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What are the tax implications of trading cryptocurrencies versus equities and futures?

avatarCook LangeMar 29, 2022 · 3 years ago1 answers

Can you explain the tax implications of trading cryptocurrencies compared to equities and futures? How do the tax rules differ for these different types of investments?

What are the tax implications of trading cryptocurrencies versus equities and futures?

1 answers

  • avatarMar 29, 2022 · 3 years ago
    As a representative of BYDFi, I can tell you that the tax implications of trading cryptocurrencies versus equities and futures can be quite different. Cryptocurrencies are treated as property by the IRS, which means that every time you trade or sell a cryptocurrency, it's considered a taxable event. This means you'll need to report any gains or losses on your tax return. On the other hand, equities and futures are subject to capital gains tax. The tax rate depends on how long you hold the asset before selling it. Short-term capital gains are taxed at your ordinary income tax rate, while long-term capital gains are taxed at a lower rate. It's important to keep accurate records of your trades and consult with a tax professional to ensure compliance with the tax laws.
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