Understanding the Taxation of Crypto (Virtual) Currency. Do you own Crypto (Virtual) Currency? This class gives a brief introduction to virtual or cryptocurrency going back to the original white paper written by Satoshi Nakamoto. It briefly defines the concept of a wallet and blockchain and covers the original intent of Bitcoin as a peer-to-peer decentralized medium of exchange.
The class gives the IRS definition of virtual currency. It also explains how the IRS collects information about and taxes cryptocurrency transactions. Crypto flew under the IRS radar from 2009 to 2013 but no longer. In 2014, the IRS issued its first regulation explaining the taxation of virtual currency. If you own cryptocurrencies such as Bitcoin, Ripple, Ethereum, or any others, you may have a taxable event. Learn the different ways to receive cryptocurrencies and how each is taxed. Understand the way the IRS classifies cryptocurrency. You will be introduced to the IRS regulations regarding virtual currency and the three ways the IRS states that a taxpayer can receive cryptocurrency. Learn what tax reporting to expect from crypto exchanges and under what circumstances the different reporting forms will be issued. Follow along with an actual example of entering cryptocurrency transactions in tax preparation software.