Amazon, eBay, and other online retailers are selling skin creams with dangerous levels of mercury, study shows
Credit bureaus to remove most medical debt from credit reports

Crypto investors need to pay taxes on virtual investments

Income-tax-Calculator Tax Notebook Pens ge8ef1a93a_640Consumers need to accurately declare and pay taxes on their virtual investments.

Failure to properly declare and pay taxes on cryptocurrency transactions may be a civil or criminal violation of federal tax law, as well as a violation of state tax law, which could result in steep financial liabilities, said New York Attorney General Letitia James.

As the tax filing deadline approaches, James encourages crypto investors and their tax advisors to consult guidance from state financial departments and the Internal Revenue Service to accurately file their taxes and avoid penalties.

“Crypto investors, just like working families and everyone else, must pay taxes,” she said. “Cryptocurrencies may be new, but the law is clear: Investors must accurately report and pay taxes on their virtual investments.”

Recently there has been a dramatic surge in the production, sale, and acquisition of “virtual” or “crypto” currencies such as Bitcoin and Ethereum. Virtual currency is taxed in the same way as any other assets, such as stocks and gold. 

In addition, the IRS says that taxpayers who receive “virtual currency as payment for goods or services, must, in computing gross income, include the fair market value of virtual currency, measured in U.S. dollars, as of the date that virtual currency was received.”

An exchange of virtual currency for other property that results in either a gain or loss needs to be reported by taxpayers. For example, taxpayers must calculate and report any gain or loss when using cryptocurrency to purchase a luxury electric vehicle, a plane ticket, or even a cup of coffee. 

Taxpayers should review guidance set out in the IRS and the state where they live to determine tax due on their cryptocurrency transactions.

Anyone with information relating to a taxpayer’s willful failure to report income involving cryptocurrency can report it to the IRS’s Whistleblower Office.



Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)