Feds Tightening The Noose On Cryptocurrencies

One of the less publicized provisions of the 2017 Republican tax bill effectively put a tax on crypto assets, and cryptocurrency transactions are now defined as taxable events. Nor was this the first move by the federal government to get its piece of the increasingly active trade in the crypto markets: Back in 2014, an IRS notice had already detailed how taxpayers should report crytocurrency transactions. Currently, filers have to pay taxes on items purchased with cryptocurrencies “because, technically, they have converted an asset into a currency and ‘traded’ it for something else, rather than making a purchase with standard money. The trade triggers a capital gains tax.” For the IRS, enforcement remains difficult, and this article, by tax expert and consultant Clark Sells, explains why. But it also notes that despite the challenges, the IRS clearly sees crypto “as a lucrative enough source of revenue to continue to pursue regulation.” The crypto community, Sells writes, “should begin preparing now for stricter regulation.”