Crypto Taxes 2022: Here’s What You Need to Know According to CoinTracking

PRESS RELEASE. Crypto changes quickly, with caller taxation laws and regulations coming to respective countries successful 2022, impacting however radical request to study their crypto gains connected taxes.

New regulations successful the US are a blistery treatment taxable among crypto investors, with a measure coming to fruition severely expanding the reporting needs for crypto brokers and traders.

Beyond the accrued regulation, caller concern vehicles successful crypto besides spark doubts connected traders connected however to incorporated them into their section taxation regimes.

CoinTracking is present to screen the apical 5 crypto taxation changes to beryllium alert of successful 2022 and onward:

• More reporting for crypto brokers with the caller 1099-B requirements

The Infrastructure Investment and Jobs Act of 2021 (IIJA) of Nov. 15, 2021, requires cryptocurrency exchanges to study crypto transactions connected signifier 1099 starting successful 2023. This alteration requires crypto brokers to contented a taxation study with each the idiosyncratic trades that users conducted, including accusation specified arsenic income proceeds and costs ground for each trade.

The level of complexity for crypto brokers to comply with the measurement is immense and could origin a deficiency of reporting quality for some brokers and traders, resulting successful unfair penalties.

If you person a 1099-B with incorrect accusation from a crypto exchange, you’ll person to close it and study the existent trades you conducted and their afloat information. You’ll person to hunt for a professional taxation accountant with crypto acquisition to assistance you lick these issues.

• More crypto reporting for traders nether Section 60501 of the US taxation code

More reporting for crypto traders is coming with Section 60501, requiring radical who person much than $10,000 successful currency and equivalents successful the signifier of integer assets to record a study with the IRS.

There are 2 main challenges for traders with this enlargement successful Section 60501:

1. The trouble successful determining the Fair Market Value (in USD) of transacted crypto and however to find the $10,000.
2. Higher load and privateness penetration by having to supply further details (e.g., the transportation recipient, sanction of the parties, societal information numbers, etc.)

• DAOs and DeFi 2.0 gross summation request for crypto taxation reporting

The emergence of DeFi 2.0 with rebasing protocols similar OlympusDAO, Wonderland, and their forks crossed blockchains is giving investors much opportunities. However, earning staking rewards from these protocols increases the trouble of reporting, since you’re receiving rewards for each rebase with antithetic underlying Fair Market Values (in USD)

In the US, each clip you person those staking rewards, you person to admit their Fair Market Value (in USD) arsenic mean income. Fortunately, CoinTracking easy tracks your staking rewards from rebasing protocols to guarantee you‘re taxation compliant.

• The hunt for crypto-tax-friendly locations to currency retired profits

As crypto regularisation increases worldwide, countries with affable regulatory frameworks for crypto investors and businesses are becoming a sought-after alternative.

If you person ample unrealized gains and are looking to proceed your crypto trading journey, moving to a low-tax oregon crypto-friendly authorities whitethorn beryllium an option.

Countries similar Puerto Rico, El Salvador, Dubai, Portugal, Germany, and Singapore are immoderate of the top crypto-friendly locations worldwide.

• Metaverse and tokenization instrumentality halfway stage

Experts foretell that GameFi, the Metaverse, and tokenization (NFTs) volition spell mainstream successful 2022. In the lawsuit of a bitcoin carnivore market, rotation from the superior integer assets to emerging categories could adjacent boost that trend.

From a taxation perspective, converting integer assets (e.g., bitcoin oregon ether) for tokens successful virtual ecosystems (e.g., in-game integer assets, NFTs, Metaverse tokens) is simply a taxable lawsuit successful the US.

For example, trading bitcoin for $SAND (the Sandbox crippled token) oregon trading ether for an NFT successful immoderate marketplace is simply a crypto-to-crypto trade, a taxable lawsuit successful the US, taxable to superior gains taxes.

Determining the summation connected crypto-to-crypto trades is much difficult, and it increases the request for the usage of crypto taxation software to easy import trades, get your gains calculated according to your preferred accounting method, and taxable taxation reports.

Remember to consult with a taxation professional with acquisition successful crypto to flooded these challenges and support updated records of each of your transactions with CoinTracking.

Disclaimer: All the accusation provided supra is for informational purposes lone and should not beryllium considered arsenic nonrecreational investment, legal, oregon taxation advice. You should behaviour your ain probe oregon consult with a nonrecreational fiscal advisor erstwhile investing.

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