The US Tax Service publishes guidance for cryptocurrency owners

0
  • The new rules define how to calculated the basis and what is considered a taxable event.
  • Income from forks and airdrops is considered to be the most contradictory part of the document.

The US Income Revenue Service (IRS) has released guidance for tax payers, The office explained how to treat cryptocurrencies for the purpose of paying taxes, and what are the consequences if they are not treated properly. 

Basically, the taxpayers received clear guidance on how they should determine the basis for purchased or otherwise received cryptocurrency. The basis is considered an amount an individual paid for the coins, whether they purchased it from cryptocurrency exchange or via P2P transaction.

“Section 1011 of the Code provides that a taxpayer’s adjusted basis for determining the gain or loss from the sale or exchange of property is the cost or other basis determined under § 1012 of the Code, adjusted to the extent provided under § 1016 of the Code,” the document says. 

Apart from that, the authority elaborated on issues related to forks and airdrops. According to the publication, any hard fork with new coins will trigger an income event for a taxpayer as soon as new coins are credited to their accounts and are made available for selling and purchasing. 

To put it simply, anyone who foes the claim may create tax obligations for coin users. The same is applied to airdrops and implies that a person does not have control over these events and maybe even unaware of them.

Actually, IRS answers raise even more questions as it is not always easy to define ownership. Also, according to IRS, a hard fork or airdrop is not an income event for those who store their coins at an exchange unless the exchange supports the new chain and credits their account.

Get the 5 most predictable currency pairs

About Author