Crypto traders can’t seem to escape the Internal Revenue Service (IRS) with news from the agency stating that crypto-to-crypto swaps aren’t tax-free.
So what does that mean for crypto traders? Let’s get into it below.
- As far as the IRS is concerned, crypto traders have to pay taxes whenever they exchange one type of crypto for another.
- This is due to the IRS viewing crypto, such as Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD), as property and taxes must be paid on trades.
- This has it looking at crypto the same way it would stocks or gold.
- That’s not just a change going forward, either.
- It also extends back to 2018, which means it can affect taxes from 2017.
- Normally, that would mean the IRS has three years to audit crypto traders that didn’t pay taxes on their exchanges.
- However, the agency has introduced a six-year statute of limitations.
- That will give it until 2024 to audit crypto trades as far back as 2018.
- In addition to this, the agency is able to request extensions that allow it to take longer with its audits than that six-ear period.
- That could leave crypto traders caught up in a wave of legal paperwork as the IRS looks to crack down on digital asset exchanges.
- It’s worth pointing out that the IRS’s decision means it’s taxing crypto without any fiscal currency coming into play.
- That likely won’t sit well with some traders.
- However, those that hold crypto as an investment won’t have to worry until they actually sell their crypto.
- That’s when the IRS is going to want its piece of the pie.
Investors that are looking for more crypto news are in luck!
InvestorPlace has the latest on the crypto market worth checking out. That includes altcoins to consider for June, what’s going on with Ripple (CCC:XRP-USD), as well as other cryptos to consider investing in. You can find all that info at the links below!
More Crypto News for Wednesday
- 7 Altcoins Primed for a June Rally
- Ripple Is Too Much of a Long Shot at These Prices
- 7 Little-Talked About Cryptos That May Be Sleeping Giants
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.