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Bitcoin and taxes: Is anyone reporting cryptocurrency trades in their 2017 returns?

Bitcoin and taxes: Is anyone reporting cryptocurrency trades in their 2017 returns?
[Photo: Christin Hume/Unsplash]

So far, it would appear not!

Credit Karma, which operates a tax-filing service, said Tuesday that out the 250,000-plus 2017 federal tax returns it has processed to date, less than 0.04% of them include any mention of a cryptocurrency transaction. And yet some surveys suggest that as many as half of Americans have made investments in bitcoin and other digital currencies over the last year.

“[G]iven the popularity of bitcoin and cryptocurrencies in 2017, we’d expect more people to be reporting,” Credit Karma Tax general manager Jagjit Chawla said in a statement.

While the need to report crypto gains may be news to many of the retail investors who have caught bitcoin fever, it has been an enforcement priority for the IRS for over a year. In November 2016, the IRS requested approximately 500,000 customer records from Coinbase, one of the most popular cryptocurrency exchanges. Coinbase has so far succeeded in reducing the scope of the request to 14,000 customer records. The case is still pending in federal court.AH