{"id":404373,"date":"2019-11-14T19:00:25","date_gmt":"2019-11-14T19:00:25","guid":{"rendered":"https:\/\/wncen.com\/?p=404373"},"modified":"2024-06-11T13:34:07","modified_gmt":"2024-06-11T13:34:07","slug":"us-crypto-investors-may-need-to-consider-amending-past-tax-returns","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/us-crypto-investors-may-need-to-consider-amending-past-tax-returns\/","title":{"rendered":"US Crypto Investors May Need To Consider Amending Past Tax Returns"},"content":{"rendered":"
Tax law surrounding crypto assets is currently convoluted and confusing, even despite Congress demanding the IRS clarify the law<\/a>, and the IRS taking steps to provide more clarity<\/a> to crypto investors in the United States.<\/span><\/p>\n However, given some recent comments from an IRS official regarding like-kind exchanges, crypto investors based in the US may want to consider going back and amending their tax returns to ensure they comply with the law.<\/span><\/p>\n Ever since Facebook<\/a> unveiled its Libra<\/a> cryptocurrency, the United States government and its many branches of government office have taken notice of the young, wild-west-like crypto industry, and the assets traded within it.<\/span><\/p>\n Related Reading | Confusing U.S. Tax Laws Lead to $5 Billion In Unrealized Crypto Losses\u00a0<\/a><\/strong><\/em><\/p>\n Concerns over the disruption of the current monetary system, its use for illicit crimes<\/a> like money laundering or terrorist funding, and more, have caused the US government to crack down<\/a> on the crypto market. <\/span><\/p>\n It\u2019s also caused the IRS to suddenly take more interest in crypto assets, and have updated tax forms to include if a taxpayer owns crypto assets \u2013 to ensure they aren\u2019t missed on tax returns. <\/span>Confusion remains around uncommon aspects of the industry, such as airdrops, but the IRS has finally begun to clarify the law in important areas.<\/span><\/p>\n According to a recent statement by IRS Associate Chief Counsel Suzanne Sinno<\/a>, the office\u2019s policy regarding like-kind exchanges never applied to cryptocurrencies.<\/span><\/p>\n Wikipedia<\/a> says that a \u201clike-kind exchange\u00a0under United States tax law, also known as a 1031\u00a0exchange, is a transaction or series of transactions that allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability from the sale of the first asset.\u201d<\/span><\/p>\n Like-kind exchanges that fall under a 1031 exchange include personal property such as vehicles, or even livestock. The law, however, is clear that it doesn\u2019t include stocks, bonds, notes, or \u201cother\u00a0securities\u00a0or evidences of\u00a0indebtedness\u00a0or\u00a0interest.\u201d<\/span><\/p>\n Cryptocurrencies, according to Sinno, do not fall under the 1031 exchange tax code and would need to be reported on income taxes.<\/span><\/p>\nIRS Clarifies Law Surrounding Like-Kind Exchange<\/h2>\n
Crypto Investors Should Speak To a Tax Professional<\/h2>\n