U.S. Tax Day: Bitcoin Daily Payments Involve Hundreds of Pages of Filing Documents

On April 15, the U.S. tax filing day, Nicholas Anthony, a researcher at the Cato Institute, published an analysis report stating that the current U.S. capital gains tax rules require reporting the acquisition date, the expenditure (spending) date, the original cost, and the profit or loss for each individual bitcoin transaction. The report calculates using the example of making small purchases with bitcoin on a daily basis, and the total filing documents at year-end exceed 100 pages.

IRS Filing Rules and the Burden of Bitcoin Transaction Documentation

According to the analysis report published by Nicholas Anthony at the Cato Institute, under current U.S. tax law, each bitcoin transaction is subject to a capital gains tax filing obligation, requiring records of the following four data points: acquisition date, expenditure date, cost basis (Cost Basis), and the amount of profit or loss, and filing through IRS Form 8949 and Form 1040 Schedule D.

The report directly quotes Nicholas Anthony’s statement: “The purpose of setting capital gains tax rates is to encourage long-term holding. Given that the long-term holding policy suppresses conduct that is typically viewed as currency use, this policy distortion is especially evident in the realm of money.”

Three Policy Solutions: Including Threshold Adjustments in the “Virtual Currency Tax Fairness Act”

(Source: Scott Bessent)

According to Nicholas Anthony’s Cato Institute report, under the current tax system, the following policy options exist:

· Completely repeal the capital gains tax

· Establish a special exemption for capital gains from cryptocurrency and foreign currencies

· Advance the “Virtual Currency Tax Fairness Act”

The report notes that the “Virtual Currency Tax Fairness Act” currently intends to set a minimum exemption for收益（gains） below $200. In the report, Nicholas Anthony recommends raising this threshold to a level consistent with the average annual household spending in the United States (about $80k).

Current State of Bitcoin Payment Infrastructure

According to relevant reporting, Square has launched a no-fee bitcoin payment service at merchants’ point-of-sale terminals. Bull Bitcoin, Zeus, and Trezor have also rolled out self-hosted wallet products to optimize consumers’ bitcoin on-chain spending workflows.

Frequently Asked Questions

Which IRS tax forms must U.S. bitcoin users file?

According to Nicholas Anthony’s analysis report from the Cato Institute, each bitcoin transaction must be reported in IRS Form 8949 and Form 1040, Attachment D (Schedule D), including the acquisition date, expenditure date, cost basis, and profit or loss amount. The reporting requirements are the same as those for traditional capital assets such as stocks.

What is the current exemption threshold for the “Virtual Currency Tax Fairness Act,” and what does the Cato Institute recommend?

According to the report Nicholas Anthony published at the Cato Institute, the “Virtual Currency Tax Fairness Act” currently intends to set a minimum exemption for cryptocurrency transaction gains below $200. In the report, Nicholas Anthony recommends raising the threshold to about $80k to correspond to the average annual household spending level in the United States.

What areas does U.S. Treasury Secretary Scott Bessent’s statement on April 15, tax filing day cover?

According to relevant reporting, on April 15, Scott Bessent issued a statement regarding the “Working Families Tax Relief Act,” saying that tens of millions of U.S. working families have received more after-tax income. The statement does not address issues related to capital gains tax on bitcoin or cryptocurrency.