Taxes and cryptocurrencies in the US and Italy

Tax cryptocurrencies

The exponential growth of the cryptocurrencies and its ever-increasing diffusion has posed the problem of how to pay taxes for those who hold digital currencies.

The problem is more complicated than one might think because there are different tax regimes depending on the country of residence, and the picture is not always clear and definitive.

Let’s see what the current situation is in the United States and Italy.

Crypto regulation and taxes in the US

In the United States, the rules regarding cryptocurrency taxation are fairly well defined. The US considers cryptocurrencies not as securities, but as property and therefore they must be declared as such.

After years in which cryptocurrency owners enjoyed a kind of grey area, in 2019 the US tax agency, the IRS, decided to tax cryptocurrencies like property.

Every owner of cryptocurrencies has to declare their possession on their income tax return in the property section, as if it were a house or a collection of paintings or ancient coins.

But this according to many is only an intermediate step, because in 2022 the tax regime for the cryptocurrency market will probably change again.

This is because the rules are still rather confusing, especially with regard to the calculation of capital gains, considering the fact that many exchanges do not provide the US IRS with data on their users. 

Many cryptocurrency transactions are taxed anyway, such as capital gains on crypto trades, but even any purchases of goods and items with cryptocurrencies become subject to taxation.

Getting paid in cryptocurrency also becomes a taxable source of income, as do rewards and prizes received from, for example, lending crypto or staking.

Donations to charities or holding cryptocurrencies without speculation are not taxable. But as mentioned, the situation will soon change.

The Treasury Department’s new Greenbook, published in May, contains stricter requirements for the taxation of cryptocurrencies.

For example, one proposal put forward would require companies to report all cryptocurrency transactions worth more than $10,000 to the IRS.

President Biden, who has been quite critical of cryptocurrencies recently, would like to increase the maximum tax rate on long-term capital gains to 43.4%, from 23.8% currently.

Tax laws in US are going to change

Taxes on cryptocurrencies in Italy

Even more confusing is the situation of cryptocurrency taxation in Italy, where the tax system has not yet managed to issue precise regulations on the subject.

Currently, only the part of the gain realized on the sale of cryptocurrencies for an amount greater than 51,645 euros, equal to the old one hundred million lire, is owed to the tax authorities.

In this case, the capital gain must be declared in the RT framework of the income model PF, paying a substitute tax of 26%. Below that threshold, nothing would be owed to the tax authorities.

This is because the same regulations that apply to the possession of foreign currencies apply to digital currencies.

However, the holding of cryptocurrencies, even for smaller amounts, should be declared in the RW framework of the “Modello UNICO”.

However, the definition of cryptocurrency custody is not very clear, because it becomes difficult to understand whether the possession of cryptocurrencies held in digital wallets should be declared, and it is also not clear whether withdrawals or movements made with these virtual wallets should be declared to the tax authorities.

Moreover, it is still unclear whether and how capital gains realized on exchanges between cryptocurrencies, without making any switch to a fiat currency, should be taxed.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

What do you think?

Paediatric Nurse Turns Crypto Trading Hobby Into Main Job, Now Has Seven-Figure Income

Paediatric Nurse Turns Crypto Trading Hobby Into Main Job, Now Has Seven-Figure Income

Bitcoin Ecosystem Flashes Bullish Signs | CryptoGazette

Ethereum Competitor AVAX Shows Bullish Momentum | CryptoGazette