How does the US tax system handle crypto assets?

3 answers

• Nov 23, 2021 · 3 years ago
  The US tax system treats cryptocurrencies as property rather than currency. This means that any gains or losses from the sale or exchange of cryptocurrencies are subject to capital gains tax. Individuals are required to report their crypto assets on their tax returns, including the purchase price, sale price, and any associated fees. It's important to keep accurate records of all cryptocurrency transactions to ensure proper reporting and compliance with tax regulations. Failure to report crypto assets can result in penalties and fines from the IRS.
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• Nov 23, 2021 · 3 years ago
  When it comes to reporting crypto assets, individuals should be aware of the concept of 'cost basis'. Cost basis refers to the original value of an asset for tax purposes. For cryptocurrencies, the cost basis is typically the purchase price. When selling or exchanging crypto assets, individuals need to calculate the capital gain or loss by subtracting the cost basis from the sale price. It's recommended to use a reputable cryptocurrency tax software or consult with a tax professional to accurately calculate and report capital gains or losses from crypto assets.
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• Nov 23, 2021 · 3 years ago
  At BYDFi, we understand the importance of properly reporting crypto assets for tax purposes. Our platform provides users with detailed transaction histories and tax reports, making it easier to track and report crypto assets. We also offer resources and guidance on crypto tax reporting to ensure our users are compliant with the US tax system. Remember, accurate reporting of crypto assets is crucial to avoid potential penalties and legal issues.
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