Filing their taxes with the Internal Revenue Service in April, those who owned cryptocurrencies faced some serious questions: how to report gains and losses on cryptocurrencies? This confusion reflects the technology’s disruptive nature and the unwillingness of the IRS to clarify mounting questions.
Five years have passed since an IRS statement on how to apply “virtual currency” to the tax code. Cryptocurrencies were to be “property” and not a currency. Thus cryptocurrencies have been subject to capital-gains taxes, like stocks, and losses on them could be deducted to offset other gains—not that many holders have recorded or reported such details.
