Taxation of Crypto Assets: The Example of U.S. Federal Income Tax

Year 2024, Issue: 74, 19 - 40, 30.05.2024

Muhammet Durdu , Ümit Süleyman Üstün

https://doi.org/10.26650/annales.2024.74.0002

Abstract

Crypto assets are one of the important milestones of digitalization. They have created paramount problems related to tax systems. The United States, which was one of the first countries where these assets became widespread, gained experience with the regulations it introduced. Observing these experiences and making inferences for similar regulations to be made in Türkiye is the main objective of this article. Judicial decisions and doctrinal studies in US law on the subject are examined, and the activities of the US Internal Revenue Service are explained. It should be said that although the United States began regulations roughly ten years ago, there is no undisputed solution for the taxation of crypto assets in the country. Still, some inferences could be made from the United States experience. One of the main results reached is that tax regulations regarding crypto assets should not impose heavy burdens and financial duties on taxpayers. It has been concluded that laying a withholding responsibility on intermediary institutions such as crypto asset exchanges or a transaction tax with a small percentage is an important tool in ensuring tax compliance. Consulting experienced crypto asset users and intermediary institutions will be a crucial step while conducting a regulatory impact analysis.

Keywords

Crypto assets, digital money, income tax, IRS, Coinbase case

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