#bitcointaxes

The IRS treats cryptocurrency as taxable income 📊 Ignoring it can lead to: ⚠️ Heavy penalties ⚠️ Interest charges ⚠️ Audits or worse

But don’t panic—help is here 🙌

Resolve Federal Tax Group can guide you through tax relief options and help reduce what you owe.

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✨ Take the first step toward financial relief today!

2017 may have been the year of the crypto investor, and returns were beyond heady. But it's 2018 now, and interest in crypto remains high. It may even be more mainstream now than it was last year. Taxes are a worry of course, and they are arguably more difficult than last year. For one, it is clear that so-called 1031 tax-free exchanges can no longer be used for crypto. There any other ways to transfer crypto without triggering taxes, but there is no silver bullet. Still, there are some worth considering on the right facts. For example, how about gifts?

You can give crypto as a gift, and it doesn’t trigger income taxes. That’s right, no income tax to you as the donor, and no income tax to the recipient. Of course, when the recipient transfers or sells it, there would be income taxes then. And at that point, the donee would need to calculate gain or loss. What is his or her tax basis, since it was a gift? The tax basis is the same as it was in your hands when you made the gift.

As bitcoin adoption climbs, the IRS has gotten more and more serious about tracking down bitcoin tax evaders. The agency even filed a lawsuit earlier this year against Coinbase, demanding that the company turn over customer account information and transaction data. If you fail to correctly report your bitcoin gains on your tax return -- whether or not it was an accident -- you might be targeted by the IRS.

For federal tax purposes, virtual currency is considered property, not money. That means your bitcoin holdings are subject to capital gains taxes if you sell them, and you're required to report such a sale on your federal income tax return (whether or not you actually made a profit).

In addition, ordinary rules governing work income apply even if you receive bitcoins rather than cash for your work. For instance, if someone pays you in bitcoins for work you've done, be it making a physical product or providing a service, you'll need to report the bitcoins as income at their fair market value. You can use the price listed on an established bitcoin exchange like Coinbase at the time you received them as their fair market value. And bitcoin miners are considered to be in business for themselves, so they're required to pay self-employment tax on their earnings.