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I thought you didn't need to unless you sold. If you simply buy or receive, that also needs to be reported? I have some of those stellar/lumens from when they awarded them for free for signing up back in 2016, but have never sold or transferred them.
How do they intend to record this?
Can someone explain how a "property payment" is reported and taxed: "A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property." https://www.irs.gov/newsroom/irs-reminds-taxpayers-to-report...
I thought you didn't need to unless you sold. If you simply buy or receive, that also needs to be reported? I have some of those stellar/lumens from when they awarded them for free for signing up back in 2016, but have never sold or transferred them.
- Trading cryptocurrencies produces capital gains or losses, with the latter being able to offset gains and reduce tax.
- Exchanging one token for another — for example, using Ethereum to purchase an altcoin — creates a taxable event. The token is treated as being sold, thus generating capital gains or losses.
- Receiving payments in crypto in exchange for products or services or as salary is treated as ordinary income at the fair market value of the coin at the time of receipt.
- Spending crypto is a tax event and may generate capital gains or losses, which can be short-term or long-term. For example, say you bought one coin for $100. If that coin was then worth $200 and you bought a $200 gift card, there is a $100 taxable gain. Depending on the holding period, it could be a short- or long-term capital gain subject to different rates.
- Converting a cryptocurrency to U.S. dollars or another currency at a gain is a taxable event, as it is treated as being sold, thus generating capital gains.
- Air drops are considered ordinary income on the day of the air drop. That value will become the basis of the coin. When it's sold, exchanged, etc., there will be a capital gain.
- Mining coins is considered ordinary income equal to the fair market value of the coin the day it was successfully mined.
- Initial coin offerings do not fall under the IRS's tax-free treatment for raising capital. Thus, they produce ordinary income to individuals and businesses alike.
https://www.cnbc.com/2018/01/30/cryptocurrency-and-taxes-wha...
* A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
* Payments using virtual currency made to independent contractors and other service providers are taxable, and self-employment tax rules generally apply. Normally, payers must issue Form 1099-MISC.
* Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2 and are subject to federal income tax withholding and payroll taxes.
* Certain third parties who settle payments made in virtual currency on behalf of merchants that accept virtual currency from their customers are required to report payments to those merchants on Form 1099-K, Payment Card and Third Party Network Transactions.
But I think this last one is probably the most interesting to us HODLers
* The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
"No", respond taxpayers. How do they intend to record this?
"No", respond taxpayers. How do they intend to record this?
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"No", respond taxpayers. How do they intend to record this?
It's that if they do catch you you are signing up for lots of fines and or imprisonment by not previously declaring.