An early crypto investor has pleaded guilty to filing tax returns that underreported the capital gains he earned from selling millions of dollars worth of Bitcoin (BTC).
According to the US Department of Justice (DOJ)Frank Richard Ahlgren III bought about 1,366 BTC in 2015, when the flagship cryptocurrency was still trading for less than $500.
Two years later, he sold 640 BTC for $5,807.53 each, for a total of $3.7 million. The lion’s share of the BTC he sold came from the Bitcoin he acquired in 2015.
The DOJ says Ahlgren used all proceeds from the sale to purchase a home in Park City, Utah. He then filed a false 2017 tax return with the Internal Revenue Service (IRS), significantly inflating the cost basis of his Bitcoin purchases, causing the capital gains from the sales to be underreported.
In 2018 and 2019, Ahlgren again sold more than $650,000 worth of Bitcoin, but he did not report the sales on tax returns for those years.
US taxpayers are required to report gains or losses from the sale of crypto assets on their IRS tax returns. According to the DOJ, Ahlgreen’s false returns caused the IRS to suffer more than $550,000 in tax losses.
Ahlgreen’s sentencing will take place at a later date. He faces up to three years in prison, as well as a period of supervised release, restitution and fines.
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Generated image: Midjourney