IRS to Face Record Number of Loss Claims, Says Crypto Accounting Firm

Latest
This post was originally published on this site

IRS to Face Record Number of Loss Claims, Says Crypto Accounting FirmNode40, a developer of bitcoin tax-reporting software, expects the U.S. Internal Revenue Service (IRS) to receive a record number of cryptocurrency-related tax return claims this year, as it predicts that many investors will decide to declare their losses.

Also Read: G20 Leaders Declare Commitment to Regulate Crypto Assets

Pros and Cons of Reporting

IRS to Face Record Number of Loss Claims, Says Crypto Accounting FirmCryptocurrency traders hit by considerable price declines in 2018 now have a strong incentive to report their activities to the authorities, in order to offset their losses against other tax liabilities. However, Node40 warns that doing so could have long-term consequences for investors. For example, if an individual reports particularly high losses, they may be questioned about where the money came from to begin with.

“It is clear that, with the huge falls in cryptocurrency markets during 2018, many people will be weighing up whether this is a good opportunity to reveal the losses they have suffered,” said Perry Woodin, co-founder of Node40. “Having not reported their crypto activity up to now though, those choosing to reveal losses this year will need to report their crypto positions every year from now on, giving the tax authorities much better visibility of people’s crypto involvement.”

What You Need to Know

IRS to Face Record Number of Loss Claims, Says Crypto Accounting FirmReporting taxes based on inaccurate calculations in the U.S. could result in penalties of up to 40 percent and tax courts often place the burden of proof on the individual rather than on the IRS. So it’s important that people who choose to report this year have written records of all transactions they took part in, including accurate gains or losses, as well as proper cost basis assignments. If you use accounting software to generate these documents, make sure that it can recover historical trade activity from all the exchanges and wallets you have ever used.

“There is a lot for individuals to consider when it comes to crypto accounting and their tax returns,” said Sean Ryan, co-founder of Node40. “For example, ‘hodlers’ will have a completely different set of circumstances to traders, while those receiving crypto from forks and then selling will also have a unique situation to deal with.”

Is reporting crypto losses worth the risk? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.

The post IRS to Face Record Number of Loss Claims, Says Crypto Accounting Firm appeared first on Bitcoin News.

No Comments

Leave a Reply

Latest
Report: Indian Government Panel Submits Crypto Recommendations

This post was originally published on this siteThe Indian government panel appointed to recommend cryptocurrency measures has reportedly submitted its report to the country’s finance minister, suggesting a new legal framework for cryptocurrencies. The actual content of the report has yet to be announced publicly. Industry participants weigh in on …

Latest
Hodler’s Digest, Dec. 3-Dec.9: US SEC Delays BTC ETF Decision Again, While Nasdaq Confirms 2019 BTC Futures Launch

This post was originally published on this siteIn this week’s Hodler’s Digest, Justin Sun promises to “rescue” EOS and ETH developers, while the SEC again delays the BTC ETF decision Related

Latest
Federal Agents Told This Silk Road Moderator to Fake His Own Death

This post was originally published on this siteA former administrator from the now-defunct Silk Road marketplace is recounting his story in a tell-all book and movie deal. After being arrested in 2013, darknet moderator Curtis Green was involved in a bizarre conspiracy with corrupt Silk Road investigators and was later …

%d bloggers like this: