The IRS Commissioner reminds that crypto tax is a top priority for enforcement

The IRS commissioner has declared that crypto gains are taxable in the marijuana industry because the IRS considers cryptocurrencies property. The United States Internal Revenue Service continues to propose new tax reforms to regulate the crypto investments in the U.S., with the latest notice sharing tax obligations for the marijuana industry.The notice, signed by IRS Small Business/Self-Employed Division Commissioner De Lon Harris, reflects the priorities of the United States federal agency to ensure cryptocurrency tax compliance among local businesses that grow, distribute and sell cannabis.Commissioner Harris said that the use of cryptocurrencies in the cannabis industry is one of the top enforcement priorities of the IRS. This statement is in line with the Senate’s July 2021 proposal to tighten reporting and taxation rules for cryptocurrency businesses. Harris stated that “Those who use it [cryptocurrencies] must understand that the IRS considers them property and that gains are taxable.” The IRS commissioner also recommended that cannabis businesses work with reliable exchanges to convert cryptocurrencies into U.S. Dollars. The IRS has yet to ask businesses to report high-value crypto transactions. For every transaction exceeding $10,000, companies will need Form 8300. Related: US lawmakers propose digital assets to be ‘washed’ and to increase capital gains tax. Last-minute amendments were made to the Senate’s bipartisan Infrastructure Deal, which saw means to raise funds of $28 billion through taxing crypto transactions and investments. On Sept. 13, Democrats in Congress proposed new tax initiatives to increase the tax rate for long-term capital gains. If approved, the law will increase crypto taxes for “certain high-income individuals” by 5%.According to Cointelegraph’s report, the bill also recommends a surtax of 3.8% on net investment income, bringing up the tax rate to 28.8% for select investors.Additionally, the new tax plan will impose the wash-sale rule on cryptocurrencies and other digital assets, which prevents investors from claiming capital gains deductions. U.S. lawmakers suspect that crypto investors are manipulating their portfolio’s capital gains by using wash sales.

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