All American Bitcoin investors had hoped to avoid paying tax for their profits this year, which is doing business for Altcoin, is in an unpleasant surprise. The new rules have been specially designed to ensure that American taxpayers can not use this method to avoid cutting the IRS.
Bitcoin to Altcoin is Not a “Like Kind” Exchange
To date, a tax lawyer or a cunning accountant has claimed that bitcoin trading is not a taxable event for another cryptocurrency, but US officials are working quickly to fill this gap. Decrease. There are explanations in the latest finance bill, which make it an invalid financial reducing strategy in the future.
The problem classifies BitQuinn as an asset to the IRS,
Which can be argued that crypto-exchanges make crypto for "kind" exchanges under Article 1031 of the Internal Revenue Code. The new bill defines "same" exchanges as related only to real estate transactions. To clarify things as possible, this means that if you swap BitCoin for an attachment (USDD) for example, this is a taxable event
"Some people think," I take my bitcoin, which the IRS has assumed as a fact for the reasons for an asset, another property exchange and investment reasons, "It seems that it can be 1031 exchange", Ivan Fox, tax mind To New York accounting firm Bergen, Zier told CNBC "I think it's a pull."
The Current Framework
Under the current tax structure, Americans should declare their bitcoin business profit themselves and calculate their contribution on the basis of their tax bracket. After holding an asset for less than one year, the sale is considered short-term investment and it is levied between 10% and 39.6%. After more than a year, sales of Bitcoin are called long term investment and up to 20%. If you do a business of more than $ 20,000 with Coinbase, then the IRS keeps your records in advance.
"If you make money in cryptococortian spaces, and you decide to buy (an Altcone), and you earn a day and $ 2 million come home with you, then the IRS is not stupid," Fox said. "Money comes from nowhere."
The IRS can decide to check someone's tax for three years and is known to use the services of channellis, Blockchain Analytics specialists to track Bitcoin users for tax evasion.
"If the IRS is able to understand what happened in a few years, and you have made a huge amount in 2017 and you have not declared it, you will have to face interest and penalties," said Fox, "it may be a risk Some people want to take it, but if you get caught then there can be bad results. "