Recently, governments have been had a variety of concerns related to taxes, fraud, and fiat currency’s stability when cryptocurrencies were widely associated with financial asset classes and their adoption. David Kemmerer, the co-founder of CryptoTrader.Tax, a crypto tax reporting platform, was tagged in a tweet that:
New episode is live with @David_Kemmerer!
We discuss the new tax guidance from the IRS, why it’s so complex, why cryptocurrencies are becoming more difficult to report through legacy infrastructure, and everything you need to know at end of year.
Enjoy!https://t.co/edN4Gt3bzr
— Pomp ? (@APompliano) November 15, 2019
According to citing of latest tax guidance of IRS, Kemmerer claimed that if all kinds of cryptocurrency are considered as the property, with its “transferability”, will make it become more complex. For instance, Bitcoin can be treated as a property since people tend to use it as an investment, while stable coins are designed to perform as a medium of exchange. As a result, cryptocurrency’s position as an “investment” will not be corresponding to U.S. merchants.
David Kemmerer
Additionally, the entrepreneur also said that cryptocurrency takes on so many characteristics “digital money, an investment, utility tokens”. There are so many application cases. It is a challenge when the IRS blanketly treats everything as property. However, that is how it’s handled right now.
Due to the above factors, Kemmerer suggested that the IRS should implement a De Minimis tax exemption “wherein the first $1,500 of capital gains is tax-free and users don’t need to be necessarily reporting that.”
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