As the mid-April tax filing deadlines approach, Lee says that cryptocurrency selling pressure rises. In a report for CNBC, the analyst says that he estimates an approximate $25 billion being owned in capital gain taxes for cryptocurrency holdings by U.S. Households. And that’s the ‘low estimate’.
As the tax day approaches, we could witness ‘massive’ selling of cryptocurrencies into U.S. dollars.
Lee explained:This is a massive outflow from crypto to USD and historical estimates are each $1 of USD outflow is $20-$25 impact on crypto market value.
Going further, the expert believes that selling pressure is also being piled up by crypto exchanges.
In late March, the IRS reminded that virtual or digital currencies are taxable by law just as transactions of any other type of property. The taxman also went on reminding that steep penalties are in for those who fail to properly oblige by mid-April’s tax day.
While administrative cash penalties and interest are awaiting low-key crypto investors for failing to report their taxes, those who deal in larger quantities definitely have a lot more on the line to worry about, according to the release from the IRS:
Criminal charges could include tax evasion and filing a false tax return. Anyone convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Anyone convicted of filing a false return is subject to a prison term of up to three years and a fine of up to $250,000.This all are making impact on bitcoin.