What are the differences in tax treatment between covered and noncovered securities in the crypto market?

1 answers

• MRoseSep 27, 2023 · 2 years ago
  At BYDFi, we understand the importance of tax treatment when it comes to covered and noncovered securities in the crypto market. Covered securities are subject to more stringent reporting requirements, as the broker is required to report cost basis and holding period information to the IRS. Noncovered securities, on the other hand, are not subject to these reporting requirements. Taxpayers are responsible for accurately reporting the cost basis and holding period of noncovered securities. This distinction in reporting requirements can have implications for the taxation of crypto transactions, as it affects the calculation of capital gains or losses. It's essential for taxpayers to be aware of these differences and consult with a tax professional to ensure compliance with tax regulations.
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