Welcome to Crypto Tax Talk with your host, Jane.
Today we are discussing the recent FinCEN rules announced on January 1st, 2021. So what does this mean for crypto taxes?
The new rules require crypto exchanges and custodians to report transactions over $10,000 to FinCEN, the Financial Crimes Enforcement Network. This will go into effect on April 1st.
The new rules also require exchanges and custodians to collect and verify customer information. This will make it easier for the IRS to identify taxpayers who are not reporting their crypto transactions.
The new rules will also make it easier for the IRS to track and audit cryptocurrency transactions.
So what does this mean for crypto taxes?
It means that taxpayers should be more diligent in reporting their crypto transactions. This includes reporting on the appropriate forms and schedules, such as Form 1040 Schedule 1 or Form 8949.
It also means that taxpayers should be prepared for increased IRS audits.
Finally, it means that taxpayers should be aware of their tax liabilities and potential penalties for not reporting their crypto transactions.
In other news, Tesla recently announced that they are getting into the crypto space. They have purchased $1.5 billion in Bitcoin and plan to accept it as a form of payment for their products.
So what does this mean for crypto taxes?
It means that if you receive payment in Bitcoin or any other cryptocurrency, you must report the transaction on your taxes. The amount of the transaction should be reported as ordinary income and will be subject to the same taxes and penalties as any other income.
In conclusion, the recent FinCEN rules and Tesla’s entrance into the crypto space means that taxpayers should be more diligent in reporting their crypto transactions. Be sure to file the appropriate forms and schedules, be aware of your tax liabilities, and be prepared for increased IRS audits.
Thanks for watching Crypto Tax Talk. Until next time, happy filing!
