The global cryptoasset market capitalization at the time of writing is circa $2.75 trillion, and this figure is speculated to grow as cryptoassets become more widely adopted.

There has been limited guidance to date on the tax consequences of cryptoasset transactions, and many issues remain unaddressed. Many of these matters will no doubt be clarified in the future. In the meantime, for federal income tax purposes, virtual currency is not currency and is treated as property.

In order to increase information reporting, Individual 1040 Tax Returns starting in 2020 have included a question specifically asking all taxpayers if they received, sold, sent, exchanged, or otherwise acquired any financial interest in virtual currencies.

Taxpayers who have transactions in cryptoassets should anticipate and closely monitor future developments from the Treasury as they aspire to increase tax revenues by focusing on cryptoassets, and taxpayers holding these assets must take the appropriate steps to ensure they have fulfilled all their tax-compliance obligations.

Information provided on this website is for guidance purposes only and should not be construed or relied upon as formal tax, legal or financial advice.

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