Tax experts: "Cryptocurrency support at PayPal will lead to tax confusion"

Tax experts believe, that support for cryptocurrencies in the PayPal payment system will lead to confusion and complicate the process of filing a tax return.

Recently it became known, that in the next few weeks, American users PayPal will be able to buy, sell and store cryptocurrencies. Internal Revenue Service (IRS) considers bitcoin and other cryptocurrencies as property, Therefore, every purchase, Sale or exchange of a digital asset should be taxed for capital growth.

Considering, that PayPal will allow you to pay cryptocurrencies for goods in 26 million shops around the world, Even the usual purchase of coffee for bitcoins through PayPal implies an increase or loss of capital, even in several cents. Calculations with sellers will be carried out in fiat currency, Therefore, with each conversion of user digital assets, a tax liability will be created in cash..

Paul Hastings Law Firm Lawyer and a member of the American Institute of Gented Public Accountants (AICPA) Stephen Turnschik (Stephen Turanchik) considers, that in this case, financial statements will become a real "headache". A wide variety of payments with conventional and digital currencies in PayPal and Venmo services will complicate reporting. Track all transactions, as well as the increase in the increase or loss of capital will be very difficult, especially if users combine corporate and personal payments on these platforms.

Co -chair & Johnson LLP Liza Zarlenga (Lisa Zarlenga) said, that over time, the number of small purchases for cryptocurrencies will grow. But, Regardless of the amount spent, Such transactions will be taxed.

Certified auditor Kirk Phillips (Kirk Phillips) considers, that support for cryptocurrencies in the PayPal system will contribute to their large -scale implementation. However, so that services and their users do not have problems with the tax authorities, It is necessary to work out in more detail the issue of submitting tax reporting. Being an operator of payments, PayPal must submit form 1099-K Users and IRS, If the total income of the account owner exceeds $ 20,000, And if the user makes more 200 transactions for the calendar year.

Even if all users can view the history of transactions and statements on accounts through their account PayPal, this may not be enough to draw up tax reports. Users will have to track the base price, on which they bought cryptocurrency, in what quantity they spent it, and how long they stored it before, how to sell.

Recall, that this week IRS made changes to the form of reporting by taxpayers and gave examples of transactions, Information about which users must disclose.