What are the long term vs short term capital gains tax rates for cryptocurrencies?

3 answers

• Nov 29, 2021 · 3 years ago
  Long term and short term capital gains tax rates for cryptocurrencies are based on the holding period of the asset. If you hold a cryptocurrency for more than one year before selling, it is considered a long term capital gain and taxed at a lower rate. Short term capital gains, on the other hand, are for assets held for less than one year and are taxed at the individual's ordinary income tax rate. These rates vary depending on the individual's income level and tax bracket. It's important for cryptocurrency investors to understand these rates to properly plan their tax obligations.
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• Nov 29, 2021 · 3 years ago
  When it comes to capital gains tax rates for cryptocurrencies, the difference between long term and short term is all about timing. If you hold a cryptocurrency for more than a year before selling, you'll be subject to long term capital gains tax rates, which are typically lower than short term rates. On the other hand, if you sell a cryptocurrency within a year of acquiring it, you'll be subject to short term capital gains tax rates, which are taxed at your ordinary income tax rate. It's crucial to keep track of your holding periods to optimize your tax strategy.
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• Nov 29, 2021 · 3 years ago
  BYDFi, as a third-party cryptocurrency exchange, does not provide tax advice. However, I can give you a general idea of the long term vs short term capital gains tax rates for cryptocurrencies. Long term capital gains tax rates are usually lower than short term rates. For example, in the United States, long term capital gains tax rates can range from 0% to 20%, depending on your income level. Short term capital gains tax rates are based on your ordinary income tax rate, which can be as high as 37%. It's always recommended to consult with a tax professional for accurate and up-to-date information regarding capital gains tax rates for cryptocurrencies.
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