Crypto taxation is a major enforcement priority: IRS

  • The Internal Revenue Service of the United States continues to propose new tax regulations to regulate cryptocurrency investments in the United States, with the most recent notice outlining tax requirements for the marijuana sector
  • Those who utilize it [cryptocurrencies] should be aware that the IRS views it as property, and there are taxable gains. In addition, the IRS commissioner advised cannabis firms to use trustworthy cryptocurrency exchanges to convert cryptocurrencies into US dollars
  • Following suit, Democrats in the House of Representatives introduced new tax measures on Sept. 13 that would raise the tax rate on long-term capital gains

The Internal Revenue Service of the United States continues to propose new tax regulations to regulate cryptocurrency investments in the United States, with the most recent notice outlining tax requirements for the marijuana sector. The IRS Small Business/Self-Employed Division Commissioner De Lon Harris signed the letter, which highlights the federal agency’s goals for ensuring bitcoin tax compliance among local cannabis growers, distributors, and sellers. Commissioner Harris stated that the IRS’s top enforcement priority in the cannabis sector is the usage of cryptocurrency. The announcement is timed to coincide with a recent Senate proposal from July 2021 that aims to tighten taxation and reporting regulations for firms that trade in cryptocurrency. Harris claims that:

Those who utilize it [cryptocurrencies] should be aware that the IRS views it as property, and there are taxable gains. In addition, the IRS commissioner advised cannabis firms to use trustworthy cryptocurrency exchanges to convert cryptocurrencies into US dollars. The IRS has not specifically requested that firms record high-value crypto transactions. Companies will, however, be required to file Form 8300 for every transaction over $10,000. Last-minute changes to the Senate’s bipartisan infrastructure accord offered a way to collect $28 billion in cash by taxing crypto investments and transactions.

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Following suit, Democrats in the House of Representatives introduced new tax measures on Sept. 13 that would raise the tax rate on long-term capital gains. If passed, the bill will raise crypto taxes by 5% for certain high-income individuals. According to data, the law also proposes a 3.8 percent surtax on net investment income, increasing the tax rate for chosen investors to 28.8 percent. The wash-sale rule, which bans investors from deducting capital gains on cryptocurrencies and other digital assets, will also be implemented under the new tax proposal. Currently, authorities in the United States suspect crypto investors of employing wash sales to distort their portfolio’s financial gains.

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Andrew Smithhttp://thecoinrepublic.com
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing

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