Removal of Crypto Tax Confusion by IRS (Internal Revenue Service)

Removal of Crypto Tax Confusion by IRS (Internal Revenue Service)

There has been a long confusion regarding crypto tax system indeed. At last, U.S. Internal Revenue Service of IRS has unriddled the confusion over crypto taxing system indeed. People are asking for the best tax software to help them. There is talking regarding exchanges and promotional airdrops.

There is a question that the latest crypto tax guidance launched by IRS in 2018 but how transaction of crypto had been taxed before 2018. This happened because of tax overhaul back is December 2017 which restricts taxpayers to pay tax on the gain of a sale.

IRS is the revenue service of the United States federal government organized with the Commissioner of Internal Revenue, worked on making the latest crypto guidance. According to the new guidance taxes on like-kind exchanges of cryptocurrency cannot be deferred, even for transactions that occurred before 2018.

Confusion regarding the previous provision, section 1031, for like-kind exchanges on Dec. 31, 2017 applying only to exchanges of real property held for use in a trade or business for investment, other than real property held primarily for sale, IRS website defines. The previous law also applied to certain exchanges of personal or intangible property.

Promotional Airdrops

The terminology got introduced by the latest 2018 tax guidance by IRS referring that companies give away free coins for marketing purposes. But it has been confirmed that the revenue ruling does not apply to promotional airdrops. But no clear conception about whether this promotional airdrop will be taxable came from IRS.

The guidance says when someone receives cryptocurrency from an airdrop following a hard fork, he will have ordinary income tantamount to the fair market value of the new cryptocurrency when it is received. In this system you will have full control over cryptocurrency.

Demand for Goof Tax Software

IRS is mailing thousands of crypto users reminding them of their tax obligation and thus they are expanding tax enforcement efforts. As a result of the process, an increasing demand for good software programs has been increased. With an eye to identifying crypto evaders of other countries, they are working with the tax authorities of those countries. This tax preparation created hype among visitors in the days following the IRS guidance and enforcement announcements. To meet tax obligations, visitors are seeking for a good software program.  Cryptotracking, crypto tracking and reporting platform that helps you keep track of your profits and losses for your own records and for tax reporting, is also watching higher traffic recent days.

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