• A survey of 305 US crypto investors showed that 58% reported crypto holdings on their taxes in 2022, while 31% did not report and 11% declined to answer.
• Reasons for not reporting included not profiting from trading (50%), not knowing they had to report (18%), and not knowing how to report (12%).
• Crypto gains earned from purchases held less than a year are subject to regular income tax, which varies between 10-37%.
Survey of US Crypto Investors
A survey of 305 American adults who own or invest in crypto was conducted by CoinLedger in December 2022. The results showed that 58% reported cryptocurrency holdings on their taxes for the 2022 fiscal year, up 4% from the previous year. Meanwhile, 31% did not report any holdings, and 11% declined to answer the question.
Reasons for Not Reporting
Of those that didn’t report their cryptocurrency holdings, 50% said it was because they didn’t profit from trading while 18% said they weren’t aware they had to report them. Additionally 12%, 7%, and 4%, respectively, stated they weren’t sure how to file tax returns with their crypto holdings, didn’t want to pay taxes, or believed the government wouldn’t know about their cryptocurrencies anyway.
Lack of Clarity Around Taxation
The survey revealed there is a lack of understanding around taxation rules regarding cryptocurrencies. Most people — 65 percent — were aware that selling cryptocurrency is taxable but only 38 percent knew that crypto-to-crypto trades are also taxable under U.S law. On the other hand, 25 percent thought wallet-to-wallet transfers were taxable when in fact it’s non-taxable as well as holding cryptocurrencies (21%).
Changes Broadening IRS Tax Requirements
On February 8th Cryptoslate reported numerous changes set to broaden IRS tax requirements for anyone who has received or sold cryptocurrencies. In the US it was noted that all gains made from purchases held under one year are subject to regular income tax which can range anywhere between 10 – 37 percent depending on an individual’s circumstances.
Conclusion
Overall this survey reveals there is still a lack of education and clarity around taxation when it comes to cryptocurrencies so more awareness needs be spread across board so people understand their legal obligations when investing in digital assets.
