetermined date.
Rettig responded to Rep. Tom Emmer:
“I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions and have made it a priority of the IRS to issue guidance.”
As such, the IRS plans to provide clarity on the tax treatment of virtual currencies’ cost basis calculation, cost basis assignment, and forks.
Biggs, J. (2019, May 20). IRS Says It Will ‘Soon’ Issue Crypto Tax Guidance in First Since 2014. Coindesk. Retrieved from https://www.coindesk.com/irs-says-it-will-soon-issue-crypto-tax-guidance-in-first-since-2014