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Unclear Tax Reporting Criteria May Dog Crypto Compliance

Law360

15 Jul 2020

Edward Froelich spoke to Law360 about how unclear tax reporting criteria may make it harder for cryptocurrency holders to accurately report liabilities to the Internal Revenue Service.

According to Edward, the 1099-K form may be a better option over 1099-B for a wallet to provide, “because it simply says this is how much you agreed to receive in value through a payment card or through a third-party network [like a cryptocurrency network], while the 1099-B does require a fair amount of work on the party issuing it.”

Edward added that all taxpayers still must understand the gain or loss on a cryptocurrency transaction in an exchange, sale, or disposition of property even if they receive a Form 1099-K by comparing it to their own records.

“[Form 1099-K] doesn’t help anyone figure out exact transactions, but when you sell something you have to presumably reconcile how much you made and what you sold,” he said. “Everyone who sells goods or services has to keep track of that.”

Read the full article.

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