What are the taxes involved when selling bitcoin for USD?

1 answers

• Dec 18, 2021 · 3 years ago
  Selling bitcoin for USD can have tax implications. The IRS considers bitcoin as property, so when you sell it, you may need to pay capital gains tax. The tax rate will depend on your income level and how long you held the bitcoin. If you held it for less than a year, the gains will be taxed as short-term capital gains, which are subject to your ordinary income tax rate. If you held it for more than a year, the gains will be taxed as long-term capital gains, which have lower tax rates. Additionally, you may also need to pay state and local taxes on the sale of bitcoin. It's important to consult with a tax professional to understand your specific tax obligations.
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