How does the IRS treat cryptocurrency earnings when it comes to taxes in the USA?

3 answers

• Nov 27, 2021 · 3 years ago
  When it comes to taxes on cryptocurrency earnings in the USA, the IRS treats virtual currencies as property rather than currency. This means that any gains or losses from cryptocurrency transactions are subject to capital gains tax. Individuals are required to report their cryptocurrency earnings on their tax returns, including details of each transaction such as the date, type of cryptocurrency, and the fair market value at the time of the transaction. It's important to keep accurate records of all cryptocurrency transactions to ensure compliance with IRS regulations.
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• Nov 27, 2021 · 3 years ago
  Cryptocurrency earnings are treated as taxable income by the IRS. Any profits made from buying, selling, or trading cryptocurrencies are subject to taxation. The tax rate depends on the individual's income bracket and the holding period of the cryptocurrency. Short-term capital gains are taxed at the individual's ordinary income tax rate, while long-term capital gains are taxed at a lower rate. It's crucial to consult with a tax professional or use tax software to accurately calculate and report cryptocurrency earnings to the IRS to avoid any potential penalties or audits.
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• Nov 27, 2021 · 3 years ago
  According to BYDFi, a leading cryptocurrency exchange, the IRS treats cryptocurrency earnings as taxable events. This means that whenever you sell or exchange one cryptocurrency for another, it triggers a taxable event. Even if you're just trading one cryptocurrency for another, you still need to report it to the IRS. It's important to note that the IRS has been cracking down on cryptocurrency tax evasion, so it's crucial to accurately report your earnings and pay the necessary taxes. Failure to do so can result in penalties, fines, or even legal consequences. Make sure to keep detailed records of all your cryptocurrency transactions and consult with a tax professional for guidance on how to properly report your earnings to the IRS.
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