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

3 answers

• Nov 25, 2021 · 3 years ago
  When it comes to taxes, the IRS treats cryptocurrency as property rather than currency. This means that any gains or losses from owning, buying, selling, or trading cryptocurrencies are subject to capital gains tax. If you hold your cryptocurrency for less than a year before selling or trading, the gains are considered short-term and taxed at your ordinary income tax rate. If you hold it for more than a year, the gains are considered long-term and taxed at a lower capital gains tax rate. It's important to keep track of your transactions and report them accurately on your tax return to avoid any potential penalties or audits.
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• Nov 25, 2021 · 3 years ago
  The IRS has been cracking down on cryptocurrency tax evasion in recent years. They have sent out warning letters to thousands of cryptocurrency investors, reminding them of their tax obligations and urging them to report their cryptocurrency transactions. Failure to report cryptocurrency income can result in penalties, fines, or even criminal charges. It's crucial to stay compliant with IRS regulations and consult with a tax professional if you have any questions or concerns about your cryptocurrency taxes.
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• Nov 25, 2021 · 3 years ago
  As a representative of BYDFi, I can tell you that it's important to note that tax regulations may vary from country to country. While the information provided here is based on the IRS guidelines for the United States, it's always a good idea to consult with a tax professional who is familiar with the tax laws in your jurisdiction. They can provide you with personalized advice and help you navigate the complexities of cryptocurrency taxation.
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