January 22, 2021

US Internal Revenue Service Releases New Cryptocurrency Tax Guide

US Internal Revenue Service Releases New Cryptocurrency Tax Guide

The United States Internal Revenue Service (IRS) has released a long-awaited guide that details obligations taxpayer regarding cryptocurrencies. The new document contains information about cryptocurrency transactions and is an addition to the existing Notification 2014-21.

Thanks to more complete information, participants in the crypto space will be able to more clearly understand which operations are taxed and which are not.

The authors of the guide focus on hard forks and airdrops. It also contains information for those who use virtual currency as fixed capital.

According to IRS Commissioner Chuck Rettig, managementwill help taxpayers and tax specialists deal with the mechanism of collecting money in an ever-evolving space. Thus, the regulator intends to provide transparent reporting requirements.

The only question is how well regulators understand the concept of cryptocurrencies. The authors of the manual mix the concepts of airdrop and form, noting that both concepts are functionally interconnected.

In particular, the president drew attention to this.Blockchain Marco Santori. He writes on Twitter that custodians of private keys must pay tax. For example, if a cryptocurrency service has private keys for both original coins and forks, then it will have to pay a tax, even if it never owned them.

Meanwhile, the IRS claims that taxableThere is no income if the fork was not received during the aydrop or transferred to the account in any other way. In this case, the question arises, why should the forks participate in airdrops? And what does one concept have to do with another?

As you can see, everything is not as good as we would like. And there are still questions that I would like to get a clearer answer. The fact that the regulator makes attempts to make the industry more transparent is good, but the relationship between airdrops and forks, as well as the custodian and the client, is still confused.