Bitcoin

Dirty Dozen Tax Scams and How to Protect Yourself

The “Dirty Dozen” is a list of common tax scams that target taxpayers. Compiled and issued annually every year by the IRS, this year it includes many aggressive and evolving schemes related to coronavirus tax relief, including Economic Impact Payments. The criminals behind these bogus schemes view everyone as potentially easy prey and everyone should be on guard, especially vulnerable populations such as the elderly.

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Harvest Loss Taxes Loophole on Crypto

Loophole: Harvest Tax Losses on Bitcoin and other Cryptocurrency

ALERT: THE BIDEN INFRASTRUCTURE BILL INCLUDES PROVISIONS THAT INCREASE THE REPORTING REQUIREMENTS FOR CRYPTOCURRENCY TRANSACTIONS. CONTACT US FOR MORE INFORMATION

When it comes to tax losses on bitcoin and other cryptocurrencies, you’ll find in this article an escape from a tax-loss rule that does not allow you to deduct a tax loss. Yes, you read that right! The tax code has rules that don’t allow current deductions for tax losses.

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The hard facts: You will be Taxed on Cryptocurrency Hard Forks!

What is a hard fork?

A hard fork in blockchain technology is a radical change to a network’s protocol and requires all users to upgrade to the latest version of the protocol software. The change makes previously invalid blocks and transactions valid — or vice-versa.

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The IRS is interested in your Cryptocurrency activities!

No matter what your attitude or comfort level is about cryptocurrency, it has become mainstream in a relatively short time.

What has gained the keen interest of the IRS is the meteoric rise of bitcoin’s price (before its recent descent) and the increased acceptance of bitcoin and other cryptocurrencies as forms of payment. Bitcoin can now be used to buy much more than you might think.

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Tax Treatment of Virtual Currency Transactions

Whether you’ve invested in Bitcoin and sold it at a profit or loss or received it for services performed, you’ll need to report it on your tax return. Here’s what you should know:

Background

Prior to 2014, there was no IRS guidance and many people did not understand that selling virtual currency was a reportable transaction. They may have found themselves with a hefty tax bill – money they were hard-pressed to come up with at tax time. Others were unaware that they needed to report their transactions at all or failed to do so because it seemed too complicated.

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Got Crypto? New IRS Ruling Requires You to Do 3 Things

In mid-October 2019, the IRS released new rulings regarding how virtual currency is viewed in light of tax law.

The main takeaway is this: If you’ve got crypto, the IRS is keeping a close eye on you. There’s no need to panic! Here at Robert Russo CPA, we’ve put together 4 things you need to understand about taxes on cryptocurrency – and how the new October ruling impacts you.

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Reporting Virtual Currency Transactions, Bitcoin and Taxes

With the price of Bitcoin hitting record highs in 2017, many Bitcoin holders cashed out not realizing the impact it could have on their tax bill. Many people, for example, did not understand that it was a reportable transaction and found themselves with a hefty tax bill—money they may have been hard-pressed to come up with at tax time. Others may have been unaware that they needed to report their transactions at all or failed to do so because it seemed too complicated.

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