Regulation in the crypto space is something extremely important because this is one of the missing ingredients for mainstream crypto adoption.
Until the crypto space is not regulated and more secure, more important names and institutional investors won’t unleash FOMO, and it will be harder to reach the primary goal of the crypto community which is mass adoption.
But it seems that there’s some good news today as crypto traders in the US will finally get some guidance on how to deal with crypto taxation.
IRS Commissioner Charles Rettig has more information on the issue.
Clarifying federal taxation policy on crypto
The agency has been recently asked to clarify federal taxation policy on digital assets.
Besides some simple and basic questions that crypto traders and investors have in regard to this issue, representative Emmer also noted that there’s a massive need for a more comprehensive approach:
“There are many other open questions about the federal taxation of virtual currencies, but we feel that there is particular urgency in resolving the ambiguity around basic questions of how taxpayers should calculate and track the basis of their virtual currency holdings. It is not reasonable to expect taxpayers to satisfactorily answer these complex questions while the IRS remains silent.”
The Daily Hodl reports that Emmer and his colleagues said that they would like to have a reply by May 15.
The official response has been made public
Rettig came with an official response on May 16.
“I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions and have made it a priority of the IRS to issue guidance.”
He also stated that the IRS has been working with “internal and external stakeholders” and is considering the issues that have been raised in Emmer’s letter.
He concluded by saying that they will publish guidance addressing the following issues soon:
- Calculating the cost basis
- Cost basis assignment
- Tax treatment of forks
You can read the complete official response.