American investors who hoped to avoid paying taxes on profits earned while trading aldolase, a nasty surprise awaits. Specifically to American users not used to this method, the US internal revenue service (IRS) was invented by new regulatory measures.
Trade aldolase is not equivalent exchange
Until recently, an experienced accountant or attorney on tax matters could claim that the sale of bitcoin for another cryptocurrency is not subject to taxation. However, the us authorities made every effort to close this loophole. The last bill on taxes contains explanations that make it impossible used a strategy of tax evasion.
In fact, the situation is not to blame anyone other than myself and the IRS – because the problem arose after the IRS has classified bitcoin as property. According to Section 1031 of U.S. Tax law, this classification turned exchange transactions of cryptocurrencies for cryptocurrencies in «equivalent exchange». However, the new bill makes it «equivalent exchange» is only applicable to real estate transactions. In other words, this means that if you sell a bitcoin, for example, Tether (USDT), it will be a taxable event.
«Some people think so: «I take your bitcoin, which the IRS considers it property, and exchange it for other property,» and it looks like the exchange, the corresponding section 1031,» says Evan Fox (Evan Fox), tax Manager a new York accounting Berdon, «I think this is an exaggeration».
Under the current tax law, Americans are required to report profits from trading bitcoin and independently calculate the taxes according to your tax class. The sale of an asset that has been stored less than one year are classified as short-term investment and is taxable at the rate of 10% to 39.6%. Selling bitcoins that were stored for more than one year qualifies as long-term investment and is taxed to 20%.
«If you put your money in cryptocurrencies and decide to purchase allcoin, and then monetize it and show everyone a house worth $ 2 million, the IRS is not stupid, says Fox — money doesn’t just appear out of nowhere.»
Americans should not forget that the IRS has the authority to verify the income of citizens within a few years, and the punishment may overtake them when they have forgotten that when something is not reported to the IRS on their income.
«If a few years the IRS will be able to understand what happened, and you in 2017, the earned a decent amount of money and not reported it, you will have to pay accumulated fines and interest, explains Fox, perhaps some will want to take the risk, but if you get caught, you can expect unpleasant consequences.»