A Call for Definitive Taxing Structure of Cryptocurrencies

In 2014, the IRS implemented guidelines on how cryptocurrencies should be taxed, but the government did not declare it an actual currency.

Even though the industry has grown exponentially since 2014, the IRS has not issued any new regulations. This has prompted the AICPA to request that the agency “release additional, much needed, guidance on virtual currency.”

According to CNBC, Tyson Cross, a U.S.-based tax attorney, began assisting clients with declaring their digital currencies as early as 2013.

Cross suggests that crypto holders try to preempt any tax-related issues by taking a few preventative measures:

  • Establish a record-keeping process. Capital gains tax should be implemented for every crypto transaction.
  • Regularly download your transaction history. This includes keeping a separate record of these transactions as a backup.
  • Determine your gains and losses after every transaction. Virtual currencies held for less than 12 months are seen as a short-term gain, while those held for longer are seen as a long-term gain.