June 19, 2024

US Internal Revenue Service Releases New Cryptocurrency Tax Guide

US Internal Revenue Service Releases New Cryptocurrency Tax Guide

The IRS has released long-awaited guidance that details the obligationstaxpayer 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 guide's authors focus on hard forks and airdrops. It also contains information for those using virtual currency as 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 thisBlockchain Marco Santori. He tweets that private key custodians must pay the tax. For example, if any cryptocurrency service holds private keys for both the original coins and the forks, then it will have to pay tax even if it never owned them.

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

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