Swarms of Crypto Enthusiasts hash into the local ‘seasonal’ tax office with Coinbase printouts and Excel files showing all of our transactions for the calendar year...
The ‘tax pro’ asks you what is this Ether thing and does the Bitcoin have anything to do with some illegal coin collecting scam on the internet...
My point is that we may have to begin educating our tax ‘pros’, or make sure they are truly versed in this new phenomenon.
Short-term capital gains are always taxed heavier. Here’s a quote from a Forbes article: “Investors and traders hold Bitcoin as a capital asset, so it receives capital gain and loss treatment. The AICPA and others requested further guidance from the IRS, including if investors could use Section 1031. The IRS has not yet answered in public. Forbes Aug 15, 2017”
There will be some heavy and potentially heated conversations with the tax man... Uncle Sam is definitely ready to grab his fair share of this Crypto Pie. Under-reporting of income and the IRS challenging what we would consider as ‘like-kind’ exchanges (e.g. exchanging Bitcoin for Ethereum) are just two possible points of contention.
I’d like for some of our longer tenured Crypto investors to step in with their ‘tax season’ strategies
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