We currently lack the guidance from the IRS to determine the exact tax treatment of this type of transaction, but the conservative treatment is to report the full value of the new asset as income reported on line 21 “Other Income".
Articles in this section
- Will you file my taxes for me?
- Where do I report the gain or loss on my tax return?
- How does the IRS view the exchange of virtual currency?
- What’s the rate at which my Virtual Currency gains will be taxed?
- What is the difference between FIFO and LIFO and why does it change my taxable income?
- I bought Virtual Currency but have yet to sell. Do I owe taxes on my holdings?
- When I buy Bitcoin and exchange it for Alt Coins – is that a like kind exchange?
- What are the types of transactions that will result in having to report income from virtual currency on my tax return?
- If I traded on an exchange for another currency, virtual or FIAT, and the funds stayed within the exchange, do I owe taxes?
- If I hold cryptocurrency on an exchange like Binance or Cryptopia, does that mean I have a foreign bank account?
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