A Bitcoin Rally After Tax Day? Don’t Bet the Farm On It
There are several reasons to discount the contribution of tax-related selling to the Q1 bear market – and thus the chances of a post-April 17 rebound.
Tax pros in the cryptocurrency space are applying a hodgepodge of rules that historically have been applied to stocks, bonds and various other assets.
There is little guidance from the IRS on how to treat a token offering or SAFT for tax purposes. Determining how to do so is a fact-intensive process.
Like elsewhere in crypto taxation, the rules for funds are far from straightforward, and discrepancies may lead to non-intuitive outcomes.
Crypto holders willing to take a risk can file an extension, pay their taxes in installments with penalties and interest, and possibly come out ahead.
The ways governments tax cryptocurrency users may be unjust and due for reform, but simply ignoring the law for this reason is a dicey proposition.