From staking rewards to tax-free transactions to getting your refund in Bitcoin, this week
we’ve got all the biggest stories with everything that’s happening in the thrilling world
of paying your crypto taxes.
Stick around because it may save you some sats.
I’m Kris Merkel and this is not financial advice, this is Exodus Crypto News.
If you want to get clear guidance out of the IRS you might have to take the agency to court.
At least that’s what one couple has done in regards to their profits from staking Tezos.
Here’s the full story.
In 2019 Joshua and Jessica Jarret paid several thousand dollars in taxes even though they
never sold the Tezos that they’d earned from staking.
Two years later the couple came to the conclusion that they shouldn’t have paid taxes on their
unrealized gains, and they requested a $3,293 tax return from the IRS.
The couple’s primary argument, which sounds logical enough to us, is that stakers shouldn’t
have to pay taxes on their earnings until they sell the coins.
Surprisingly, the IRS actually seems to agree!
After six months in court the IRS has given up and offered to pay the couple the refund
that they’ve been asking for.
By offering them their money back, the IRS has tacitly admitted that the Jarrets shouldn’t
have to pay taxes on coins that they never sold.
It’s a big victory, and the Jarrets could have taken the cash and called it quits.
That’s not what they’re doing though.
Instead, the couple is going to continue with the case.
As it stands now, the IRS has admitted that the Jarrets overpaid, but that doesn’t actually
translate to a change in policy.
By keeping the pressure on the Jarrets are hoping to force the IRS to permanently update
the tax code so that stakers don’t have to pay taxes until they sell their coins.
For everyone’s sake let’s hope that their court case is successful!
Also in the tax news, in a rare display of bipartisan support a group of representatives
have reintroduced a bill that would exempt all crypto transactions of $200 or less from
getting taxed.
As it stands now, even a $1 dollar crypto transaction is subject to taxes.
This is obviously a huge inconvenience to anyone who wants to spend their coins, as
well as businesses which accept crypto payments.
The bill has failed to pass in earlier sessions, however, we’re hopeful that this time the
lawmakers will be able to get it through.
Paying tax on a $200 transaction, let alone a $2 transaction, doesn’t make any sense
and these confusing tax laws are definitely slowing down the growth of the American crypto
industry.
And finally in this week’s tax news roundup, TurboTax has partnered up with Coinbase to
let American tax payers get their refund in crypto!
Anyone who pays their taxes with TurboTax can request that their refund goes straight
to their Coinbase account to buy crypto with.
This new development should make it easier than ever to invest in crypto, and hopefully
there are lots of Americans out there who are ready to take advantage of this cool opportunity.
Thanks for watching everyone!
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Until next time, hodl on