U.S. Residents Won’t Need to Mention their Bitcoins in Tax Declarations
U.S. residents won’t have to declare their crypto assets on the first page of their tax declaration if they use Buy&Hold strategy. The IRS informed the taxpayers about it in their FAQ on their official website.
Last year, the IRS published a project of the declaration where they ask a taxpayer about their interactions with virtual assets. This raised more than a few eyebrows in the crypto community. The requirement for this information was labeled as an intrusion into a personal life of the taxpayers.
Some tax management specialists considered that this requirement needs to be clarified. Only in early 2021, the explanation was finally given. The IRS explained that it didn’t concern purchasing crypto to hold it. Only trading requires the declaration of profit or loss. Earlier, the IRS sent letters to all the crypto holders with the demand to pay off their big debts to the state.