Crypto audits Published on March 25, 2020 Edit article View stats Lance WallachStatus is online Lance Wallach Managing Director at vebaLLC 42 articles What does it have for traders? The updated guidance from IRS suggests that it is staffed with knowledgeable persons who understand the jargon better when it comes to the ledgers, on-chain vs off-chain transactions, airdrops, etc., This is a good sign as the upcoming regulations will be very informed in nature and would help increase the adoption among the masses.
A TL;DR summary Some of the key points that were confirmed in today’s FAQs provided with IRS guidance on cryptocurrency.
Specific identification while defining gain/loss is allowed – else, FIFO should be the way to go. More emphasis on fair market value (FMV) based on the timestamp of the transactions. “Crypto to Crypto” or “Exchanging Crypto for goods/services” is a taxable event. Cost basis includes fees, commissions and other acquisition costs in U.S. dollars. Paid in crypto is considered income and should be reported as income by FMV of crypto on that date. Paying for services or goods using crypto results in a capital gain or loss. No income needs to be reported in case you don’t receive a new coin after a hard fork. The value of a new coin (if received) will be the FMV at the time of the issue. If the coin you own has no published value, then value = value of goods/services exchanged No tax implications when a soft fork happens. GIFTS RELATED INFORMATION To calculate gain, the purchase price of a gifted coin is donors basis+gift tax If it’s a loss, the purchase price will be lesser of the donor’s basis or the fair market value. IRS definition of Virtual Currency The IRS has been working well on defining various cryptocurrency-related terminology and also help citizens understand the tax liabilities and activities that lead to taxable events.
According to the IRS, “Virtual Currency is a digital representation of value that functions as a medium of exchange, a unit of account, and a store of value.” Following is the screenshot from the original definition of Virtual currency by the IRS. However, a recent modification or edits to the document suggest having removed the Robux by Roblox (virtual currency in the Roblox game to buy avatars and create custom upgrades) and V-bucks of Fortnite game (virtual currency inside the Fortnite game to buy weapon upgrades and more virtual abilities inside the game).
Report this Published by Lance WallachStatus is online Lance Wallach Managing Director at vebaLLC Published • now
Crypto audits
ReplyDeletePublished on March 25, 2020
Edit article
View stats
Lance WallachStatus is online
Lance Wallach
Managing Director at vebaLLC
42 articles
What does it have for traders?
The updated guidance from IRS suggests that it is staffed with knowledgeable persons who understand the jargon better when it comes to the ledgers, on-chain vs off-chain transactions, airdrops, etc., This is a good sign as the upcoming regulations will be very informed in nature and would help increase the adoption among the masses.
A TL;DR summary
Some of the key points that were confirmed in today’s FAQs provided with IRS guidance on cryptocurrency.
Specific identification while defining gain/loss is allowed – else, FIFO should be the way to go.
More emphasis on fair market value (FMV) based on the timestamp of the transactions.
“Crypto to Crypto” or “Exchanging Crypto for goods/services” is a taxable event.
Cost basis includes fees, commissions and other acquisition costs in U.S. dollars.
Paid in crypto is considered income and should be reported as income by FMV of crypto on that date.
Paying for services or goods using crypto results in a capital gain or loss.
No income needs to be reported in case you don’t receive a new coin after a hard fork.
The value of a new coin (if received) will be the FMV at the time of the issue.
If the coin you own has no published value, then value = value of goods/services exchanged
No tax implications when a soft fork happens.
GIFTS RELATED INFORMATION
To calculate gain, the purchase price of a gifted coin is donors basis+gift tax
If it’s a loss, the purchase price will be lesser of the donor’s basis or the fair market value.
IRS definition of Virtual Currency
The IRS has been working well on defining various cryptocurrency-related terminology and also help citizens understand the tax liabilities and activities that lead to taxable events.
According to the IRS, “Virtual Currency is a digital representation of value that functions as a medium of exchange, a unit of account, and a store of value.”
Following is the screenshot from the original definition of Virtual currency by the IRS. However, a recent modification or edits to the document suggest having removed the Robux by Roblox (virtual currency in the Roblox game to buy avatars and create custom upgrades) and V-bucks of Fortnite game (virtual currency inside the Fortnite game to buy weapon upgrades and more virtual abilities inside the game).
Report this
Published by
Lance WallachStatus is online
Lance Wallach
Managing Director at vebaLLC
Published • now