star bucks coffe facing tax filing issue due to cryptoAs an initiative by the Bakkt launch, payment for beverages at Starbucks is set to happen via Bitcoin. Media reports revealed that Starbucks was awarded a generous stake in Bakkt for giving customers the choice to purchase coffee using BTC.
This news indicates huge progress towards the acceptance of cryptocurrency technology in the retail sector. However, analysts suggest that this adoption of cryptocurrency will lead to major implications in terms of taxes. Since BTC is categorized as property, using it to make purchases at Starbucks would require calculation of capital gains tax upon each order.
James Foust from the Coin Center stated in an interview with MarketWatch, that using BTC to order coffee is viable technically, but would only increase the tax calculation burden. One would need to calculate the current market value of BTC versus its fair market value the time of filing taxes.
This would mean that Starbucks customers will be required to save their receipts until the tax filing season. Knowing the complex nature of tax filing for the cryptocurrency, this extra burden would be a serious obstacle in the dissemination of cryptocurrency technology for retail purposes.
Experts suggest that provided the possible advantages of BTC, strategies should be made to find a way around these hindrances and aid adoption of this technology. One of the plausible methods for this would be to modify cryptocurrency related tax regulations.
The IRS could strategize policies to promote the use of cryptocurrency by providing exemption on such purchases, particularly those involving microtransactions. This would be like the tax exemption laws in existence for foreign currency, encouraging innovation in technology for use in retail transactions.
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