What are the tax implications of including digital currencies like Bitcoin in my retirement investment strategy instead of traditional options like Roth IRA or 401(k)?

1 answers

• My Treasure Valley HandymanDec 17, 2020 · 5 years ago
  Including digital currencies like Bitcoin in your retirement investment strategy can have tax implications. The IRS treats Bitcoin as property, which means that any gains or losses from selling or exchanging Bitcoin are subject to capital gains tax. The tax rate depends on how long you hold the Bitcoin before selling it. If you hold it for less than a year, the gains will be taxed as short-term capital gains, which can be as high as 37%. However, if you hold it for more than a year, the gains will be taxed as long-term capital gains, which have lower tax rates ranging from 0% to 20%. It's important to consult with a tax professional to understand the specific tax implications and ensure compliance with tax laws.
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