Let me ask, did you ever believe that the U.S. government would not lay down some crazy digital asset trading rules?
I know I’m a little late with this post but it’s tax season and this topic is important
Yes, that is the way it goes... if you have traded your money for digital currencies you need to know the new IRS tax rules, and they’re tough to comply with!
If you’re a high frequency crypto day trader, there is no easy way to say this... compliance for you is going to be a nightmare! All trades must document the dollar value when buying and selling any digital asset that has a monetary value then you will be taxed on each event.
It’s fairly obvious, this new ruling was meant to try to tame the crypto trading arena. Until this space is large enough to negotiate with regulators, we will just have to make the best of it.
For me personally, living here in the USA, I am grateful that the government did not come out with a flat out ban on crypto investing and trading and I hope that day will never come. I personally believe we are over the major hurdle of government acceptance, at least in my country, for this new digital world that we live in.
In my opinion, the U.S. government recognizes that Bitcoin and other digital currencies are real and here to stay. At this point they are trying to protect us from the fraudsters that will take advantage of the innocent masses who are flocking into this space. There is already a huge list of ponzi schemes, hyip's, fake exchanges and more that have invaded and plundered many while making off with huge sums of digital assets... aka, “real money”!
What evidence is there of U.S. government acceptance of digital assets?
Direct evidence includes Coinbase, a legal U.S. digital currency exchange. We have Bitcoin Futures trading on the Chicago Board of Trade and the Chicago Mercantile Exchange. We have the IRS recognizing the industry and regulating tax consequences.
So now, we are at a point where everyone needs to hammer out the details as we grow. It will be challenging as we may see an explosive influx of scalable decentralized applications like the concepts headed by some major crypto influencers presented by http://block.one and https://EOS.io, that appears to be at the verge of changing our lives as we know it. Stay tuned to that!
Until we are larger in numbers as a class of taxpayers who will be significant enough as a group to negotiate with, we are at the mercy of the taxing authorities and should obey their rules with the hope of more relaxed policies going forward.
New "Privacy coins" are popping up... privacy coins or not... I will pay my taxes. Tax avoidance is legal and you should look for all the write-offs you can find. However, if you defraud the IRS it is not worth it, they will win. I just hope the IRS and everyone else will be clear in their classification of digital assets and be fair in taxing them. So, what's fair? Who knows.
All I can say is that there are rumblings of many large U.S. corporations that are going to be adapting these new technologies in a very big way. The road is being paved for them and they will be arriving soon enough. When these major players are on board, we will have a stronger voice with the IRS going forward.
Be smart, pay your taxes. If you do not like the tax system in your country, you can probably leave to take citizenship in another country with less of a tax burden. If you are making a fortune it may be worth it!
Hey, Is there someone out there that would like to build an open source trading app on EOS that will streamline the IRS trade documentation requirements for investors and traders? While you are at it, tap some tax software engineers and go for a full tax app! Imagine how many users would use it if combined with daily expenditure classification and automatic input into the tax app?
Put me on your staff for the heads up on that idea...