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Nov 29 - The infrastructure bill cracks down on crypto tax reporting.



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Nov 29 - The infrastructure bill cracks down on crypto tax reporting.
 

 
KEY POINTS
Cryptocurrency investors may face higher taxes as the infrastructure bill cracks down on future IRS reporting.
The $1.2 trillion deal calls for mandatory yearly tax reporting from digital currency brokers starting in January 2023.
And the measure may be a “big reality check” for investors who haven’t tracked crypto activity, financial experts say.


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Cryptocurrency investors may face higher taxes as the infrastructure bill cracks down on future IRS reporting, financial experts say.

The $1.2 trillion deal calls for mandatory yearly tax reporting from digital currency brokers starting in January 2023 to help pay for President Joe Biden’s domestic spending agenda.

The measure may bring in nearly $28 billion over a decade, according to an estimate from the congressional Joint Committee on Taxation.

While House lawmakers want to narrow the scope of which “brokers” must follow the rule, experts still expect a costly surprise for crypto investors who haven’t been tracking activity.

“A lot of these people probably have no idea what’s coming,” said enrolled agent Adam Markowitz, vice president at Howard L Markowitz PA, CPA in Leesburg, Florida.

The IRS requires investors to disclose yearly cryptocurrency activity by checking a box on their tax returns. But many filers don’t know which transactions to report.

While buying digital currency won’t prompt a tax bill, converting it to cash, trading for another coin or using it for purchases may trigger levies.

″[Crypto investors] don’t expect tax ramifications because it is outside of the traditional infrastructure of money,” Markowitz explained.

The balance due is the difference between the a*set’s original purchase price, known as cost basis, and the value upon sale or exchange, which can be tricky to a*sess.

However, the infrastructure bill will require crypto exchanges to send Form 1099-B, a federal tax document used by traditional brokerages, to report an a*set’s yearly profit or loss.

One copy goes to the IRS, and investors receive the second one to report the activity on their tax return, making it harder for dodgers to bypass the IRS.

“It’s going to be a really big reality check for people that aren’t used to reporting their crypto activity,” said Dan Herron, a San Luis Obispo, California-based certified financial planner and CPA with Elemental Wealth Advisors.

Reporting errors

While the new requirements may make it harder for investors to hide activity, it still may be difficult to calculate profits or losses for each transaction.

Exchanges currently struggle to report capital gains or losses because brokers can’t see the cost basis when a*sets move between self-custody wallets and brokers.

If investors aren’t tracking these details, they may wind up receiving a larger-than-expected bill or miss ongoing tax-planning opportunities, said John Dahlin, director of tax at IFA Taxes, a division of Index Fund Advisors in Irvine, California, ranking No. 72 on CNBC’s 2021 FA 100 list of top financial advisors.

Although many exchanges don’t provide easy-to-digest reporting, investors may use crypto tax software to compile data across platforms to estimate what they owe.

And even if investors don’t receive Form 1099-B, they are still responsible for reporting and paying their crypto tax liability, Markowitz said.

Moreover, investors must keep records “sufficient to establish the positions taken on tax returns,” according to the IRS.

Regardless of the tracking strategy, investors need to prepare for the upcoming tax season and maintain records for future transactions.

“That is really important because the requirements are only going to get more stringent,” Dahlin added.

visit this link https://www.cnbc.com/2021 .. t-to-know.html
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15 comments
 

 2 months ago '04        #2
Mr_GooD_NeWs 
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more FUD
+9   

 2 months ago '08        #3
cohs  topics gone triple plat - Number 1 spot x11
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Crackdown for some

Top 10 most slapped recently  2 months ago '11        #4
Sin  topics gone triple plat - Number 1 spot x46 OP
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 Mr_GooD_NeWs said
more FUD
I feel todays bounce is a bull trap
+2   

 2 months ago '17        #5
SPdaGOAT  topics gone triple plat - Number 1 spot x6
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Damn the jig gotta come to an end eventually
+1   

 2 months ago '07        #6
iswerve  topics gone triple plat - Number 1 spot x1
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shibaaaaaaaaaaaaaaaaaaa
+3   

 2 months ago '04        #7
Skilllz 
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Crazy how much we get taxed man but it ain’t nothing like Europe

We heading that way doe

fu*k a*s gov need they hands in all our pockets
+5   

 2 months ago '18        #8
VIMAN 
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no kyc is the first step
+6   

 2 months ago '21        #9
mr maller 
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fu*k the irs
+4   

 2 months ago '10        #10
Thegreens 
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Why that coin in the middle look like it got a fat a*s ? lol I be on bx too long.
+4   

 2 months ago '05        #11
SquirrelXss 
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Govt gonna get thier pound of flesh eventually.
+1   

 2 months ago '10        #12
Shhon  topics gone triple plat - Number 1 spot x1
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im blogging about this next week, plus web3
+2   

 2 months ago '17        #13
DavidTheMan 
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Lol, yep out of us and europe exhanges it is.

Top 10 most slapped recently  2 months ago '11        #14
Sin  topics gone triple plat - Number 1 spot x46 OP
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 SquirrelXss said
Govt gonna get thier pound of flesh eventually.
The government finally coming for their crypto money


+1   

 2 months ago '20        #15
Xiox  topics gone triple plat - Number 1 spot x1
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Is the $600 reporting to the IRS in or out & is the IRS still gonna get $78 billion ?

 2 months ago '20        #16
Likeaboss38732  topics gone triple plat - Number 1 spot x2
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Go decentralized... donate to nonprofit organizations. I just set it up so my nonprofit organization can receive crypto donations... This the future!



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