Long-awaited IRS guidance on the taxation of virtual currency is out. Preliminary rules from 2014 treat bitcoin and other cryptocurrencies as property for tax purposes. Taxpayers, Congress and tax professional groups have been urging the Service to update its rules, and IRS has now done just that. Among the tax topics addressed: Selling, trading and receiving cryptocurrency. Calculating gain or loss. Figuring basis when the currency is received by an employee or someone else for services. Tax consequences when the currency is split into two as a result of certain software changes, commonly referred to as a hard fork. Donating or gifting virtual currency. Plus tax return reporting and recordkeeping. View details at www.kiplinger.com/letterlinks/vcfaq and in Revenue Ruling 2019-24. IRS is serious about virtual currency and wants more taxpayer disclosure. Starting with the 2019 return filed next year, individuals must answer on Schedule 1 of the 1040 whether they’ve sold, sent, acquired or exchanged virtual currency.

Virtual Currency

by | Nov 7, 2019 | Bitcoins, IRS, TallyTaxMan | 0 comments