Credit Karma: Almost No One Is Reporting Crypto Tax Gains
Tax firm Credit Karma reported that less than 1 in 250 users reported cryptocurrency gains or losses on their tax forms.
Users of Credit Karma's tax preparation software appear to be under-reporting their cryptocurrency holdings, according to data provided by the company.
Fewer than 100 of the first 250,000 federal tax returns filed using the service reflected cryptocurrency gains or losses, the company reported. A spokesperson told CoinDesk in a statement that the "reporting of bitcoin gains [is] still at negligible levels."
Further, Credit Karma compared reporting levels from February 2018 and April 2018. Less than 100 people reported bitcoin gains or losses out of the first 250,000 users to file, or roughly 0.04 percent. The spokesperson added:
However, fully 5 percent of Americans reported owning cryptocurrencies in a survey, according to TechCrunch.
While investors may not be reporting gains, the Internal Revenue Service (IRS), the U.S. federal tax agency, considers bitcoin and other cryptocurrencies to be property. In other words, investors who sold cryptocurrency holdings in 2017 - for a gain or loss - need to report those transactions on a Form 8949.
Mining cryptocurrency is also a taxable event, whether or not the resulting holdings are sold. Hard forks resulting in new cryptocurrency holdings, such as the bitcoin cash fork, are taxable in at least some cases, but clear guidance from the IRS is lacking.
While there are questions surrounding what is taxed exactly, the uncertainty isn't due to a lack of interest. The IRS has employed Chainalysis, a startup that analyzes blockchain transactions, since 2015 to look into possible rules. The agency explains in documentation related to the contract:
Image via Shutterstock.
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