Did anyone really think that this day wasn’t coming? Sure the cryptocurrency world is built around anonymity and a cohesive community of deregulation but seriously, when there’s money to be made as a US citizen you can be sure that the IRS is quick to follow. This is looking like the case more recently, especially in light of all the attention that cryptocurrencies like bitcoin, bitcoin cash, ethereum, and litecoin are receiving right now.
Regulators and tax specialists are starting to look into cryptocurrency and how they can plan on treating them when it comes to taxing someone’s income. There are no set guidelines or procedures for how cryptocurrencies can or should be taxed. the recent split or fork of bitcoin and bitcoin cash has sparked a stir with many investors who wonder if profits fro bitcoin cash will be considered “free cash”.
Those who’ve been adding to their bitcoin position before the fork occurred have received an equivalent number of bitcoin cash based on the amount of bitcoin they held at that time. But while most things are considered anonymous, its clear that there needs to be somewhat of a veil lifted for the tax man.
“The IRS has already stated that Bitcoin is treated like property. Mining is considered income. Holding is the same as owning gold. A $0 cost basis means that you got capital for free, and if you sell it 100 percent is gains.”
According to 2014-21 Notice of IRS, “Virtual currency is treated as property for US federal tax purposes.”
US investors in particular have be suggested to check with their own accountants or tax specialists in their rightful state.