# data[].attributes.body
The founder of Thorn Law Group, Kevin Thorn, develops strong client partnerships to offer legal representation in various tax matters. Mr. Thorn and his legal team are experienced in the areas of criminal tax, business tax, and international tax. The law firm represents clients all over the United States as well as many foreign countries throughout the world.

# data[].attributes.body
Hours: Mon - Fri 9 a.m. to 5 p.m.
Phone: (240) 235-5096

# data[].attributes.attachment_link.description
Thorn Law Group can help resolve serious business tax issues for companies in Maryland, across the U.S. and abroad. Contact a business tax lawyer.

# data[].attributes.attachment_link.description
Thorn Law Group has the criminal tax lawyer that you need. We have served clients in Maryland and around the globe in serious criminal tax law matters.

# data[].attributes.body
2 Wisconsin Circle, Suite 700
Chevy Chase, Maryland 20815

# data[].attributes.attachment_link.readable_text
Many cryptocurrency enthusiasts see digital currencies as a way to hide their assets and avoid taxes. Not surprisingly, the Internal Revenue Service has caught on and has been working hard on ways to enforce tax compliance. In 2014, the IRS released Notice 2014-21, 2014-16 I.R.B. 938, which explains that digital currencies are treated as property for Federal tax purposes, and the same taxation rules apply. As cryptocurrencies have become more widely used, they have become more stringent on enforcement.

What Is Cryptocurrency?

Cryptocurrencies are digital currencies that are built upon decentralized blockchain technology and can be used to purchase goods and services like any other currency. A blockchain is a method of recorded transaction details in digital blocks of information that cannot be altered. Some of the most popular cryptocurrencies include Bitcoin, Etherium, and Lightcoin.

While cryptocurrencies are not recognized as legal tender in the United States as they are in other countries, they are becoming more popular for financial transactions and contracts. In addition, the value of cryptocurrencies is extremely volatile in comparison to fiat currencies. This means that it is possible to make a profit by buying, selling, and trading these currencies.

What Cryptocurrency Gains Need to Be Reported?

You only need to report your cryptocurrency to the IRS when a profit is made. While simply buying crypto is not a taxable event, any profit made will need to be reported on your tax return if you resell it for more than what you paid. This applies to any type of transaction that results in a gain, including receiving airdropped tokens, trading, staking, mining, or lending. Gifts and inheritance received in cryptocurrency are treated as regular assets and will need to be reported as well. In addition, if you have cryptocurrency held in a offshore accounts that also holds other assets, it is subject to the Foreign Bank and Financial Accounts (FBAR) reporting rules.

How to Report Cryptocurrency on Your Tax Return

The new 1040 tax form has a question on whether the taxpayer was involved in any virtual currency transactions. Crypto gains and losses are calculated using Form 8949, and then reported on Schedule D of your 1040. If you're an avid cryptocurrency trader, be aware that exchanges are required to file a 1099-K for users that have traded more than 200 transactions or $20,000 worth of assets in the past year.

The tax rate you will have to pay on your cryptocurrency gains will depend on several factors, including your income and filing status. In addition, they will be taxed as short-term or long-term gains depending on whether you held onto the asset for at least 365 days. Long-term gains will be taxed at a lower rate. In general, for tax purposes, crypto gains are treated the same way as capital gains on stocks and are taxed at the same rate.

If you receive payment in cryptocurrency for goods and services, the value of the currency received at the time of payment will be counted as income. As cryptocurrency prices can fluctuate widely, it is your responsibility to track your gains and losses. In 2023, some exchanges will start providing a Form 1099-B with your yearly gains and losses, but of course, this will only include whatever assets are left on the exchange and does not track anything that is moved to your personal wallet(s). There are a number of crypto-related tax software programs available that can help with tracking and are compatible with common tax filing software.

Potential Consequences For Not Reporting

Even if your exchange has not filed a 1099 to the IRS for your transactions, that does not mean that you are off the hook for paying taxes on them. While previously blockchain technology was lauded for its anonymity-only the wallet addresses of the parties involved can be seen in a given transaction-many exchanges have now implemented KYC (Know Your Customer) verification which links your legal identity to your account.

