IRS Adds Taxpayer Questions Regarding if They Own or Transact in Cryptoassets
The U. S. Internal Revenue Service (IRS) has finally decided to acknowledge cryptocurrency in its reports. Now, U. S. taxpayer's will be asked whether they hold cryptocurrencies or not when they are reporting their taxes.
This new update follows the long-awaited guidance released by the institution, which was published recently. In the update, several aspects of crypto taxes were made clear. Some of the issues that were answered included whether people had to pay taxes for airdrops and hard forks.
However, some people complained that the IRS still did not understand crypto's very well and that some of the clarification was actually too vague. Other's complained that it took five years for the tax agency to publish the guidelines and they still managed to leave some questions unanswered.
Now, a new draft of the Additional Income and Adjustments to Income section of the 1040 forms was released. The new section asks if the person, during any time of the year, received, sold, bought or exchanged any virtual currency. The question is pretty straightforward and people are only expected to answer with either yes or no.
The IRS will be expecting constructive comments on the changes, which can be sent by email during the timeframe of 30 days.
Crypto taxes are so complicated that H&R Block, an accounting firm, will be the acting intermediary for several crypto investors and provide services related to crypto gains and losses for people who don’t know what to file. It seems that companies like this will continue to prosper while the legislation is still so complex.