US citizens involved in cryptocurrency transactions are now subject to new tax reporting obligations effective from December 31, 2023. These amendments require individuals to report any crypto transaction over $10,000 to the IRS within 15 days to avoid potential felony charges. Jerry Brito, executive director of Coin Center, emphasized the importance of understanding and fulfilling these tax reporting obligations.
In addition to individual responsibilities, companies holding cryptocurrencies will also be affected. The Financial Accounting Standards Board (FASB) has introduced rules requiring companies to measure crypto assets at fair value. This new measurement technique, effective from 2025, aims to provide an accurate reflection of the worth of digital currencies such as Bitcoin and Ethereum. The rules offer an option for earlier adoption by companies.
Interestingly, a report by Divly revealed that in 2022, only about 0.53% of cryptocurrency investors globally declared their crypto activities to their local tax authorities. This low compliance rate highlights the significance of the new tax rules and the increased need for awareness and compliance among crypto investors and companies.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
