The following question appeared for the first time on the 2019 tax return: “At any time during the tax year, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency.” Taxpayers must indicate whether or not they engaged in virtual currency transactions by responding yes or no. The tax return will not be accepted for e-filing or filing, period, if an answer to this question is omitted.
What is virtual currency? The IRS defines virtual currency as “a digital representation of value, other than a representation of the U.S. dollar or a foreign currency (“real currency”), that functions as a unit of account, a store of value, and a medium of exchange.”
USD dollar or foreign currency is known as real currency or fiat currency. In the United States, the US dollar is backed by the US Government and is accepted as legal tender. As legal tender, the US dollar must be accepted when offered in payment of a debt. Virtual currency is not real currency or fiat currency in the United States.
Virtual currency does not have legal tender status. It is not controlled or backed by the US Government like fiat currency. Some virtual currencies are convertible, which means they have an equivalent value in real currency or function as a substitute for real currency. Virtual currency is spendable. Virtual currency is transacted through certain software applications and digital wallets. The IRS estimates that there are over 2,000 virtual currencies.
Cryptocurrency is a type of virtual currency. Cryptocurrency uses cryptography to record secure transactions digitally on a distributed ledger such as blockchain. Bitcoin, Litecoin, and Ethereum are popular types of cryptocurrency.
The use case for crypto has expanded and evolved to an eco-system since Bitcoin first launched in 2009.
Joining the conversation today is John Wingate, a crypto expert who is freeing the world with a new economic system. John is CEO at BankSocial™.
BankSocial™ is the first and only Decentralized Banking and Finance Platform, built 100% from the ground up on the Blockchain, that pays the banks members for holding tokens to fund loans. We utilize our proprietary BLOCKSCORE™ social credit scoring system and social consensus lending pool, built with the security of smart contracts, to provide Mortgage, Auto and Micro Lending to the world. BankSocial is by the people, for the people.
Website: https://www.banksocial.io
Email: [email protected]
LinkedIn: https://www.linkedin.com/company/banksocial
FB: https://bit.ly/3ffSL4K
Twitter: https://twitter.com/banksocialio
YouTube: https://youtube.com/BankSocial
IG: https://www.instagram.com/banksocial.io
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Thank you for listening.
As with any tax issue, contact your tax professional to help you navigate your own unique situation.
