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Bitcoin Taxes: IRS Issues Its First Guidance Since 2014, but Still Fails to Answer Many Questions

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    The IRS finally answers some questions about concurrency taxation, but breeds even more confusion

Cover image via news.u.today

The U.S. Internal Revenue Service (IRS) has finally released its guidance for taxing Bitcoin and other cryptocurrencies, Forbes reports. The updated revenue ruling aims to answer many common questions within the nascent industry, including the tax liabilities that pertain to cryptocurrency forks and the calculations of capital gains.  

“The IRS is committed to helping taxpayers understand their tax obligations in this emerging area,” said IRS Commissioner Chuck Rettig.

When a certain coin goes through a hard fork, its owners are supposed to pay taxes only when they receive new crypto (meaning, that it has to be recorded on a Blockchain). Otherwise, they don't have any taxable income. 

"If a hard fork is followed by an airdrop and you receive new cryptocurrency, you will have taxable income in the taxable year you receive that cryptocurrency."

The IRS has also clarified that your cost basis is the amount of USD spent to acquire cryptocurrency (that includes fees and other costs).

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However, Bitcoin Core developer James Lopp still has a lot of questions, calling the new guidance "a hot mess." Particularly, he doesn't understand how to tax the asset if it drops 90 percent in value after selling.    

As reported by U.Today, cryptocurrency investors started receiving letters from the IRS en masse back in August, but some industry insiders complained about a lack of clear answers for those who wanted to fill their taxes.  


     

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Bitcoin Price Likely to Decline to $7,800: Crypto Analyst

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    Bitcoin is to find support at $7,800 or recover to $8,300, an analyst writes, but either way ‘continuation of the ranging on either of the levels is going to occur’

Cover image via www.123rf.com

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Over the last few days, Bitcoin has been trading below the $8,500 area. At the moment, it has recovered to $8,258 after the recent slip below the $8,100 level.

Analysts have been bullish on BTC in the long run, however, the nearest BTC price movements are expected to be bearish.

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The crypto analyst @CryptoMichNL believes that there are two paths ahead of Bitcoin at the moment. If it fails to recover to $8,300, he says on his Twitter page, then the market should be ready for the flagship coin to drop and find support at the $7,800 or $7,300 levels.

Whichever way it goes, ‘continuation of the ranging on either of the levels is going to occur’.

The analyst tweeted this forecast twice with an hour pause.

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About the author

Yuri is a journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future. ‘Hodls’ cryptocurrencies. Has written for several crypto media. Currently is a news writer at U.Today.

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