TAX CRYPTOCURRENCY LIKE STOCKS

Cryptocurrency’s worth changes sometimes on a daily basis – so taxing crypto transactions on their value at the time of the transaction has the potential to either leave citizens with a high tax bill they can’t afford if one currency crashes, or an unfairly low tax bill that’s less than their fair share if the value soars after purchase.

Currently, any time you use cryptocurrency to purchase anything, that is considered a “taxable event” by the IRS, and you’re taxed on the value of the cryptocurrency at that snapshot in time.

It makes far more sense to tax cryptocurrency transactions like stocks – only tax at the value of the cryptocurrency once capital is pulled from a cryptocurrency into a traditional currency (like USD).

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LEGISLATIVE HISTORY

IRS Notice 2014-21, I.R.B. 938
General Tax Principle Application to Cryptocurrencies