Bitcoin multiplied more than 13 times last year, and the entire cryptocurrency market gained well over $500 billion in paper value. As a result, U.S. households likely
owe $25 billion in capital gains taxes for their digital currency holdings, reported by
FuninUSA.
The IRS views bitcoin as property, and transactions using the cryptocurrency — whether to buy goods online or trade for another coin — are generally subject to
capital gains tax. (Noting that if an investor is still holding onto cryptocurrencies bought last year, no taxes are owed)
With just a few days to the U.S. tax filing deadline, still only a tiny fraction of Americans have reported their cryptocurrency holdings, according to Credit Karma, and if the most recent 250,000 filers on the Credit Karma Tax platform,
fewer than 100 people reported capital gains on their cryptocurrency investmentsThe perceived complexities of reporting cryptocurrency gains may push lots of filers to wait until the very last minute. But Jagjit Chawla, general manager of Credit Karma Tax, said the reporting process was not so complex as it may seem at the first glance and that Credit Karma Tax has a number of resources about how to approach bitcoin and taxes. (recommend bitcoin forum in
FuninUSA for updated news and data about cryptocurrency)
Elizabeth Crouse, a Seattle-based partner at law firm K&L Gates, guessed that there were probably a lot of underreporting. She also took the view that
most of the people in the cryptocurrency world tend to have a pretty high risk tolerance, which means they're likely more willing to risk the chance the IRS comes knocking.
