Bitcoin Holders, the IRS Is Watching You
Story by: Ross Snel
Financial advisors may want to nudge clients who have bought and sold cryptocurrencies like Bitcoin to make sure they have accurately reported their capital gains to Uncle Sam.
That’s because the IRS is making it clear it will keep a closer eye on taxpayers’ crypto gains, my Barron’scolleague Avi Salzman reports.
The IRS says it started sending letters to more than 10,000 taxpayers who own virtual currencies instructing them to review their returns and amend them when necessary.
Bitcoin, the world’s first cryptocurrency, technically affords its holders anonymity, as do other digital coins. Yet many people buy them through exchanges, which often ask users to verify their identities before they can open accounts. The IRS won a court case to gain access to account information from large U.S. exchange Coinbase, although the agency did not respond to a question whether that was the source of addresses for the letters it’s been mailing.
The IRS has classified cryptos as property for tax purposes. But for holders who make frequent transactions, use cryptocurrencies to buy goods and services, or exchange one digital currency for another, calculating capital gains can prove complicated. You can find the full story on the IRS’s Bitcoin push here.
Original story: https://www.barrons.com/articles/procter-gambles-stock-jumps-as-earnings-beat-organic-growth-soars-51564492024
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