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The IRS (Internal Revenue  Services) of the United States announces a new update on the regulations of assets in cryptocurrencies and all associated gains. This update concerns in particular the modification of the 2022 instructions project for the tax form 1040, in anticipation of the addition of non -fungible tokens (NFT) and Stablecoins, as well as the replacement of the term “virtual currency” by ” digital active ingredients “.

Redefine the term "digital assets"

In the project which was recently published in connection with the declaration of income from individuals, the IRS said that digital assets now designated as “all digital value representations that are recorded on the account book distributed and secured by cryptography or on any other similar technology. For example, digital assets include non -fungible tokens (NFT) and all virtual currencies, such as cryptocurrencies and stablecoins.”

The questionnaire stipulates that all taxpayers must declare any type of acquisition of crypto money:

  • Reward, gain, payment of goods or services by crypto currencies.
  • Sale, exchange, donation or sale of a digital asset in all its forms.
  • Financial interest acquired in any digital asset.

Likewise, the IRS also said that it was planning to make all criminal cases linked to tax evasion public and involving crypto currency. Concretely, this means the opening of a new component in the indictment of the crypto currency industry by the agency.

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Apply the same crypto law and all other digital assets

Based on its recent experiences with cryptocurrencies, IRS believes that cryptographic transactions are not properly mentioned in income tax declarations. Among other reasons, the American authority affirms that these transactions are not affected by the third party report to the IRS. Likewise, the previous summons that have been served to other Crypto Monnaies resellers have revealed a significant sub-declaration of these transactions.

In recent months, many reports have reported the repression and the prosecution started by the tax authorities on cryptocurrency traders. The IRS also sent letters to taxpayers who may have failed to declare their income and pay the tax resulting from cryptocurrency transactions.

Since 2014, the “Opinion 2014-21” is to date the only directive that the tax service has published before sending a penalties warning to crypto currency holders who have not paid the tax on cryptographic transactions . The IRS also published more than 40 questions and answers on the tax compliance of cryptocurrencies in a new report of interest when it was completely disinterested in the evolution of this industry before.

In the end, the IRS still considers that cryptographic assets are goods rather than currencies subject to income tax, just as it mentioned in its regulatory directives published 7 years ago. This means that the American authority will continue to tax the benefits and cryptographic losses, in the same way that it will apply the same rate to capital shares and gains.

The IRS also explained how to follow the market value, gains and capital losses in the context of virtual currencies. When a transaction is facilitated by an exchange of crypto currency, the value of the taxed transaction is equivalent to the amount which has been recorded by the US dollars platform. Similarly, the price of purchase/sale of the taxpayer will determine the gain or the loss which has been recorded, as well as its duration.

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Small reminder on the functioning of crypto trading

Crypto trading is a speculation on the fluctuation in prices and the value of digital currencies. Due to their volatility, we mainly speak of price movements which can be potentially upward and downward.

The most classic way to negotiate cryptocurrencies is to use a digital portfolio. This wallet allows you to buy and sell cryptocurrencies, the value of which depends on the market rates at time T. As for the stock market, the trader can make a profit by returning to his crypto currency at a higher price than he bought it.

The other popular way to trading crypto is the CFDs (contracts for different). It is a more developed trading strategy that is mainly used by experienced investors. Negotiating cryptos as a CFD does not allow you to have an underlying asset. Instead, the trader concludes a contract with the buyer/seller to exchange the difference in value between the opening and closing of the contract.

Crypto trading is not an investment ground easy to conquer. This implies a high risk of loss and earnings comparing to other traditional financial markets. This requires specific skills and knowledge to understand, follow and analyze the market. Hence the importance of undergoing training on trading and to practice beforehand on a demo site before starting to trade with real currencies.

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