In the ever-developing cryptocurrency world, everything from “bitcoinmining” to “airdrops” could add to the tax bill.
“What surprised me was the number of people that I’ve spoken with that didn’t necessarily believe that many of these trades were subject to tax,” said Michael Meisler, global blockchain leader for Ernst & Young’s tax practice. “There was a lack of understanding of some relatively basic tax principles. Calculate your relative gain and pay tax on it.”
The Internal Revenue Service views bitcoin and other cryptocurrencies as property, which means profits from any transactions are generally subject to capital gains tax.