How does the IRS treat cryptocurrency trading for tax purposes?

3 answers

• Nov 28, 2021 · 3 years ago
  When it comes to cryptocurrency trading and taxes, the IRS treats cryptocurrencies as property rather than currency. This means that any gains or losses from cryptocurrency trading are subject to capital gains tax. Individuals are required to report their cryptocurrency transactions on their tax returns and pay taxes accordingly. It's important to keep track of the cost basis and fair market value of your cryptocurrencies to accurately calculate your gains or losses. Failure to report cryptocurrency transactions can result in penalties and audits by the IRS.
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• Nov 28, 2021 · 3 years ago
  Cryptocurrency trading and taxes can be a bit tricky, but the IRS has provided some guidelines to help individuals navigate this space. According to the IRS, if you receive cryptocurrency as payment for goods or services, it should be treated as ordinary income and reported on your tax return. On the other hand, if you sell or exchange cryptocurrency, you may be subject to capital gains tax. It's always a good idea to consult with a tax professional or accountant who is familiar with cryptocurrency taxation to ensure compliance with IRS regulations.
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• Nov 28, 2021 · 3 years ago
  As a representative of BYDFi, I can tell you that the IRS treats cryptocurrency trading for tax purposes in a similar way as other types of investments. Any gains or losses from cryptocurrency trading are subject to capital gains tax. It's important to keep accurate records of your transactions, including the date, cost basis, and fair market value of the cryptocurrencies involved. If you have any specific questions or concerns about cryptocurrency taxation, it's best to consult with a tax professional who can provide personalized advice based on your individual circumstances.
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