"When crypto first gained prominence more than 15 years ago, one of the big selling points of the currency was its lack of ties to any specific government. Unlike fiat currency, cryptocurrency offered the possibility of a purely mathematical currency that was unrelated to politics, governance,"
"And since the IRS is involved, the process of reporting your crypto assets on your tax return can include the kind of tear-your-hair-out complexity that makes you want to forgo money altogether and return to the barter system. That's why we spoke to personal finance expert Robert Farrington about how to handle tax filing when you have crypto assets. Here's what we learned."
"There are several ways you can find yourself the proud owner of cryptocurrency: You might receive crypto as a payment for goods or services You might mine it yourself You might purchase it as an investment Depending on how the crypto came into your possession can affect how you report it on your taxes, and Farrington explains that this can make your taxes complex as a result."
Cryptocurrency was originally promoted as independent from governments and fiat systems. U.S. tax law requires taxpayers to report crypto earnings to the IRS, eliminating tax anonymity. Tax treatment depends on acquisition: receiving crypto as payment counts as business income and must be reported at its USD value when received. Mining rewards, purchases, and investment sales each trigger different tax events with income or capital gains implications. Accurate reporting often requires tracking acquisition dates, USD valuations at receipt, and transaction purpose. The reporting process can be administratively complex and may require professional advice or specialized tools to ensure compliance with tax rules.
Read at Fast Company
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