IRS is back with great news for the cryptocurrency holders. While the number of people investing in crypto is rising, th worries linked to taxation and penalties are also increasing simultaneously. In the same way, the IRS has made an incredible announcement of no Tax on Crypto except for a few cases.
The Reason Behind The No Tax Crypto
Recently, Joshua and Jessica Jarret requested a refund of $3,293 in income tax paid in 2019 from the IRS in May 2021. The couple filed a legal complaint in the Middle District of Tennessee’s US District Court.
According to the news shared by the Marca, the couple staked their way to 8,876 Tezos tokens, claiming that any tokens received through proof-of-stake should be deemed “new property” generated by the taxpayer. The Jarret couple contended that the Tozen tokens should not be taxed until they are sold or traded.
The IRS has offered to reimburse the couple’s taxes on Tezos trading profits to the best. The precedent sets the stage for a discussion on defining and taxing bitcoin assets. This case has raised questions on Cryptotaxation, for which the regulations are deemed to be crucial.
Here is IRS Form 1040
The IRS form 1040 asks taxpayers if they “received, sold, exchanged, or otherwise disposed of any financial interest in any virtual currency during the previous year.”
The Internal Revenue Service is attempting to transition to cryptocurrency. Despite this, there is still some ambiguity concerning terminology and taxing them. The IRS definition contradicts a recent example in which it offered a settlement.
Cryptocurrency investors are sceptical of the new IRS regulation and its impact on their profitability.
Experts Comments On The Crypto Case Of Tax Refund
Crypto & Blockchain journalist Kamran Rosen Shared with Forbes on the case by stating, “With half of all Bitcoin owners filing taxes on their crypto for the first time this year, the decision is likely to be one of the most closely watched of the 2021 tax filing season.”
Additionally, the couples are looking forward to taking the case further in court to obtain longer-term protection. This case will be one of a kind in the cryptocurrency market.