What are the common mistakes that cryptocurrency holders make that lead to CP2000 notice?

3 answers

• May 06, 2022 · 3 years ago
  One common mistake that cryptocurrency holders make is failing to report their cryptocurrency transactions on their tax returns. The IRS considers cryptocurrency as property, and any gains or losses from cryptocurrency transactions are subject to taxation. Failing to report these transactions can lead to a CP2000 notice, which is a discrepancy notice sent by the IRS. It's important to accurately report all cryptocurrency transactions to avoid any potential issues with the IRS.
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• May 06, 2022 · 3 years ago
  Another mistake that cryptocurrency holders often make is underestimating the value of their cryptocurrency holdings. Cryptocurrency prices can be highly volatile, and the value of holdings can increase significantly over time. Failing to accurately report the value of cryptocurrency holdings can result in an incorrect tax assessment and potentially trigger a CP2000 notice. It's important to regularly assess the value of cryptocurrency holdings and report them accurately on tax returns.
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• May 06, 2022 · 3 years ago
  At BYDFi, we understand the importance of accurately reporting cryptocurrency transactions. One common mistake that cryptocurrency holders make is not keeping detailed records of their transactions. It's crucial to maintain accurate records of all cryptocurrency transactions, including the date, value, and purpose of each transaction. These records can be used to support the accuracy of tax returns and prevent any potential issues with the IRS. Remember to keep track of your cryptocurrency transactions to avoid receiving a CP2000 notice.
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