19.04.2024

Bitcoin holders in the US are not required to declare their cryptocurrency

US residents do not need to report the purchase of cryptocurrency on the first page of the Form 1040 declaration if they adhere to the Buy Hold strategy  . This follows from the information on the updated Frequently Asked Questions page of the IRS website.

Last year, the IRS submitted a draft declaration, where the question to the taxpayer was raised in the following format:

“During 2020, did you receive, sell, send, exchange or otherwise obtain a material interest in any of the virtual currencies?”.

Then many market experts criticized the new rules.

“Asking the IRS to declare all cryptoassets is just as inappropriate as asking for all email addresses, social media accounts or service plans ,” wrote Justin Wales, co-chairman of Blockchain and Digital Currency Practice.

Some tax management specialists expressed the opinion that these rules need further clarification.

Only at the beginning of 2021, the department explained that a simple purchase of a cryptocurrency with the subsequent storage of a virtual currency does not need to be reflected in the declaration.

Data: IRS website.

According to the IRS, a taxable event occurs when a crypto asset is sold.

“When you sell virtual currency, you need to determine the capital gain or loss from the transaction ,” says the IRS website.

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