CCA Cryptocurrency Taxation & Accounting

Question 1

How does the IRS classify cryptocurrency for federal tax purposes in the United States?

Accepted Answer

As property

Answer

As currency

Answer

As a commodity

Answer

As a security

Question 2

What type of income is recognized when cryptocurrency is received as payment for goods or services?

Accepted Answer

Ordinary income

Answer

Capital gain income

Answer

Passive income

Answer

Tax-exempt income

Question 3

Which cost basis accounting method allows taxpayers to minimize capital gains by designating specific lots of cryptocurrency to sell?

Accepted Answer

Specific identification

Answer

FIFO

Answer

LIFO

Answer

Average cost basis

Question 4

Which of the following events does NOT trigger a taxable event for cryptocurrency?

Accepted Answer

Transferring cryptocurrency between your own wallets

Answer

Selling cryptocurrency for fiat currency

Answer

Trading one cryptocurrency for another

Answer

Receiving cryptocurrency as payment for services

Question 5

What is the minimum holding period required for cryptocurrency gains to qualify as long-term capital gains in the US?

Accepted Answer

More than 1 year

Answer

6 months

Answer

2 years

Answer

18 months

Question 6

How are cryptocurrency mining rewards taxed when first received by a US taxpayer?

Accepted Answer

As ordinary income at fair market value

Answer

As long-term capital gains

Answer

Not taxed until sold

Answer

As short-term capital gains

Question 7

Which IRS form is primarily used to report capital gains and losses from cryptocurrency disposals?

Accepted Answer

Form 8949 and Schedule D

Answer

Schedule C

Answer

Form 1099-K

Answer

Form W-2