CryptoTaxPrep.com Presents: Here’s Why Every Cryptocurrency Investor Needs A Tax Professional


– [Presenter] Every
cryptocurrency investor needs a tax professional. Here’s why. The digital age is upon us, and many of us now turn
to software and apps to help us manage our finances. In this increasing DIY world, many people make the mistake of not consulting with
the tax professional when setting up or
managing their investments. As advanced as it gets, technology can never replace human innovation and creativity. Unlike your Excel spreadsheet, accountants aren’t just crunching numbers, rather, they work with you to strategize, giving you expert advice in
the all too complex world of tax planning. Happy Tax offers tax advice
and planning services, specifically focused on the needs of cryptocurrency investors. Happy Tax employs the most
skilled and experienced certified public accountants, CPA, to prepare your tax returns in the way that minimizes the tax exposure of your virtual currency wallet. Cryptocurrency tax rules
are currently unclear. Bitcoin and other cryptocurrencies have shaken up financial markets. Virtual currencies exploded onto the mainstream
investment scene in 2017. An interest in this
exciting new investment shows no signs of slowing. Until recently, many virtual
currency transactions have gone on untaxed. This is because many investors believe they are covered by
the Like-Kind Exchange Rule found in Section 1031 of
the Internal Revenue Code. So, as they argue, buying
Ether using Bitcoin or swapping Litecoin for Bitcoin cash is a like kind transaction that benefits from this loophole. While some may benefit in the short term from avoiding tax liability on the like-kind exemption theory. This is a dangerous game to play. The Internal Revenue Service is still clarifying the details of how the agency will apply
the tax code to cryptocurrency. However, one thing is clear. The IRS is definitely looking for its cut on your virtual currency investments. Federal tax reform impacts
cryptocurrency investors. Cryptocurrency investors
have enjoyed a limited regulatory environment. However, as Bitcoin and
other virtual currencies become more and more mainstream, regulators are cracking down. Tax liability for virtual
currency investments is still a bit of a gray area, but new laws and policies are
sketching out the boundaries. The major tax reform passed by congress in the last days of 2017 has squashed the argument that virtual currency transactions are exempt from taxation
under the Like-Kind Exemption. Specifically, the new tax law changes the way the Internal Revenue Code defines assets that are
eligible for the exemption. Once the law goes into effect, the in-kind exemption can only be applied to real estate transactions,
not cryptocurrency investments. This makes one thing very clear. Cryptocurrency investors all have tax liability. Unfortunately, however, many of us simply don’t know how to manage it. Why do I need a tax professional to help me manage my
cryptocurrency investments. Tax rules are complicated and they aren’t getting any simpler. Many cryptocurrency investors are simply unaware of the potential legal and financial liability they can face if they don’t manage
their portfolios properly. According to a recent investigation by the Internal Revenue Service, only about 800 of over
14,000 cryptocurrency holders on popular digital
currency exchange Coinbase properly reported their assets in 2015. This isn’t just a legal
problem for Coinbase. It’s a legal problem for
anyone who has an account on the popular exchange. The IRS has issued guidance regarding tax treatment
of cryptocurrencies, but it has not yet decided
everything it needs to. For example, the agency has been silent on whether virtual currency investments qualify under the Like-Kind Exemption found in Internal Revenue
Code section 1031. If the agency decides that
cryptocurrency transactions should not benefit from the
like-kind exchange loophole, it may decide to go after more and more virtual currency users. IRS ramps up enforcement on crypto taxes. Cryptocurrency investors are facing a challenging tax climate. Virtual currency users are dealing with the same uncertainty
regarding federal tax reform as all of the rest of us. However, they’re also facing
increasing tax liability through IRS regulations
specific to cryptocurrencies. The IRS recently files suit in federal court against Coinbase. And it appears as if the
regulators are winning. Coinbase was just ordered
by a federal judge to give the agency user data on anyone who transacted more than $20,000 worth of virtual currencies between 2013 and 2015. Unfortunately, for
virtual currency holders, this is just one of many recent events showing the IRS has been serious about collecting its dues on
cryptocurrency investments. The IRS believes there is massive under reporting of
cryptocurrency income going on, and they’re not happy about it. The agency may go after investors who made money on cryptocurrency exchanges as far back as 2013. Despite the fact that many
virtual currency investors relied in good faith on the
Like-Kind Exchange Exemption until the law was changed
at the end of this year, the IRS may decide that cryptocurrencies don’t qualify under the rule. What can Happy Tax do for me? When selecting a tax professional, it’s important to consider credentials. Every Happy Tax customer works with a licensed
certified public accountant. Not just a bookkeeper or
unlicensed tax preparer. This is important because CPAs face extensive qualification, competency and ethics standards for licensing. These licensing rules
ensure that you have access to the quality of service you deserve. The CPAs at Happy Tax have worked hard to get their licensing, and they are committed to providing you with the highest quality tax advice and preparation services. In addition to recognized
professional achievement, all Happy Tax CPAs have been trained in the
rules and regulations specific to Bitcoin and
other virtual currencies. As a result, you can count on Happy Tax to get you the tax planning and preparation services you need to manage your cryptocurrency
investments effectively. At the end of the day, your investments are all
about the bottom line. Happy Tax can help you comply with the reporting and
payment requirements the IRS is starting to impose
on cryptocurrency investors. While nobody likes paying their tax bill, complying with current
and future IRS regulations regarding virtual currency
exchanges is critical. Failing to properly report and pay taxes on cryptocurrency investments can put you at odds with the IRS and possibly cause you to
end up in federal court. Happy Tax is here to make sure
you avoid the tax pitfalls in the constantly changing world of virtual currency investments.

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