Tax day is here, and a significant number of investors have decided not to report gains from digital currency trading.
According to a recent survey from TeamBlind, an anonymous social app for tech employees, 46% of people who made money trading cryptocurrencies in 2017 will attempt to dodge the tax man.
“We surveyed more than 2,600 users who said they earned money from cryptocurrency in 2017, and we asked them if they are reporting their earnings on their taxes this year.
Nearly half said ‘No,’” according to TeamBlind.
The survey mirrors early findings from Credit Karma that found of the first 250,000 tax filings, less than 100, or 0.04%, reported any cryptocurrency gains.
The No. 1 digital currency rose by more than 1000% in 2017, making many small-time investors rich, but unbeknown to some, a 2014 ruling from the IRS meant cryptocurrencies would be taxed as property.
“For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency,” the IRS said.
While traders who dabbled in small volumes of bitcoin and other cryptocurrency may get away without disclosing gains, Coinbase users who made more than $20,000 in transactions with other Coinbase users may want to think again.
A Feb. 23 ruling meant the largest U.S.-based digital-currency exchange would hand over 13,000 users’ data to the IRS.
Tax day has been built as an important day for bitcoin enthusiasts, with some bulls arguing the reason behind the underperformance of the No. 1 digital currency is tax payments: owners are selling bitcoin to fiat to pay their taxes.