US Cryptocurrency Tax Liabilities Estimated At $25 Billion After 2017 Mania

- Advertisement -

After cryptocurrencies hit record highs in 2017, US investors will be on the hook for approximately $25 billion worth of cryptocurrency-related taxes, according to Fundstrat Global Advisers.

On April 5, 2018, Fundstrat Global Advisers published a research note, which estimated cryptocurrency-related US tax liabilities at $25 billion. That is based on approximately $92 billion of taxable gains for US cryptocurrency investors, who, according to Fundstrat, comprise around 30 percent of cryptocurrency investors worldwide.

Globally, the cryptocurrency market grew from about $19 billion at the start of January 2017 to more than $500 billion at the end of December 2017, according to data from CoinMarketCap.

Historical Snapshot January 1, 2017
Source
Historical Snapshot December 31, 2017
Historical Snapshot December 31, 2017
Source

As reported by Reuters, Fundstrat projected that the bitcoin price will rise after the tax deadline, which is April 17, 2018. The research firm believes that prices may be held down by “selling pressures” related to capital gains tax requirements. Fundstrat also highlighted potential tax liabilities for cryptocurrency exchanges, many of which have posted billion-dollar-plus incomes.

Last month, the Internal Revenue Service (IRS) published a reminder to taxpayers to report any cryptocurrency gains on their 2017 returns. “Taxpayers who do not properly report the income tax consequences of virtual currency transactions can be audited for those transactions and, when appropriate, can be liable for penalties and interest,” the agency warned.

Readers may remember that in February, cryptocurrency exchange Coinbase sent notifications to approximately 13,000 of its customers, disclosing that the company was required to produce information on their accounts after a court ruling on an IRS summons.

- Advertisement -

Although the IRS has hired blockchain compliance firm Chainalysis, there remain countless complex issues around the tax treatment of cryptocurrencies. For instance, this past month, the American Bar Association offered guidance to the tax agency on rules around forked tokens (e.g., bitcoin versus bitcoin cash).

ETHNews previously reported on President Trump’s nomination of Charles P. Rettig as IRS Commissioner. Shortly after Rettig’s nomination, the firm that he worked for in Beverly Hills hosted a webinar on tax issues related to cryptocurrencies.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles. Matthew is a full-time staff writer for ETHNews.

- Advertisement -

Like what you read? Follow us on X @Bitnewsbot to receive the latest taxes, IRS or other Ethereum business and finance news.



Previous Articles:

- Advertisement -

Latest

Uniswap (UNI) Rebounds Above $6 After Brief Uptrend Breakdown

Uniswap's UNI token dropped below its key uptrend line following a failed hold above the $6.00 support level.High trading volumes accompanied the decline, including...

Michael Saylor Invites Joe Rogan to Discuss Bitcoin on Podcast

Michael Saylor has shown interest in discussing Bitcoin on The Joe Rogan Experience podcast.The idea has generated excitement in the Bitcoin community, with some...

Congress Debates Stablecoin Bill Amid Rising Bank and Crypto Tensions

U.S. lawmakers are moving forward with the Senate Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, with debates set to resume after...

American Engineer Drugged, Robbed in Sophisticated London Crypto Heist

An American software engineer lost approximately $123,000 in cryptocurrency after being drugged and robbed in London.The victim was targeted by an impersonator posing as...

Max Keiser Doubts New Bitcoin Treasuries’ Discipline in Bear Market

Bitcoin-focused companies are increasingly copying the treasury strategy used by Michael Saylor's Strategy.Max Keiser raised doubts about whether these newer companies can maintain commitment...

Must Read

A Beginner’s Guide To Cryptocurrency Mining

Cryptocurrency is considered one of the most popular forms of financial assets today. Many of these digital assets operate within blockchain technology which works...