FX Excursions

FX Excursions offers the chance for once-in-a-lifetime experiences in destinations around the world.

Virtual Reality

by Mark DiMichael

Nov 13, 2019

PHOTO: © NICHOLAS MOORE – DREAMSTIME.COM

November 2019

TIME IS NOT ON THE SIDE of taxpayers who failed to report their Bitcoin and other virtual currency transactions to the IRS. The IRS recently announced it is sending letters to virtual currency owners who have not reported transactions on income tax returns. By the end of August, more than 10,000 taxpayers received these letters.

The IRS refers to the letters as “educational letters,” advising the taxpayers to amend their returns. By “educating” these taxpayers, the IRS appears to be setting the table for future, more serious enforcement such as criminal prosecution, which requires intent or willfulness to evade taxes.

This is the fallout of a November 2017 legal victory for the IRS over Coinbase regarding a customer record subpoena. Coinbase was required to comply with the subpoena, but it is unknown if the IRS has successfully obtained data from other third-party exchanges as well. Additionally, the IRS has been performing blockchain data analytics with third-party vendors such as Chainalysis. As a result, the IRS amassed a large amount of data on virtual currency transactions that it is ready to put to use.

IRS Notice 2014-21 states virtual currency is to be treated as “property.” Therefore, the general tax principles for property apply to virtual currencies.

Since transactions are reported on tax returns in U.S. dollars, taxpayers are required to determine the fair market value of virtual currency as of the date of payment or receipt. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, that exchange rate can be used … but it must be applied in a “reasonable manner that is consistently applied.”

Virtual currency prices are notoriously volatile; therefore, precise data should be used to the extent that it is available and practical, such as price by the hour or price by the minute, rather than an average daily price. Minute-by- minute Bitcoin prices are available on coindesk.com by obtaining a daily pricing graph and exporting the information to a CSV file (such as a spreadsheet or database).

Additionally, certain exchanges only price virtual currencies in terms of Bitcoin, rather than in terms of U.S. dollars (for example, ETH priced at 0.0216 BTC). In those cases, a two-step conversion may be needed, first converting the transaction to Bitcoin and then converting to U.S. dollars.

Be aware regulatory agencies have not provided much guidance regarding digital asset accounting, auditing and taxes.

The content of this article is for informational purposes only. It is not intended to be a substitute for professional financial advice.
Always seek the expertise of a certified financial advisor or other qualified provider with any questions you may have regarding personal finance, investment and money-related issues.

Read This Next

Introducing

FX Excursions

FX Excursions offers the chance for once-in-a-lifetime experiences in destinations around the world.

#globility

Insta Feed
Cruising
Oct 15, 2021

Galataport Istanbul Welcomes First Ship

Galataport Istanbul, a new cruise and lifestyle destination on the Bosphorus in Istanbul, welcomed its first ship, SeaDream II, on Oct. 1. Approximately 150 passengers and crew from Bulgaria Varna arrived at 10 a.m. for a two-day homeport operation before continuing to Bulgaria Burgaz.

Greece: Destination Culture

History and culture are etched into every corner of Greece. Beginning with its language, the oldest written language still in existence, and moving from the traces of passing civilizations and religions to pre-historic findings and works from many movements, there’s a wealth of culture to discover on your next trip to Greece.

Events
Oct 14, 2021

Celebrate Halloween at a Medical Labyrinth

The countdown to Halloween weekend is on! Are you are still unsure about plans? Do you go to a house party? Stay in to hand out candy? Try something different this year and join Philadelphia’s  The Mütter Museum at its 6th annual Mischief at The Mütter.

eFlyer Reviews
Oct 13, 2021

Jackson’s Bar & Oven Review

There’s an aspirational rustic chic/farm-to-table restaurant genre often associated with Northern California’s wine country. When you drive down the main street of Napa, Sonoma or any of the other towns, it appears there are as many of them as there are vineyards. And there’s absolutely nothing wrong with this genre, as the quality of the food is consistent and ambitious chefs earnestly endeavor to elevate home-style dishes to a higher standard.

Greece: Destination Luxury

Since its prestige for attracting the world elite grew in the 1960s, Greece remains the go-to destination for glittering holidays. Each step of the journey is enrobed in luxury, from culinary traditions with the highest standard of execution and name-brand, high-end shopping to first-rate wellness locales and elite accommodations, like 5-star hotels, private villas and yachts.

eFlyer News
Oct 13, 2021

The InterContinental Mark Hopkins San Francisco Collaborates with Porsche

The InterContinental Mark Hopkins San Francisco announced a new amenity for guests in collaboration with Porsche. Porsche electric vehicle charging stations will now be located in the valet area of the hotel’s parking deck, allowing guests and visitors to top off the batteries of electric vehicles while enjoying a cocktail at Top of the Mark, enjoying farm-to-table fare at Nob Hill Club or staying overnight at the property.

Daily
Oct 13, 2021

Grenada Fall and Winter Specials

Head to the Caribbean to escape the cold fall and winter weather. Grenada hotels offer travelers numerous deals, perfect for a fall, winter or holiday getaway.

The Future of Hamad International Airport

Without a doubt, the pandemic changed the role of airports in the travel industry. Hamad International Airport’s role evolved in many ways since the pandemic hit. Now, more than ever, airports are responsible for creating a secure passenger experience. As the gateway to Qatar and the world, the safety and wellbeing of staff and passengers has always been at the core of Hamad International Airport’s strategy.

Daily
Oct 12, 2021

6 Reasons to Put Reykjavik, Iceland, on Your Travel List

It’s time to start dreaming of your next trip. Here’s some destination inspiration for you. Take a visual journey through Reykjavik with us.