What is Going on with BitCoin?

[Snaggletooth]

Why does the IRS need to know if you HAVE BitCoin? If it is treated as property, there should be no tax until BitCoin is sold.

We can buy 100 shares of Ford Motor Company, General Mills, or 50 acres of land, and we don't have to report it to the IRS until we SELL it.

What is the difference with BitCoin? I didn't have any customers tell me they had any when I asked them.

[ATSMAN]

It is just the tip of the iceberg!

IRS is ‘setting the trap’ for bitcoin and virtual currency investors on 2020 tax form

https://money.yahoo.com/irs-bitcoin-and-virtual-currency-tax-form-193503386.html

https://www.irs.gov/individuals/inte...y-transactions

[Rapid Robert]

Why does the IRS need to know if you HAVE BitCoin?
We can buy 100 shares of Ford Motor Company, General Mills, or 50 acres of land, and we don't have to report it to the IRS until we SELL it.

They don't need to know if you are simply holding it, and they have said so in their FAQ. What they need to know is if you acquired it in a taxable transaction. It has been recently documented in this forum the many ways that crypto can be acquired other than buying it.

Or, to put it more simply, what if your employer compensates you with 100 shares of Ford or General Mills? Do you agree that needs to be reported to the IRS before you sell it?

From the article linked by ATSMAN:

"“If you acquire the virtual currency and haven’t spent it or exchanged it out for other currency, you don’t have a triggering event for tax purposes,” Losi said. “It’s an unrealized gain.”"

That is a false statement, for obvious reasons.

[RWG1950]

I'm no economist, but think we'll probably will see more regulation of blockchain in the future.
Governments around the world rule, to a large extent, through their banking systems and sovereign currencies.
The relative anonymity of blockchain might prove problematic for government rule as we know it.
They are not likely to cede this authority willingly.

[Rapid Robert]

Latest news today:

U.S. Treasury calls for stricter cryptocurrency compliance with IRS, says they pose tax evasion risk
https://www.cnbc.com/2021/05/20/us-t...-with-irs.html

It is just a proposal for now, part of a much broader plan to increase both voluntary compliance and enforcement to cut down on the tax gap.

Another very recent article on crypto and the IRS from the Wall Street Journal (non-paywall version)

https://archive.is/wWgqP