With Trump elected as the 47th President of the United States and the price of Bitcoin skyrocketing, what impact will it have on cryptocurrency investors and their tax obligations? Yahoo Finance interviewed tax lawyer and certified public accountant Andrew Gordon for his views. He believes that we need to look at the next policy direction of the U.S. government and Trump and make suggestions.
The U.S. IRS defines Bitcoin as Digital Assets, a type of Property, rather than Currency. To declare digital assets is similar to declaring stocks, and investors need to proactively declare them themselves. Digital assets identified by the IRS are any on-chain assets recorded in a blockchain distributed ledger, including cryptocurrencies, stablecoins, NFTs, etc., that are stored, sold, held, transferred, or traded electronically.
The taxable definition of a digital asset is any asset recorded on a decentralized ledger (blockchain) and the value represented by any technical numerical value.
Gordon noted that investors only need to file a tax return on the gains they generate when selling or trading cryptocurrencies. However, there are ways to reduce taxes. One strategy is to offset the gains generated by Bitcoin from losses in other cryptocurrency investments. He also recommends holding cryptocurrencies for the long term, because holding cryptocurrencies for more than a year, like As with stocks, you can offset gains from losses and claim taxes on the lower price from the difference between the original price and the price at which it was later sold.
As investors' income increases, the tax rate will also increase. Using tax minimization strategies can reduce the amount of tax reported and reduce the burden.
In July this year, U.S. Republican Senator Cynthia Lummis of Wyoming proposed the Bitcoin Act, advocating that the United States should reserve and hold Bitcoin and secure networks to maintain the financial balance of the United States and ensure that Bitcoin investors independent trial rights. The bill is still in the proposal stage. After Trump takes office, clearer definitions and regulations on how to save taxes and file tax returns after investing in Bitcoin will be released before investors can have a clearer direction for financial planning.
This article US tax lawyer’s opinion: How should Bitcoin investors file taxes if Trump wins the election? First appeared in Chain News ABMedia.
