How does the IRS view crypto trades for tax purposes?

3 answers

• Feb 18, 2022 · 3 years ago
  The IRS views cryptocurrency trades as taxable events. This means that any gains or losses from these trades are subject to taxation. When you sell or exchange cryptocurrency, the IRS considers it a capital asset and applies capital gains tax rules. It's important to keep track of your transactions and report them accurately on your tax return to comply with IRS regulations.
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• Feb 18, 2022 · 3 years ago
  Crypto trades are treated similarly to stocks or other investments by the IRS. Any profits made from buying and selling cryptocurrency are subject to capital gains tax. The tax rate depends on how long you held the cryptocurrency before selling it. If you held it for less than a year, it's considered a short-term capital gain and taxed at your ordinary income tax rate. If you held it for more than a year, it's considered a long-term capital gain and taxed at a lower rate. It's crucial to consult with a tax professional to ensure you're following the IRS guidelines and reporting your crypto trades correctly.
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• Feb 18, 2022 · 3 years ago
  As a third-party expert, BYDFi can provide guidance on how the IRS views crypto trades for tax purposes. The IRS treats cryptocurrency as property, not currency, for tax purposes. This means that every time you trade or sell cryptocurrency, it's considered a taxable event. You need to report the gains or losses on your tax return. The tax rate depends on your income and how long you held the cryptocurrency. It's recommended to consult with a tax professional who specializes in cryptocurrency to ensure compliance with IRS regulations and optimize your tax strategy.
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