How will cryptocurrency earnings be taxed? – Fox Business

Geltrude & Company founder Dan Geltrude provides insight into how cryptocurrency is taxed.

The phenomenon of underground cryptocurrency and its economic boom is raising questions as to how, or if, earnings are taxable.

Geltrude & Company founder and CPA Dan Geltrude explained to Cavuto: Coast to Coast Thursday that if crypto earnings areconsideredcapital gains, then they must be filed as such on a tax return.

Every time you use, lets say, Bitcoin, youre actually potentially triggering a taxable transaction, he said. Because when you use that Bitcoin if youre getting value greater than what you paid, what the basis was, its like a stock. You now have a gain and its taxable. So its got to be reported.

BITCOIN HITS $60,000 IN RECORD HIGH

According to Geltrude, the Internal Revenue Service (IRS) is hot on the issue. The Fraud Enforcement Office has launched Operation Hidden Treasure in search of unreported income in the form of transactional cryptocurrency.

1040 tax return forms for 2020 now question taxpayers if they have transacted in cryptocurrencies, Geltrude added, and prompt a signature under penalty of perjury.

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For Americans who have been paid in cryptocurrency, Geltrude explained thosetransactions becomea basis as would any other form of payment.

When you got paid, its no different than getting paid by credit card or cash, so whatever profit you had in the transaction, you pay there, he said.

Now youve received the Bitcoin, now you have to track what your basis is as of that transaction. Because when you go to use the cryptocurrency, you are creating potentially another taxable event. Its going to be nuts!"

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How will cryptocurrency earnings be taxed? - Fox Business