Bch vs btcbitcoin cash hard fork cryptocurrency guide
Cryptocurrency investors are grappling with how to properly report their transactions to the IRS with the April 17 tax filing deadline fast approaching. To top off these concerns, investors could face potential penalties and interest for incorrect disclosures or failure to comply.
Tax practitioners offered Bloomberg Tax recommendations and insights for investors prepping their tax returns. Taxpayers must report gain or loss anytime they sell their cryptocurrency assets or exchange them for other types of property, including other forms of cryptocurrency. The reverse is true when calculating a loss. When calculating gain or loss in the crypto space, taxpayers need to ensure they are using reasonable and consistent methods, Fox said.
That way, bch vs btcbitcoin cash hard fork cryptocurrency guide if the IRS determines they owe additional tax and interest, they should be able to avoid penalties. Taxpayers should keep detailed and accurate records of their transactions. Tyra, of Jason M. The default position when there are missing trades is to assume a cost basis of zero, which can really hurt taxpayers that began investing in the market when values were high, he said. Large cryptocurrency exchanges, such as Coinbase Inc.
Taxpayers should be aware that small transactions, even those amounting to just a few U. For example, if a person uses bitcoin to purchase a cup of coffee and it has appreciated by 50 percent, the IRS treats the transaction as if the person sold the cryptocurrency on that date for the U. Tyra said the issue of reporting minor transactions has been less relevant for returns compared with previous years. It may make sense for some investors to request a six-month extension to file their tax returns, Fox said.
Fox suggested that cryptocurrency investors come up with a best estimate and pay that amount by the April deadline, or as much of the total balance as they can. Some practitioners take the stance that investors can use like-kind exchanges when trading one cryptocurrency for another. A like-kind exchange is a tool under tax code Section that allows taxpayers to postpone paying tax on the gain of a sale if the proceeds are reinvested in similar property.
For this and other reasons, he suggests that cryptocurrency investors take a conservative approach and not apply the Section exception to transactions. Zarlenga said her firm considers the blockchain each currency is on, their specific characteristics, and the overall similarity of the two currencies. For example, there are three official versions of bitcoin: After a hard fork takes place, the original owner of the cryptocurrency retains its interest in the original coin bch vs btcbitcoin cash hard fork cryptocurrency guide also has the right to use the forked coin.
Bch vs btcbitcoin cash hard fork cryptocurrency guide on both sides were outlined in a March 19 letter drafted by the American Bar Association Section of Taxation. The hard fork issue is similar to the like-kind issue in some ways, she said. White Paper The Value of a True Cloud ERP Platform This whitepaper highlights our perspective on the components and scorecard to use to not only evaluate a true cloud solution, but also analyze for yourself how our various platform offerings help you to meet your organization objectives today, adapt to the industry disruptions of tomorrow and realize savings.
Partner Insights Sponsor Content From: ERP software May 1. Why wouldn't a hard bch vs btcbitcoin cash hard fork cryptocurrency guide be considered like a stock split, with the original cost basis spread out across the entire asset, instead of like a dividend?
Like what you see? Make sure you're getting it all Accounting Today is a leading provider of online business news for the accounting community, offering breaking news, in-depth features, and a host of resources and services.