IRS Increases Attention on Cryptocurrency

Many taxpayers are increasingly using virtual currencies and cryptocurrencies such as Bitcoin, Ethereum, Ripple, among others for a variety of reasons including, purchasing goods and services as well as an investment strategy for their portfolios.

With the growing popularity of virtual currency transactions and the need to ensure accurate tax reporting, the IRS has made the topic one of its compliance priorities. The Form 1040, U.S. Individual Income Tax Return, includes a question on virtual currency on the top of page one, giving a clear indication that crypto-asset reporting is top of mind for the IRS.

The IRS considers cryptocurrency as property, which can provide income tax planning opportunities if we are aware that you hold this type of asset. 

For more information on the IRS’s reporting requirements for virtual currency, please visit https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies

As this area continues to evolve and more taxpayers are impacted, Baldwin CPA’s PLLC stays up to date on these matters and we are prepared to assist you with proper reporting and accounting for cryptocurrencies. If you have any questions or need assistance, please feel free to contact us at any time.