What are the tax implications of buying digital assets with unsettled funds?

1 answers

• Mills ThraneAug 22, 2024 · a year ago
  When it comes to buying digital assets with unsettled funds, it's crucial to consider the potential tax implications. The IRS treats digital assets as property, which means that any gains you make from selling them may be subject to capital gains tax. The tax rate will depend on how long you hold the assets before selling. If you sell within a year, the gains will be taxed at your ordinary income tax rate. If you hold for more than a year, the gains will be subject to the lower capital gains tax rate. It's essential to keep accurate records of your digital asset transactions and consult with a tax professional to ensure compliance with tax laws.
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