Cathie Wood, the founder and CEO of Ark Invest, is cautioning investors not to sell or transact their Bitcoin (BTC) until the United States Internal Revenue Agency, or IRS, introduces more sensible tax policies on digital assets. In a webcast hosted by Cboe, Wood said transacting with BTC could lead to massive tax liabilities. "The IRS has something to say about this, so if you have huge gains in your Bitcoin, I don't think I would bear much in the way of transactions until we get maybe some changes on the tax front,” Wood said, according to Markets Insider. Using …

Levying a progressive tax on the ultra-wealthy has been a talking point long popular with many United States Democrats, yet such a policy would have been unimaginable under a Republican administration and a split Congress. Now that the Democratic Party is back in control of both the White House and Capitol Hill, the initiative is formally on the table: On March 1, a group of Democratic lawmakers led by Sen. Elizabeth Warren introduced legislation proposing an annual tax on the households and trusts worth more than $50 million, including the value of assets such as real estate and stocks. As …

Earlier this month, antivirus pioneer John McAfee was officially charged by the United States Department of Justice on seven counts of fraud and money laundering. These charges have been filed with respect to his activities in the crypto space from 2017 to 2020. It could be some time before McAfee actually has to face these charges in court, as he is currently being detained in Spain under a different warrant issued by the U.S. Internal Revenue Service. While extradition from Spain to the United States should be easy, over the past few years the European Union has taken a much …

The United States Internal Revenue Service, or IRS, has updated its FAQ section on cryptocurrency to clarify investors who have only purchased crypto assets with fiat currency do not need to report their transactions under the "virtual currency" question. The first page of U.S. citizens’ Individual Income Tax Return form, or Form 1040, asks whether the respondent received, sold, sent, exchanged, or otherwise acquired “any financial interest in any virtual currency” during 2020. As such, the form’s wording suggests that individuals who acquired crypto assets through any means would be required to answer yes to the question, regardless of whether …

Hindsight is 20/20, but when money is on the line, being prepared can give investors better foresight. Just over a year and a half ago, Investopedia reported on the panic among many crypto investors who’d found themselves on the wrong side of the taxman. The article read, “Online forums like Reddit are abuzz with posts citing possible scenarios by worried investors about pending tax liabilities for their past dealings in cryptocoins, which may now leave them poorer.” As Bitcoin’s (BTC) price soars and investors flock to crypto to cash in, legislators and regulators around the world are taking notice. Most …

A new non-profit aiming to fund Bitcoin development education and research has been approved for special tax status, conferring benefits on donors. Brink, which launched in the fall, has been approved as a 503(c)(3) organization according to a Feb. 10 blog post. The status both exempts Brink from federal taxes and provides some interesting benefits to donors, especially considering their use of Bitcoin. Donations to 503(c)(3) organizations in the U.S. have always been an important tax write-off, but considering the long-term confusion over the IRS seemingly asking for Bitcoin users to pay capital gains taxes on any use of Bitcoin …

The taxation of cryptocurrency is no longer just a young person’s problem. That changed the day the United States Internal Revenue Service made cryptocurrency a focal point of enforcement and added a crypto disclosure question on its Form 1040. Unsuspecting parents with dependent children should be on guard. The IRS is looking for noncompliance, and crypto questions create a possibly perjurious trap. Noncompliance may be sleeping in the basements of many unwary parents. As of October 2019, nearly 40 million Americans own some form of cryptocurrency, and the average account value is over $5,000. And Google Analytics data shows that …

With just three months until the deadline for United States citizens to declare their crypto gains and losses to the Internal Revenue Service, Coinbase is partnering with portfolio tracking and tax calculating platform CoinTracker to make the process simpler. According to CoinTracker, it's an easy way for Coinbase users to report their crypto transactions and sales. Targeted at U.S. users, CoinTracker will calculate and fill out the specific forms — for example, Form 8949 and Schedule D — to declare capital gains, losses and assets on income tax returns. It can be used by individuals and accountants or as part …

United States regulators are continuing to fine-tune their tax reporting requirements for cryptocurrency users. A second draft of Form 1040 from the Internal Revenue Service for the 2020 tax season published online suggests that the agency will now require anyone who was engaged in any transaction involving cryptocurrency in 2020 will need to declare it: "If, in 2020, you engaged in any transaction involving virtual currency, check the ‘Yes’ box next to the question on virtual currency on page 1 of Form 1040 or 1040-SR." The draft guidance clarifies that transactions encompass "the receipt or transfer of virtual currency for …

A former top investigator is warning that “a high-stakes game of chicken” between the Internal Revenue Service (IRS) and cryptocurrency holders who fail to properly report their earnings will be entering a new phase in 2021 as the tax collection agency begins to focus on pursuing “civil and, potentially, criminal penalties.” In an article co-authored by Don Fort today, the former chief of the Internal Revenue Service’s (IRS) criminal investigation division said that while the agency until now has focused its resources on informing the public of proper reporting guidelines, it will now be turning to more stringent “enforcement.” “The …

This year was like no other. Now that it has limped to a close and we look at the promise of a better 2021, it is time to think about taxes. Although there were many other notable things about 2020, there were some tax points to savor — and some to fear. Gains and losses It is hard to look at crypto and 2020 without commenting on gains and losses. Bitcoin (BTC) ballooned in price, making a lot of investors happy. Of course, if you had taken short positions, you are less content. And if you were invested in XRP, …

The U.S. Securities and Exchange Commission has not been kind to crypto in the past year. In March 2020, in the SEC v. Telegram case, the Commission won a worldwide injunction against the proposed issuance of Grams by Telegram, undoing years of innovative work even in the absence of any allegations of fraud. Then, on the last day of September 2020, Judge Alvin K. Hellerstein dashed the hopes of Kik Interactive by ruling in favor of the SEC’s motion for summary judgment in SEC v. Kik Interactive, finding that Kik had sold securities when it issued its Kin crypto tokens. …