What are the tax considerations for short vs. long term capital gains on cryptocurrency transactions?

1 answers

• Dec 30, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, advises that short-term capital gains on cryptocurrency transactions are subject to your ordinary income tax rate. This means that if you're in a higher tax bracket, you could end up paying a significant amount in taxes. On the other hand, long-term capital gains enjoy lower tax rates, which can be as low as 0% for those in the lower income brackets. It's crucial to keep track of your holding period to determine whether your gains are considered short-term or long-term. Remember, always consult with a tax professional to understand the specific tax implications for your situation and ensure compliance with the tax laws.
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