The IRS is Eyeing Crypto

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You're planning in on trying to cash some of your casino. I should say some of your bitcoin and trying to pocket. The gains will be prepared for a potential tax it. If you've owned or used bitcoin you may owe taxes no matter how you acquired used it. Cbc senior personal finance correspondent. Sharon edison is here now with more on what you need to know. Sharon hi andrew. Will you know if you bought or sold. Bitcoin or any crypto currency this year. The irs wants to know about it. It now asked this white on the first page of your ten forty federal income tax. Return at any time during twenty twenty. Did you receive sell send exchange or otherwise acquire any financial interest in any virtual currency. And you have to answer yes or no now you need to check. Yes if you involved. In any transaction with the crypto currency including selling it receiving it transferring it for free exchanging it for goods or services or other property including another virtual currency and like stocks any gain or loss from the sale or exchange of crypto currency is taxed as a capital gain or loss. So it's very important to keep good records of your transactions now. You're gonna find out a lot more about bitcoin and your taxes at cbc dot com slash smart tax planning andrew. So couple of questions consequences if you don't check the right box on your taxes. Turn either you're dodging purposely. Or maybe just don't know well you need to know you mean to make sure that you understand how this works and working with tax professional is key here because if you've made a transaction and you do not check that yes box that tax experts that we've spoken to say that you could be accused of tax evasion by the irs. There could be criminal consequences so this is a very serious consideration that you have to make right there at the top of the ten forty four. You can't miss the question. But you must answer truthfully is because there could be significant consequences. If you don't sharon just real quick our places like coin base and other institutions are they reporting your gains and losses as well to match. I'm so glad you asked that because like a brokerage firm will report. You know what you've done with your stock transactions your other transactions. This does not happen. At many of the exchange this does not happen with crypto currency. Usually so it's very important for you to keep very good records on your own and to make sure that you understand how to keep those records having cpa and enrolled agent some tax professional who has worked with quipped crypto currencies. His work with tax payers. Who are dealing with. This is very important so ask that question as you pick the right professional work with his sharon. I get the idea of having report if you've bought or sold crypto currency. But the idea of if you've used it for any transaction could get really complicated especially as more and more vendors are accepting it as a as a form of payment if you let's say you rented an airbnb on something using it. Let's say you bought a cup of coffee somewhere you've got to report. Every of those transactions that can be incredibly complicated. It says it says any so i know that but of course it is difficult to keep all of those records and all of those documents the issue is that people want reporting anything and i think the irs has been really looking to crack down on this looking at the millions of people who own bitcoin right now own cryptocurrency and. How just several hundred. Some years over the past few years have been reporting every year. so they're missing a lot of people and they just wanna make sure. I think that they're getting the accurate numbers of who has who owns bitcoin. Who's using it and how reporting it sharing this just just thinking about all the ramifications because early adopters. They may be smart enough to have their own little wallet where they don't even use a coin base and that may part of the appeal of bitcoin. I think is that it's so anonymous. Some people and we've seen historically what it's been used for so it has that You know the impression that that that it gives. But i would think anybody that buys on coin base or coin. Base is not going to be able to say. Oh no we're not going to provide anything coming. Base is going to have to generate if you answered. Do they generate like something to the irs. Right now about the people that they're dealing with or will they not a standard form life at ten ninety nine form. There's not a staredown. Four for crypto currency. So you may have a some institutions may have some type of form or paperwork that they deal with the irs. But there's no standard standard ten ninety nine like you get with the brokerage firm from what's coming telling. The market cap now is for bitcoin and for other cryptos that that's going to. That's that's gotta be near term for for the exchanges. I would think if you can't you know it's like a wild. Wild west only lasted for so long right exactly and that's again that's that's evidenced by the fact that it's not on the schedule anymore. It's not tucked away somewhere in tax documents where you have to report. This is right at the top on the first page of your ten forty form. So you're absolutely right. Things are definitely changing. Okay all right. Sharon thank you. I appreciate that thanks. People say that's why it was invented. We'll see when when the when the rubber meets the road. Whether everyone you know going to be it'd be interesting to watch Better better hire more. Irs agents. I think

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