Like many tax authorities, the ATO believes bitcoin and other cryptocurrencies are a form of property rather than being a true currency. Illustrations Eirian Chapman.
Cooper As cryptocurrencies continue to lure investors and make them fortunes – or not – authorities around the globe are assessing how to treat altcoins for tax purposes. One clear consensus is emerging: if you spend or invest in them, it is crucial to understand how such transactions are treated for tax purposes.
Actor Ashton Kutcher, billionaire businessman Mark Cuban, venture capitalist Tim Draper and rapper Ghostface Killah are among an eclectic and growing group of speculators and investors falling under the spell of cryptocurrencies. While some see it as a way to make a fortune, others dismiss bitcoin and cryptocurrencies (or altcoins, as they’re also known) as the latest in a line of market bubbles that date back to the infamous Dutch tulip market crash of the 1600s. In recent months, the price of bitcoin – the best known of more than 1300 cryptocurrencies – has soared and dived dramatically, raising fears about the sustainability of the market.
Benjamin Dives, chief executive of the London Block Exchange, the UK’s first dedicated cryptocurrency exchange, says altcoins offer a new asset class for investors and traders. “They’re new, they’re hot and, to the beginner, they can be awfully confusing,” he says. Such perplexity has led to tax specialists, lawyers and accountants around the world receiving an increasing number of queries about the tax implications of cryptocurrency investments.
The consensus is that if you spend or invest in them, it is crucial to understand how such transactions are treated for tax purposes. Cryptocurrencies are a form of digital asset that typically involve peer-to-peer transactions outside the central platforms of mainstream financial institutions. Read more from intheblack.com…
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