When it comes to Bitcoin and taxes, there is a lot of confusion. People are unsure if they need to report their Bitcoin holdings to the IRS.
The answer is yes, you do have to report Bitcoin to IRS. Here is why:.
Bitcoin is considered an asset for tax purposes. This means that any gains or losses from buying, selling, or spending Bitcoin are subject to capital gains taxes.
Just like with stocks or real estate, you need to report any gains or losses from your Bitcoin transactions on your tax return.
Failure to report Bitcoin on your taxes can result in hefty penalties. The IRS has stated that people who do not disclose their Bitcoin holdings could be subject to criminal charges. So if you have any Bitcoin, make sure to include it on your tax return!.