Cryptocurrency and Your Taxes

Understanding Reporting Requirements on Virtual Currency

As investing in virtual and cryptocurrencies, such as Bitcoin and Etherium, has increased in popularity, so too has the interest in regulating this strange land of newfound wealth. While the Internal Revenue Service figures out how to treat it for tax purposes, we are here to help untangle the intricacies of filing taxes as an active participant in the cryptocurrency ecosystem.

For an appointment, call Auburndale Bookkeeping & Tax Service at (863) 965-1161.

So What Needs to be Reported?

The IRS laid out how it treats virtual currency for taxation purposes in  Notice 2014-21. But what does it actually mean for your tax filing? The short answer is any activity outside of the purchase of virtual or cryptocurrency will likely have a taxable gain or loss. This includes, but is not limited to:

• Selling your position in a virtual or cryptocurrency,
• Exchanging or trading one virtual currency for another,
• Mining cryptocurrency,
• Using virtual currency as a form of payment for goods and services, and
• Hard forks generating a new virtual currency.

If you invested in virtual or cryptocurrency and are unsure of the tax implications, call (863) 965-1161 for more information and to schedule an appointment for your tax filing!