You 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
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