The IRS's Office of the Chief's Counsel has become more diligent in recent years when it comes to the reporting of cryptocurrency transactions. Those caught failing to report can find themselves facing a tax audit or investigation, which can have consequences ranging from fines to criminal charges. As filing taxes can be complex for those who regularly use cryptocurrency, you may need to consult with a tax attorney or CPA to ensure that you avoid penalties.

# data[].attributes.attachment_link.title
Do You Have to Pay Taxes on Cryptocurrency Gains?

# data[].attributes.attachment_link.description
Many cryptocurrency enthusiasts see digital currencies as a way to hide their assets and avoid taxes. Not surprisingly, the Internal Revenue Service has caught on and has been working hard on ways to enforce tax compliance. In 2014, the IRS released Notice 2014-21, 2014-16 I.R.B.

# data[].attributes.attachment_link.description
For skilled legal counsel in international tax matters, contact the attorneys at Thorn Law Group. Our Maryland office is ready to help you with your case!

# data[].attributes.attachment_link.readable_text
It seems that NFTs have become all the rage in the last couple of years, but the practice of investors using art to "hide" their assets to minimize tax liability is nothing new. However, don't think that being an NFT creator or collector means you can avoid paying taxes on any profits you make. While the Internal Revenue Service has yet to define rules that are specific to NFTs, in 2014 they released Notice 2014-21, 2014-16 I.R.B. 938, which defines digital assets as property for federal tax purposes, and subject to the same rules as other types of assets.

What is an NFT?

NFT stands for "non-fungible token." It is a digital (usually artistic) asset that is minted on a decentralized blockchain network, such as Ethereum or Tezos. When this happens, the digital creation is "stamped" with a token that cannot be duplicated, making the NFT unique. An easy analogy is to think of it as similar to owning the original signed painting by an artist rather than a print of it. Each NFT is unique; they are not interchangeable. While you can easily copy or share the image, only the NFT is going to have the creator's token attached.

NFTs have become popular among artists and collectors, and many have sold or resold for thousands or even millions of dollars. Some of the most famous and profitable examples of NFT projects include CrytoKitties, CrytoPunks and the Bored Ape Yacht Club. Even celebrities are getting into the NFT craze. Sports figures and musicians such as Shikira and Snoop Dogg have gotten involved in creating and selling these digital collectibles.

When Do You Need to Report NFTs on Your Tax Return?

What events are considered taxable will depend on whether you are an NFT creator or collector. If you are a professional creator, minting an NFT is a taxable event. This means that the "gas" fee you paid to mint the NFT can be deducted as a business expense, and any profit you make from selling it is counted as ordinary income. In addition, any resale royalties would be taxable as well.

If you are a trader or collector, the IRS classifies NFTs as collectibles, and are bound under the same rules as valuable tangible items such as art, precious gems, and antiques. Any gains made from selling an NFT for more than you purchased it for will be taxed as short-term or long-term gains, depending on how long you held onto the asset before selling it. However, you can also claim losses from NFT transactions as well.

How to Report Gains From NFTs

While NFTs are taxed as ordinary assets for creators, they are treated as capital assets for collectors. Capital gains and losses, including those related to NFTs, are reconciled using the IRS Form 8949, and reported on Form 1040 using Schedule D. If you sold an NFT, be sure to enter the code "C" (for collectible) in column (f). Assets that you have had for a year or more or taxed at the long-term capital gains rate of 28%, regardless of your income level. Any held for less than a year are taxed as short-term gains, which is equal to your ordinary income tax rate.

Potential Consequences For Not Reporting

Don't think that you can hide your NFT profits from the IRS. As their popularity has grown, the IRS has been focusing on the enforcement of tax payments for digital currency gains such as those from NFTs, and has been targeting those who fail to comply with audits and cryptocurrency tax fraud investigations. While blockchain transactions were once anonymous, it has now become easier to identify the parties involved. Be sure to avoid the risk of fines or criminal charges by ensuring your NFT gains are properly reported.

# data[].attributes.attachment_link.title
Do You Have to Claim NFTs on Your Tax Return?

# data[].attributes.attachment_link.description
It seems that NFTs have become all the rage in the last couple of years, but the practice of investors using art to "hide" their assets to minimize tax liability is nothing new. However, don't think that being an NFT creator or collector means you can avoid paying taxes on any profits you make.