How are capital gains taxes calculated for cryptocurrency investments?

1 answers

• Gianclaudio MattiaccioMar 17, 2023 · 2 years ago
  Calculating capital gains taxes for cryptocurrency investments can be a bit tricky, but here's a simplified explanation. The cost basis of your cryptocurrency is the amount you paid to acquire it, including any fees. When you sell your cryptocurrency, you'll need to determine the fair market value at the time of the sale. The difference between the fair market value and the cost basis is your capital gain or loss. If you held the cryptocurrency for less than a year before selling, it's considered a short-term capital gain and taxed at your ordinary income tax rate. If you held it for more than a year, it's considered a long-term capital gain and subject to lower tax rates. Remember to keep track of your transactions and consult a tax professional for accurate calculations.
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