Beware of the Taxman
If you have been freelancing or doing any sort of trade that originally need not to be declared, then you would have found yourself conscientiously asking in a while if you are even entitled to your money. Windfalls come with, as it is, taxation. It’s a tragic affair but one that needs to be played to the letter lest you run into serious trouble. How then is Bitcoin tax treated if at all?
What worries owners – or could at least
The simple fact is cryptocurrencies may leave you out of ready cash, but not only by way of losing their value. There are other ways whereby cryptocurrencies can damage their owners. They tend to split or as it is – fork. When a fork occurs, a currency would split.
A new coin is minted that is akin to its former one, but it works in its own unique way. Even if the process is regulated, forks have been more common of late, leading to saturation of the market. Bitcoin Cash seems to be the most popular currency that has resulted from the original blockbuster – Bitcoin.
Forks are what may influence the value of cryptocurrencies as well. As aberrations occur, you may want to ask yourselves if you can really have free money without a good reason.
The plain question is that you cannot. For the most part, you are liable to taxes if you own bitcoin or other cryptocurrencies. The Internal Revenue Service (IRS) is set on delivering the desired performance.
Watch out, here the taxman comes
There is a greater issue now for owners and enthusiasts alike. As the IRS and similar regulators are warming up to the idea of taxing your proceedings you have gained from accumulating wealth this way, you may want to ask yourselves if it is really safe to own it.
Sometime a regulator such as the IRS will see the mere owning of a few titbits as reasons enough for you to pay tax. Worse, if the regulator can prove that you have owned the asset in the past but did not pay tax, then you will be open to even greater danger and you will need to pay backdate taxes.