Regulatory Series on Cryptocurrencies: A Glimpse on Cryptocurrency Taxation

The United States individual tax assesses seem to be perplexed as they are nearing the deadline of tax filing by April 15th, 2019, tax reporting apprehensions need to be sorted if they hold, donate, sell or transacted their cryptocurrencies in any manner during the course of 2018. Majority of the crypto investors appear to have incurred heavy losses during this timeframe.

Suppose, tax assesses hold cryptocurrency but they have neither transacted at the end of 2017 nor at the beginning of 2018, then it is deemed as no taxable event occurred to report the U.S. tax return.

Tax-reporting is mandatory only if the assesses held the cryptocurrencies in a foreign financial account and if financial thresholds were met under Foreign Bank Account Report (FBAR) and Foreign Account Tax Compliance Act (FATCA) reporting requirements, in a communication from the American Institute of Certified Public Accountants (AICPA) to the Internal Revenue Service (IRS).

While the taxation of cryptocurrencies in Canada has also been mandatory, subsequently an entrusted cryptocurrency unit was designated in 2017. While the CRA (Canada Revenue Agency), in conjunction with federal and provincial governmental authorities tracks functions pertaining to crypto-business in Canada and generate tax incentives, external agencies have also been conducive in rendering their expertise in the concerned areas.

For now, the Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada (IIROC) have collaboratively proposed a framework for cryptocurrency exchanges that hinders short selling as well as margin trading of crypto-assets. 

The Japanese government, back in October, insinuated its intentions to ease the taxation procedures in crypto investments to abstain from unviable and irrational taxation frameworks from destructively upsetting the domestic market.

Ernst & Young, very recently, came up with an accounting and auditing tool meant especially for accounting and preparing taxes on cryptocurrency holdings. EY introduced a new tool in the name of CAAT (Crypto-Asset Accounting and Tax) which enables both institutional and retail investors to compute and prepare taxes exclusively on cryptocurrency holdings.

Currency Strength Index: FxWirePro's hourly BTC spot index is flashing at 48 levels (which is mildly bullish), while hourly USD spot index was at 5 (neutral) while articulating at (11:04 GMT). 

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex