US crypto traders will face tax obligations for crypto-to-crypto transactions from 2018 onwards.
Bitcoin traders face new tax obligations in the US and Russia as authorities keen to get a piece of the action begin ‘tweaking’ laws. As Fortune and others report today, a tax reform amendment Congress passed this week will oblige crypto-to-crypto handlers to pay tax on any gains. The change in the status quo comes as a low-key change in legislation closes a loophole which previously allowed so-called “like kind exchanges” to occur tax-free.
‘Like kind’ exchanges allowed one cryptocurrency to be exchanged for another without triggering a taxable event, as long as fiat was not involved. This allowed capital gains to continue growing tax free. Now, however, that option will cease to exist in the US, applying only to real estate from 2018 onward.
In Russia meanwhile, cryptocurrency sales for fiat are attracting the attention of tax authorities, which now require taxpayers to come clean about any profits.
An anonymous holder told local media outlet Business FM about manual declaration of crypto tax liabilities:
“I don’t think it’s the right approach. More likely lawmakers should create a mechanism through which further transactions can be followed either automatically or via banks.”
Artem Tolkachev, a lawyer who works on behalf of Deloitte, reiterated that the only “possible” way of taxing cryptocurrency transactions was to apply Russia’s blanket 13% rate at the point of conversion to fiat. Fluctuating exchange rates and authorities’ bare-bones understanding of the technology added to the current stalemate in creating an alternative, he added.
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Author: William Suberg