Tax Authorities Predict Millions of Dollars to Collect Due to the BCH Cash Fork Token Offsprings
NODE40, a crypto taxation expert estimates that tax authorities will be able to collect millions of dollars in revenue after the expected BTC cash fork. The firm has been credited with the introduction of a crypto tax reporting application known as Balance.
It recently noted that the IRS is expected to receive a windfall once the fork is completed. If last year’s fork was to be used as an indicator, the windfall this year will be massive, given the high number of people who have invested in Bitcoin tokens.
A closer look at the total number of crypto enthusiasts who offloaded their tokens last year means that this year, the IRS and other tax authorities could net as much as a hundred million dollars in a span of forty-eight hours. The assumption here is that the trade volumes will remain at similar levels.
The analysis is also based on the assumption that there will be many crypto enthusiasts looking to cash in their BTC ABC and BTC SV tokens that they will have received. It is estimated that the tokens will each hold a value of four hundred dollars. The total amount of money to be received by the IRS in the form of tax will also be dependent on the number of people who reside in the United States.
Despite the fact that there was a fork in 2017, no laws have been drafted as of now to dictate whether the launch of a new fork could lead to the introduction of a new taxable occasion. According to Sean Ryan, the NODE40 founder, any person who receives extra crypto tokens after a fork should not be compelled to pay taxes as cryptocurrencies cannot be equated to dividends that are normally traded by companies that have been publicly listed.
The crypto tax reporting software released by NODE40 is one that can easily be integrated with many exchanges. Sean, however, added that if a crypto holder was to dispose of their digital assets, it would mean that they owed the taxman tax on all the proceed accrued from the sale.
It is important to note that BCH (Bitcoin Cash) was launched after a fork that occurred in the month of August 2017. After the fork, BCH started trading at four hundred and seventy-three dollars and had a total trade volume of more than three hundred million within twenty-four hours. This is according to the figures released by Coinmarketcap.
The last few months have seen IRS being subjected to ever-increasing pressure to come up with detailed guidelines on how crypto users should report their BTC investments. The guidelines should also cover the other cryptocurrencies in use across the country. The reason behind the increased pressure is attributed to the fact that the IRS has not provided any guidelines for more than four years.
Although there are currently no tax guidelines in place, any person who benefits from a fork should be aware of their tax obligations, and ought to make sure that they have paid the taxman his dues.