• Advertise
  • Submit a Press Release
NewsBTC
Bitcoin & cryptocurrency news today, price & technical analysis
Price & Market
Cap Data from
Nomics Logo
  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • TradeeToro
  • Invest BTCTry
  • Join STC ICOBuy
No Result
View All Result
  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • TradeeToro
  • Invest BTCTry
  • Join STC ICOBuy
No Result
View All Result
NewsBTC
No Result
View All Result
Price & Market
Cap Data from
Nomics Logo
Home Cryptocurrency news Bitcoin

Confusion Over Bitcoin Taxation Leads to Poor Reporting of Gains and Losses

Rick Delafont by Rick Delafont
3 years ago
in Bitcoin, Cryptocurrency news
Reading Time: 2min read
IRS
Advertisement

With Bitcoin and other cryptocurrencies making huge sums of money for those adept at timing the market, the U.S. Internal Revenue Service (IRS) is keen to make sure it receives its cut of the profits.

However, a lawyer from Morgan Lewis & Bockius states that many users do not realise that even when they have used a currency, gains and losses must be reported on every transaction. This causes many to simply ignore the looming issue of taxation.

Poor Reporting is Causing the IRS to Lose Out on Crypto Taxes

Sarah-Jane Morin spoke to CNBC about cryptocurrency taxation earlier today. The partner at the national law company Morgan Lewis & Bockius stated that there seemed to be some confusion over how exactly to report gains and losses made when investing in digital currencies and that this encouraged many to not bother reporting accurately:

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

“A lot of people treat Bitcoin as cash, or the same as [mobile payment service] Apple Pay… If they exchange it for another cryptocurrency or use it at, say, Overstock.com, they’d have to compare the fair market value of it that day versus their cost basis. They’re not always tracking that kind of information.”

The IRS sees Bitcoin and other digital assets as property, rather than a currency. This essentially means that every time a user buys something with a cryptocurrency, they are creating a taxable event. Each owner of Bitcoin must log the price they bought coins or tokens at and the difference between that price and the one they managed to sell it for as a gain or loss.

Just like any investment, cryptos owned for less than a year are taxed as regular income. Those who have held their coins or tokens longer than a year receive a slightly more favourable rate. This ranges from between zero and twenty percent.

If the price that you eventually sell your digital currency for is lower than it was when you bought it, the loss can be used against the gains made with any other investment in a qualifying asset. Up to $3,000 can also be used to offset standard income for the tax year in question, as well as in future years.

During the period between 2013 and 2015, the IRS only received reports on digital currency holdings from around 800 individuals. Considering that each Bitcoin rose from $13 to $430, this figure is suspiciously low.

Morin seems willing to give folks the benefit of the doubt, however. Rather than accuse all those who experienced gains from their digital currency investments of tax avoidance, she instead states that the often-confusing process and newness of the entire space encourages sloppy record keeping.

However, she did go on to state that the IRS would prefer to see any effort made to report gains and losses than to simply ignore the issue and play “audit lottery”:

“In my view, the IRS would rather see some compliance made with your best effort instead of just throwing up your hands and saying it’s too hard.”

Featured image from Shutterstock.
Tags: Bitcoin taxirstax
TweetShare
Nexo Logo
BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner? Win up to $1,000,000 in One Spin at CryptoSlots
Rick Delafont

Rick Delafont

Based in Europe, Rick has written about the cryptocurrency industry since 2016. He was first drawn to Bitcoin as a means of payment but quickly became fascinated by its wider potential implications. His interests lie in the political, economic, and social impact of the unfolding digital asset revolution.

Related Posts

BNB Soars Above $600, is an Ethereum Flippening on The Cards?

BNB Soars Above $600, is an Ethereum Flippening on The Cards?

31 mins ago
Bitcoin May Hit $100,000 Soon on "Wildly Bullish" Sentiment: Analyst

Bitcoin May Hit $100,000 Soon on “Wildly Bullish” Sentiment: Analyst

42 mins ago
unifarm

UniFarm Raises $2 Million After Launching Innovative Farming Pool Featuring 17 Top DeFi Projects

3 hours ago
coinzoom

CoinZoom Disrupts the Remittance Landscape With 0% Commission And Cryptocurrencies

4 hours ago
Ethereum Institutional Interest is Rapidly Growing; Here's What On-Chain Data is Showing

Ethereum Institutional Interest is Rapidly Growing; Here’s What On-Chain Data is Showing

4 hours ago
Things Look Rosy For Coinbase Ahead of This Week’s Nasdaq Debut

Things Look Rosy For Coinbase Ahead of This Week’s Nasdaq Debut

5 hours ago

Premium Partners

Top Brokers

eToro

eToro

Review · Visit
Evolve Markets

Evolve Markets

Review · Visit
Bybit

Bybit

Review · Visit
ArbiSmart

ArbiSmart

Review · Visit
PrimeXBT

PrimeXBT

Review · Visit
Moneta Markets

Moneta Markets

Review · Visit

Top Casinos

BitStarz

BitStarz

Review · Visit
mBit

mBit

Review · Visit
CryptoGames

CryptoGames

Review · Visit
Bonusfinder DE

Bonusfinder DE

Review · Visit
Bspin

Bspin

Review · Visit
Wolf Bet

Wolf Bet

Review · Visit

Top Sportsbooks

1xBit

1xBit

Review · Visit

Top ICOs

Student Coin

Student Coin

Review · Visit

Token sale

Holdefi

Holdefi

Review · Visit

Press Releases

Raze Network to Launch Its Public Distribution Sale on Balancer Liquidity Bootstrapping Pool

April 12, 2021

Blockchain Goes Mainstream With Rowan Energy

April 12, 2021

Two Leading Russian Media and PR Agencies United Into One Full Cycle Advertising Agency

April 9, 2021

Newsletter Signup


ABOUT US

NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

COMPANY

  • Advertising
  • Comments Policy
  • Privacy Center
  • Sitemap
  • About Us
  • Contact

Technical Analysis

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Chainlink (LINK)
  • Cardano (ADA)
  • Tezos (XTZ)

LINKS

Auto Trading Software ▸

Cryptocurrency news

  • Bitcoin
  • Ethereum
  • Ripple
  • Chainlink
  • Cardano
  • EOS
  • Tezos

© 2020 NewsBTC. All Rights Reserved.

  • News
    • Bitcoin
    • Ethereum
    • Ripple
    • Cardano
    • Tezos
    • EOS
    • Chainlink
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Education
    • Accepting Bitcoin payments
    • Using Bitcoin
    • What is Bitcoin Mining
    • How to Trade Bitcoin
    • How to Buy Bitcoin
    • Digital Currency Exchange
    • Proof of Existence
    • Is Bitcoin legal?
    • Bitcoin Books
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Trade
  • Invest BTC
  • Join STC ICO

© 2020 NewsBTC. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.