The following guide contains instructions on calculating taxes on your cryptocurrency investments.
Since the beginning of the year, the value of cryptocurrencies increased by an average of 900%. Given the staggering increase in value, investors are likely to owe a sizeable chunk of taxes to the IRS. Cryptocurrency's Treatment as Property.
In order to understand the tax implications of cryptocurrency trading it's important to firstthe myth that the IRS treats crypto as a "Currency."
According to the IRS, for all intents and purposes, cryptocurrency is considered a property for tax purposes.
If you conduct a large number of trades using cryptocurrency, you must report every exchange and calculate the gain or a loss at the point of each transaction.
Like stocks, every time you trade your cryptocurrency, even if it's for another cryptocurrency, you incur capital gains or losses.
Cryptocurrency capital gains occur when you hold a cryptocurrency for less than a year and sell the cryptocurrency at more than basis.
For the HODLers out there, if you held onto your cryptocurrency for a year or more you qualify for a lower long-term capital gains rate.
Some have argued that like-kind exchanges would allow cryptocurrency investors to trade into another cryptocurrency without triggering any taxes.
If you liked the article above, take a look at our related article The Cryptocurrency Miner's Guide to Taxes.
The Investor's Guide to Cryptocurrency Taxes
Published on Apr 9, 2018
by Cryptoslate | Published on Coinage
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