With the entry into force of the 2023 tax rules requiring reporting of cryptocurrency transactions worth more than $10,000 in the US, consumers must report sales and purchases of Bitcoin (BTC) and investments in altcoins in 2021 to the IRS. Today is the last day of filing a tax return.
Bitcoin and Altcoin Investors Must File Tax Returns
As we reported on Somanews, last year, US President Joe Biden introduced a new tax infrastructure law that requires consumers to report transactions worth more than $10,000 in crypto assets or NFT. The bill will come into force in 2023. Before the deadline for paying taxes on April 18, consumers will have to declare their cryptocurrency assets, despite the resolution of 2023. For those who have not yet applied, the IRS has published a revised tax form at the top of the first page, which indicates whether an individual owns cryptocurrency.
According to a recent CNBC report, any cryptocurrency that generates capital gains as a result of a profitable sale, cryptocurrency trading, or purchase for NFT can be considered a “taxable event.” Profit or loss refers to the difference between the purchase price (basis) and the value that an individual receives when selling or trading.
Will the market suffer?
Thus, these tax rates will vary depending on how long a person has owned a cryptocurrency. Depending on the taxable income, an individual may qualify for long-term capital gains rates of 0-15 percent for digital assets held for more than one year. Otherwise, short-term earnings may face the usual tax rates of up to 37 percent. Due to the limited reporting of many cryptocurrency exchanges, the calculation of the cryptocurrency tax may not be so simple.
How prices will be affected on tax day is also one of the questions to be asked. Dan Morehead, CEO of Pantera Capital, said in a statement released in recent months that prices may be lowered as investors will sell more to cover their tax payments. Now time will tell how cryptocurrencies will move after the tax day passes.
