How does the federal government tax cryptocurrency earnings?

1 answers

• Abhinav DeshpandeOct 25, 2020 · 5 years ago
  As an expert in the field, I can tell you that the federal government treats cryptocurrency earnings as taxable income. The IRS considers cryptocurrency as property, so any gains from selling or exchanging it are subject to capital gains tax. The tax rate depends on how long you held the cryptocurrency before selling it. If you held it for less than a year, it's considered a short-term gain and taxed at your ordinary income tax rate. If you held it for more than a year, it's considered a long-term gain and taxed at a lower capital gains tax rate. It's important to stay compliant with tax regulations and accurately report your cryptocurrency earnings to avoid any legal issues.
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