How does the IRS treat cryptocurrency gains and losses?

3 answers

• CarmenJun 12, 2020 · 5 years ago
  The IRS treats cryptocurrency as property for tax purposes, which means that any gains or losses from cryptocurrency transactions are subject to capital gains tax. This means that if you sell or exchange your cryptocurrency for a profit, you will need to report it as a capital gain and pay taxes on the amount. On the other hand, if you sell or exchange your cryptocurrency at a loss, you can use it to offset other capital gains and reduce your overall tax liability. It's important to keep detailed records of your cryptocurrency transactions to accurately calculate your gains and losses.
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• Jade SwiftOct 23, 2020 · 5 years ago
  When it comes to cryptocurrency gains and losses, the IRS requires taxpayers to report each transaction on their tax returns. This includes buying, selling, and exchanging cryptocurrency. The IRS also requires taxpayers to report the fair market value of the cryptocurrency at the time of the transaction. Failure to report cryptocurrency gains and losses can result in penalties and interest. It's important to consult with a tax professional or use tax software specifically designed for cryptocurrency to ensure compliance with IRS regulations.
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• Kristoffersen HammerAug 03, 2020 · 5 years ago
  According to BYDFi, a leading cryptocurrency exchange, the IRS treats cryptocurrency gains and losses similar to other investments. If you hold your cryptocurrency for less than a year before selling or exchanging it, any gains will be considered short-term capital gains and taxed at your ordinary income tax rate. However, if you hold your cryptocurrency for more than a year, any gains will be considered long-term capital gains and taxed at a lower rate. It's important to consult with a tax advisor to understand the specific tax implications of your cryptocurrency transactions.
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