How are cryptocurrencies taxed compared to stocks?

3 answers

• Jan 07, 2022 · 3 years ago
  Cryptocurrencies and stocks are taxed differently due to their unique characteristics. While stocks are subject to capital gains tax when sold, cryptocurrencies are treated as property by the IRS. This means that every time you use or sell cryptocurrency, you may trigger a taxable event. Additionally, cryptocurrency investments held for less than a year are subject to short-term capital gains tax rates, which are typically higher than long-term rates. On the other hand, stocks held for more than a year may qualify for lower long-term capital gains tax rates.
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• Jan 07, 2022 · 3 years ago
  When it comes to taxes, cryptocurrencies and stocks have their own rules. Cryptocurrency transactions need to be reported on your tax return, and you may need to pay taxes on any gains you make. However, the IRS has not provided clear guidelines on how to calculate the cost basis for cryptocurrencies, which can make tax reporting complex. On the other hand, stocks are more straightforward when it comes to taxation. You only need to report your gains or losses when you sell the stocks.
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• Jan 07, 2022 · 3 years ago
  As a third-party expert, I can provide some insights on this topic. Cryptocurrencies and stocks are taxed differently because they are considered different asset classes. Cryptocurrency investments are subject to capital gains tax, similar to stocks. However, the tax treatment of cryptocurrencies is still evolving, and it's important to consult with a tax professional to ensure compliance with the latest regulations. At BYDFi, we recommend keeping detailed records of your cryptocurrency transactions to accurately report your taxes and minimize any potential issues with the IRS.
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