The US Cryptocurrency Landscape Is Changing – Here’s What You Need To Know

The US government has turned a keen eye to cryptocurrencies in recent years. This focus was evident last October when the Internal Revenue Service (IRS) posted its first piece of cryptocurrency tax guidance since 2014. For many, this lifted the haze, which has shrouded crypto tax for several years. For others, however, crypto tax in the US is just as foggy as ever. But what do you need to know, and how will the US cryptocurrency tax landscape shape up in the years to come?

Per the latest IRS guidance, the agency has deemed digital assets as “property for US federal tax purposes.” This not only applies to bitcoin, but also includes altcoins such as Ethereum, Litecoin, and XRP – regardless of classifications made by the security and exchange commission (SEC). In other words – much like commodities such as gold and silver, as well as stocks and real estate – capital gains and losses now apply to bitcoin and its various derivatives.

Taxable and non-taxable events

As for what triggers a taxable event, the 2019 guidance sticks to the advice offered in 2014. Taxable events include crypto-to-crypto and crypto-to-fiat trades, spending cryptocurrencies on goods and services, and earning crypto as income (including mining rewards). Each of these scenarios entails calculating the fair market USD value of the cryptocurrency at the time of the trade.

Non-taxable events fall under scenarios such as gifting cryptocurrency or merely transferring it between exchanges or digital wallets. However, it’s essential to note that buying cryptocurrency with fiat is not, in itself, a taxable event. Tax liabilities only arise once a cryptocurrency is traded, sold, or used to purchase goods and…

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