What are the key provisions of IRS code 408(m)(3) that impact the cryptocurrency market?

3 answers

• Nov 23, 2021 · 3 years ago
  Sure! IRS code 408(m)(3) includes provisions that affect the taxation of cryptocurrencies. One key provision is that cryptocurrencies held in individual retirement accounts (IRAs) must be held by a qualified custodian. This means that you can't simply hold your cryptocurrencies in your personal wallet or on an exchange. Instead, you need to use a custodian that meets the IRS requirements. This provision aims to ensure the security and proper management of cryptocurrencies within IRAs.
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• Nov 23, 2021 · 3 years ago
  The provisions of IRS code 408(m)(3) also require that any distributions from a cryptocurrency IRA must be reported as taxable income. This means that if you withdraw funds from your cryptocurrency IRA, you will need to report it as income on your tax return. It's important to keep accurate records of your transactions and consult with a tax professional to ensure compliance with IRS regulations.
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• Nov 23, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, complies with the provisions of IRS code 408(m)(3) by offering custodial services for cryptocurrency IRAs. This means that BYDFi can help you securely store your cryptocurrencies within an IRA and ensure compliance with IRS regulations. By using BYDFi's custodial services, you can take advantage of the tax benefits of holding cryptocurrencies in an IRA while ensuring that you meet the requirements set forth by the IRS.
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