What are the IRS guidelines for reporting cryptocurrency on taxes?

3 answers

• Nov 29, 2021 · 3 years ago
  Sure! According to the IRS, cryptocurrency is treated as property for tax purposes. This means that any gains or losses from the sale or exchange of cryptocurrency are subject to capital gains tax. If you sell your cryptocurrency after holding it for less than a year, the gains will be taxed at your ordinary income tax rate. However, if you hold the cryptocurrency for more than a year, the gains will be taxed at the long-term capital gains rate, which is typically lower. It's important to keep track of your transactions and report them accurately on your tax return to avoid any penalties or audits.
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• Nov 29, 2021 · 3 years ago
  Reporting cryptocurrency on taxes can be a bit confusing, but the IRS has provided some guidelines to help. First, you need to determine if your cryptocurrency transactions qualify as taxable events. This includes selling cryptocurrency, trading it for another cryptocurrency, or using it to purchase goods or services. Once you've determined that you have a taxable event, you'll need to calculate the fair market value of the cryptocurrency at the time of the transaction. This value will be used to determine your gains or losses. Finally, you'll report your cryptocurrency transactions on Schedule D of your tax return. If you have any doubts or questions, it's always a good idea to consult with a tax professional.
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• Nov 29, 2021 · 3 years ago
  As a third-party exchange, BYDFi does not provide tax advice. However, it's important to note that the IRS requires taxpayers to report all cryptocurrency transactions on their tax returns. This includes buying, selling, trading, and mining cryptocurrency. Failure to report these transactions accurately can result in penalties and audits. It's always a good idea to consult with a tax professional to ensure that you are in compliance with the IRS guidelines and reporting your cryptocurrency transactions correctly.
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