Cryptocurrency Tax Law: Tax Accountability Cheat Sheet

Crypto tax accountability cheat sheetYou must disclose the following cryptocurrency activities in tax filings and other financial reporting requirements:

  • Cryptocurrency Trades and Sales: Buying and selling tokens produces capital gains and losses. You must account for both in tax calculations. Converting tokens into fiat currencies also counts.
  • Cross-Token Exchanges: Bartering one token for another — using Bitcoin to buy an altcoin — is a taxable event, since the transaction is essentially based an assumed fiat monetary value.
  • Cryptocurrency Payments: Accepting payments for products and services doesn’t absolve you from declaring it as income. Again, since the tokens represent a fiat currency value, it’s fair game for Uncle Sam.
  • Mining Cryptocurrency: Yes, mined tokens are considered earned income in the eyes of the IRS and SEC. As such, you should account for them in your tax reporting.
  • Initial coin offerings: Monies collected during an ICO are considered taxable earned income, not proceeds from a tax-exempt capital raise.

Connect With A Cryptocurrency Tax Lawyer Today

If you’re unsure whether or not your cryptocurrency holdings are subject to tax reporting requirements or other government filings, give us a call. Our firm has both tax and tech divisions, making us an ideal choice for cryptocurrency investors and businesses.

Head here to learn more about Andrew Gordon, the firm’s main crypto and blockchain lawyer. The page is useful for crypto investors, businesses, and reporters, as it includes helpful videos about the intersection of tax law and tokens.

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