Tuesday January 11, 2022 – 2021 saw a boom in cryptocurrency and other Blockchain assets (NFTs, DAOs) activity by taxpayers who never even heard of these assets before this year. If these taxpayers are not prepared, they could be facing a big tax liability AND audits by the IRS – both things to avoid.
When it comes to Cryptocurrency, the first thing to know is -Crypto is taxed as property – and, therefore, likely creates a taxable event each time it is traded, sold, or used as an exchange of value (think buying something). Because Crypto is considered property, it is imperative that the taxpayer keep good records. Untangling Cryptocurrency transactions can be a daunting exercise.
Non-Fungible Tokens create a whole list of different tax issues. NFTs are likely considered collectibles. And collectibles are treated differently depending on your income level.
Attorney Steven A. Leahy talks about the impact these new issues may have on your tax bill.
Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649
