Cryptocurrency investors face increased scrutiny from tax authorities this filing season, with potentially costly consequences for those who misunderstand reporting requirements.
The Internal Revenue Service considers every cryptocurrency transaction taxable, even those that don’t involve conversion to dollars.
“A lot of people still believe crypto-to-crypto trades aren’t taxable because they never receive cash in hand. Unfortunately, this is not the case,” Shehan Chandrasekera, head of tax strategy at CoinTracker, recently told CNBC.
Don’t Miss:
- Coinbase’s latest promo gets you up to $200 in crypto (Seriously!) — Here’s everything you need to know to take advantage of this offer.
- CEO of Integris gathered a team of senior investment managers who have $34.22 billion in combined owned and managed assets in the West Coast — here’s how to invest in their private credit fund that targets 12% annual interest rate.
Exchanging bitcoin for ether triggers a taxable event under IRS rules, which treat cryptocurrencies as property subject to capital gains tax. If the traded cryptocurrency appreciated since purchase, the transaction generates reportable gains.
Beyond misunderstanding crypto-to-crypto transactions, investors make two other …
Full story available on Benzinga.com