CRYPTOCURRENCIES LATES NEWS: New US tax law closes a loophole for cryptocurrency
Last week, US President Donald Trump signed one of the most controversial bills on tax reform in the United States. New laws will somehow affect the lives of almost every citizen of the United States, and crypto-currency investors are no exception. For crypto investors, new laws brought bad news for Christmas, as the authorities decided to toughen requirements for taxpayers. Unlike physical assets, investors can no longer exchange crypto-currencies to avoid taxes.
Since March 2014 bitcoin and all other digital currencies, the IRS considered as real estate - investors had to pay a tax on capital gains on them. But this tax was paid only when exchanging cryptocurrency for fiat.
Citizens who hold coins for less than a year need to pay a regular income tax in the amount of 10 to 37 percent, based on the level of income. If the coins are held for more than a year, you must also pay a long-term capital gains tax (up to 24 percent).
In order to avoid a capital gains tax, US crypto-currency investors used a loophole from section 1031 of the tax legislation relating to exchanges. This section deals with the sale of real estate to save tax on the exchange of property between the two parties.
In the new tax code, crypto-currencies are specifically excluded from use under Article 1031. From now on, crypto-investors will pay a tax for each transaction they have made.
