Depending on what country you live in, your cryptocurrency will be subject to different tax rules. The questions below address implications within the United States, but similar issues arise around the world. As always, check with a local tax professional to assess your own particular tax situation. 1. Do I need to report my cryptocurrency trades to the IRS? You need to report your cryptocurrency activity if you incurred a taxable event during the year. A taxable event is a specific scenario that triggers a tax liability. The below are a list of the taxable events as specified by the …

Members of the United States Congress sent a joint request to the Internal Revenue Service (IRS) to provide clarity on reporting crypto taxes, according to an announcement on April 11. 21 different representatives sent a bipartisan letter to the U.S. tax authority requesting guidance on how to report virtual currency taxes. The action took place before the filing deadline for federal income tax returns on April 15, 2019. In the letter, the representatives mentioned the IRS’s previous efforts to establish a tax treatment for virtual assets. The letter noted that the IRS’ approach to virtual property and currency transactions was …

Most tax and finance executives do not consider adopting blockchain technology, according to a recent survey conducted by Big Four auditing firm KPMG. The results of the poll were shared with Cointelegraph on Tuesday, April 9. A poll undertaken during a recent webcast, dubbed “Understanding Blockchain – It’s Not Just About Crypto,” was held in February 2019. KPMG asked around 450 tax and finance executives from different companies about blockchain and other technologies. Generally speaking, the survey has shown that tax and finance executives are seeking different solutions to eliminate routine tasks from their teams’ operations. However, blockchain adoption is …

Cryptocurrency-focused tax software CryptoTrader.Tax has integrated with leading American tax software Intuit TurboTax, according to a press release on April 4. The integration will purportedly allow users to export tax calculations from CryptoTrader.Tax to the TurboTax filing software, which will supposedly make the filing process easier. CryptoTrader.Tax co-founder David Kemmerer said: “You simply import your cryptocurrency trades into the platform using the technology we have built. The software will automatically crunch your capital gains and losses numbers and generate the necessary tax documents including the IRS form 8949.” The announcement comes ahead of the April 15 deadline for filing taxes …

The amount of Credit Karma Tax filers that reported short-term crypto losses in the first month of 2019 surged more than fivefold over the same period in 2018, the firm revealed on April 3. Credit Karma Tax, a tool launched by San Francisco-based personal finance firm Credit Karma back in 2016, offers a free tax filing service that can be used to report gains or losses from trading cryptocurrency. Today, Credit Karma released a comparative report of capital crypto gains and losses on federal taxes between Jan. 28 and Feb. 22, 2019, compared to those who filed their 2017 federal …

Last year was a bear market for cryptocurrencies. Many investors who did not know how to hedge their cryptocurrency investments saw these investments lose value from the market highs of 2017. Facing the deadline to report their taxes by April 15, 2019, United States individual taxpayers may wonder what their United States tax reporting obligations are if they held, donated or sold/exchanged their cryptocurrencies at a loss during 2018. A taxpayer’s dilemma Let's imagine a potential 2019 taxpayer sitting in front of his tax advisor and feeling embarrassed to tell him that he had lost 90 percent of a 100K …

The Ontario town of Innisfil, Canada, is now running a pilot program which will enable residents to pay property taxes with cryptocurrencies. The Innisfil Council voted to approve the program on March 27. Per the CBC, Innisfil, in partnership with cryptocurrency payment processing project Coinberry Pay, will allow its residents to pay property taxes in Bitcoin (BTC), wherein the latter will convert cryptocurrency to Canadian dollars and transfer payments to the town. The initiative may reportedly extend support to other cryptocurrencies including Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), and Ripple (XRP) at a later date. Innisfil Mayor Lynn Dollin …

The Canada Revenue Agency (CRA), the government’s tax collection service, is reportedly auditing investors in cryptocurrencies like Bitcoin (BTC), Forbes reports on March 6. Citing sources close to the matter, Forbes states that the CRA has sent extensive questionnaires to investors pertaining to their crypto-related activities in recent years. The questionnaires reportedly run 14 pages long with 54 questions and multiple sub-questions. The CRA told Forbes: “In order to protect the integrity of our risk assessment systems, we cannot comment on the specific information or criteria we use to select files for audit.” Per Forbes, the CRA is asking investors …

Big Four auditing and professional services firm Ernst & Young EY) has launched a tool for accounting and preparing taxes on cryptocurrency holdings, according to a press release published on Mar. 4. The new tool called EY Crypto-Asset Accounting and Tax (CAAT) is designed to improve accounting and tax calculations for digital currency transactions by both institutional customers that have cryptocurrency on their balance sheets and individuals who trade crypto assets on a smaller scale. The service will be available for those who use EY TaxChat and to EY Private Client Services clients. The EY CAAT can reportedly get information …

Lawmakers in the United States state of California have introduced a bill to allow cannabis-related business to pay fees and taxes in stablecoins. The bill was introduced by the California State Assembly on Feb. 21. Assembly Bill 953 would allow the state, city and county tax offices in California to accept stablecoins — cryptocurrency pegged to a physical asset or a fiat currency — from cannabis-related companies seeking to pay their excise or cultivation taxes, with effect from Jan. 1, 2020. The bill further reads: “The bill would authorize that city or county in determining that method to either accept …

Two businesses in the United States state of Ohio have paid taxes with cryptocurrencies, state Treasurer Robert Sprague said in a forum on Feb. 19. Ohio became the first state to allow businesses to pay taxes with cryptocurrencies like Bitcoin (BTC) in November 2018. During a forum covering policy issues facing the state, Sprague said that the treasury has only collected two receipts for tax payments using cryptocurrencies. He did not specify the specific amount of tax payments received through cryptocurrency. With that, Sprague emphasized that the Ohio state treasury does not manage cryptocurrency themselves, clarifying that they do not …

The Guangdong Municipal Taxation Bureau will implement an electronic invoice platform based on blockchain for the e-commerce industry, local Chinese news outlet Southern News Network reported on Feb. 18. Guangdong Province, one the most populated region in China, has opened the first blockchain electronic invoice service for customers and merchants, planning to extend their experience to the large-scale e-commerce field. By using a blockchain-based electronic invoice platform, the taxation authority will reportedly improve the efficiency and transparency of the invoice services, the publication underlines. The news outlet then states: “Blockchain technology has established a highly mutual trust data sharing mechanism …