August 12, 2022

Parents, it’s time for ‘the talk’: Did your kid trade crypto in 2020?

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The taxation of cryptocurrency is no longer just a young person’s problem. That changed the day the United States Internal Revenue Service made cryptocurrency a focal point of enforcement and added a crypto disclosure question on its Form 1040. Unsuspecting parents with dependent children should be on guard. The IRS is looking for noncompliance, and crypto questions create a possibly perjurious trap. Noncompliance may be sleeping in the basements of many unwary parents.

As of October 2019, nearly 40 million Americans own some form of cryptocurrency, and the average account value is over $5,000. And Google Analytics data shows that over 40% of all crypto owners over the age of 18 are millennials, and nearly 17% are recently out of high school. It is the latter group that should concern parents. Those numbers equate to millions of crypto owners being college-aged or younger. This creates a potential “crypto trap” for parents who claim crypto-savvy young persons as dependents on their tax returns.

Related: Crypto could save millennials from the economy that failed them

Most parents claim their children under 18 as dependents, and some claim their children in college.Title: Parents, it’s time for ‘the talk’: Did your kid trade crypto in 2020?
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Published Date: Thu, 04 Feb 2021 17:54:00 +0000