Have you invested in Cryptocurrency? Do you understand the IRS reporting requirements? Did you know that the IRS is actively pursuing information on your cryptocurrency holdings directly from cryptocurrency exchanges? This tax law firm has developed strategies that have allowed us to successfully reduce cryptocurrency related gains while remaining in full compliance with IRS requirements.

How Does The IRS View Cryptocurrency?

The virtual currency market has appreciated significantly, causing investors to buy virtual currency for investment purposes. It operates like real coin or paper money of any country in the world, but it does not have the legal tender status in any jurisdiction. Bitcoin is the most popular example of a convertible virtual currency that can be digitally traded and used to purchase property or exchanged into US dollars, Euros, or other currency.

Cryptocurrency Tax Reporting

Other virtual currencies include Etherium, Litecoin, Ripple, Darkcoin, Altcoin, MazaCoin, Peercoin and many others. The IRS has seen numerous abuses lately, similar to taxpayers dealing with cash. The IRS is requesting information from coinbase.com and other virtual currency exchange platforms about its customers' purchase and sale of Bitcoin during the most recent three year period. The IRS is specifically requesting detailed information from the taxpayers about purchases and sales of property using the virtual currencies. This creates a complex system of accounting whereby the fair market value of the virtual currency is relevant in determining gain or loss. This tax law firm will perform an analysis to reduce the gain to the greatest extent possible based on the fair market value of the virtual currencies when it was purchased as well as when the property was acquired.

Smart Strategies For Reporting Cryptocurrency Assets To The IRS

We have been very successful in using the "property obtained or disposed of" argument in determining its value. That analysis can significantly reduce your gain. This tax law firm will determine the character of the gain or loss as either a capital asset or as an ordinary asset, as that will have significant tax benefits in the two transactions. First, the acquisition or disposition of the virtual currency itself and second, the acquisition or disposition of the property or services. We will also determine whether self-employment taxes are due based upon you receiving virtual currency in your business.

The IRS is also investigating taxpayers' compliance with information reporting requirements such as third party settlement organizations and backup withholding. We are very familiar with these reporting requirements and the penalties associated with these failure to comply. Please call me with any questions or if you've received notification from coinbase.com that the IRS is requesting your information and we will discuss your tax options in detail.

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Your free, no obligation phone consultation, directly with the tax attorney will be protected by the attorney client privilege. So it will never be repeated and the IRS cannot even force the tax attorney to disclose the information. It is also protected by the Attorney Work Product Privilege. Which means anything that is prepared by or for the tax attorney will not be disclosed and the IRS cannot force its release. Anything that you talk to the attorney about is confidential, even if you don’t hire the tax attorney. It’s still confidential and protected by the Attorney Client Privilege. The attorney is here to help you. The attorney will not tell your spouse, business partners, or anyone. All information disclosed will be kept between the attorney and client and no one else. Call to schedule your consultation today.