When do you get taxed on cryptocurrency investments?

3 answers

• Jan 07, 2022 · 3 years ago
  Sure! When it comes to cryptocurrency investments, taxes can be a bit tricky. In general, you'll be taxed on any gains you make from selling or exchanging cryptocurrencies. This includes both short-term and long-term capital gains. Short-term gains are taxed at your ordinary income tax rate, while long-term gains are taxed at a lower rate, typically 15% or 20% depending on your income level. It's important to keep track of your transactions and report them accurately on your tax return to avoid any issues with the IRS.
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• Jan 07, 2022 · 3 years ago
  Well, the tax treatment of cryptocurrency investments can vary from country to country. In the United States, the IRS considers cryptocurrencies as property, so the tax rules for property transactions apply. This means that every time you sell or exchange a cryptocurrency, it's considered a taxable event. The amount of tax you owe will depend on your income level and how long you held the cryptocurrency. It's always a good idea to consult with a tax professional to ensure you're complying with the tax laws in your country.
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• Jan 07, 2022 · 3 years ago
  As an expert at BYDFi, I can tell you that when you get taxed on cryptocurrency investments depends on several factors. First, the frequency of your trading activities can determine whether you're considered a casual investor or a professional trader. Casual investors are usually taxed on their capital gains, while professional traders may be subject to self-employment taxes. Second, the holding period of your investments matters. If you hold a cryptocurrency for less than a year before selling, it's considered a short-term gain and taxed at your ordinary income tax rate. If you hold it for more than a year, it's a long-term gain and taxed at a lower rate. Finally, the tax laws in your country of residence also play a role. It's always a good idea to consult with a tax advisor to understand the specific tax implications for your cryptocurrency investments.
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