With the entry into force of 2023 tax regulations requiring reporting of crypto transactions over $10,000 in the US, consumers are required to report sales and purchases of 2021 Bitcoin (BTC) and altcoin investments to the IRS. Today is the last day to file tax returns.
Bitcoin and altcoin investors need to file tax
As we reported on Kriptokoin.com, last year, US President Joe Biden introduced a new tax that requires consumers to report transactions over $10,000 in crypto assets or NFTs. infrastructure law. The bill will enter into force in 2023. Before the April 18 tax deadline, consumers will need to declare their crypto holdings despite the 2023 regulation. For those who haven’t filed yet, the IRS has published a revised tax form at the top of the first page stating whether the individual owns cryptocurrency.
According to a recent CNBC report, any cryptocurrency that receives a capital gain from a profitable sale, trade in cryptocurrency or buy for an NFT – all of which are “taxable” events”. Gain or loss refers to the difference between the purchase price (the basis) and the value the individual receives when selling or trading.
Will the market be affected?
These tax rates will therefore vary depending on how long the individual has owned the cryptos. Depending on taxable income, an individual may qualify for long-term capital gains rates of 0-15 percent for digital assets held for more than one year. Otherwise, short-term earners may face regular tax rates of up to 37 percent. Due to the limited reporting of many crypto exchanges, calculating the crypto tax bill may not be that easy.
One of the topics that are curious about how the prices will be affected on the tax day. Dan Morehead, CEO of Pantera Capital, claimed in a statement he published in the past months that prices may be suppressed as investors will sell more to meet their tax payments. Now, time will tell how cryptocurrencies will move after the tax day has passed.
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