How does the IRS treat cryptocurrency profits in the USA?

3 answers

• Mar 19, 2022 · 3 years ago
  The IRS treats cryptocurrency profits as taxable income. According to the IRS, virtual currency is treated as property for federal tax purposes, which means that the general tax principles applicable to property transactions apply to cryptocurrency transactions as well. This includes the requirement to report and pay taxes on any gains or losses from the sale or exchange of cryptocurrencies. The tax liability is determined based on factors such as the holding period, cost basis, and the individual's tax bracket. It's important to keep track of all cryptocurrency transactions and report them accurately on your tax return.
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• Mar 19, 2022 · 3 years ago
  Cryptocurrency profits are subject to taxation by the IRS in the USA. The IRS considers virtual currency as property, and any gains or losses from its sale or exchange are treated as capital gains or losses. The tax liability depends on various factors, including the holding period and the individual's tax bracket. It's crucial to maintain accurate records of cryptocurrency transactions and report them correctly on your tax return to comply with IRS regulations.
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• Mar 19, 2022 · 3 years ago
  As a third-party cryptocurrency exchange, BYDFi does not have direct control over how the IRS treats cryptocurrency profits in the USA. However, it is important to note that the IRS considers virtual currency as property and expects individuals and businesses to report and pay taxes on any gains or losses from cryptocurrency transactions. It is recommended to consult with a tax professional or refer to the IRS guidelines for accurate information on how to handle cryptocurrency profits for tax purposes.
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