The biggest concern right now for cryptocurrency holders in the United States is how to declare their cryptocurrency assets without violating the IRS guidelines. The process of declaring taxes even for those who have traditional sources of income can become a tiring one. However, Blockfolio and TokenTax are trying to ease this burden for the U.S residents.
TokenTax is a platform where cryptocurrency investors can analyze their crypto transaction data and produce the relevant taxation documents. On the other hand, Blockfolio refers to a mobile digital currency portfolio. Indeed, the consolidation of these two firms can aid users in monitoring their transactions through Blockfolio; sign up for TokenTax and be able to generate all their transaction history. Alex Miles, who is the co-founder of TokenTax commented saying:
“One of the biggest time sinks for users is how they get their transactions into the Token Tax system. Given how many people already track their transactions in Blockfolio, an integration just made perfect sense.”
In addition, the United States government defines digital currencies as assets for the purpose of taxation. U.S residents should document capital gains and losses every time they deal with cryptocurrencies. In particular, they only need to qualify the profits or losses after selling the asset. However, the process of declaring each taxable event after heavy trading is really unwieldy. According to Blockfolio CEO, Edward Moncada the new partnership will be a big advantage to cryptocurrency investors. He said:
“We’ve looked across the market and believe that TokenTax’s product hits on all levels – from user experience to reporting accuracy to actual tax expertise and customer service….We’re thrilled that through this integration and partnership, the already massively time saving TokenTax experience becomes even easier for our users.”
The IRS Does not Recognize Fortnite as a Digital Currency
The Internal Revenue Service recently updated its website and removed game tokens as examples of convertible virtual currency. This recent clarification is highly significant as the new tax requirements need the taxpayers to report their digital currency dealings.