How does the IRS classify and tax cryptocurrencies?

3 answers

• Dec 18, 2021 · 3 years ago
  Sure! The IRS classifies cryptocurrencies as property, not currency. This means that when you buy, sell, or exchange cryptocurrencies, you may have to report capital gains or losses on your tax return. It's important to keep track of your transactions and calculate your gains or losses accurately to comply with IRS regulations. Remember to consult with a tax professional for specific guidance based on your individual situation.
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• Dec 18, 2021 · 3 years ago
  The IRS treats cryptocurrencies like Bitcoin and Ethereum as taxable assets. When you sell or exchange cryptocurrencies, you may trigger a taxable event, similar to selling stocks or other investments. The tax rate depends on how long you held the cryptocurrency before selling it. If you held it for less than a year, it's considered a short-term capital gain and taxed at your ordinary income tax rate. If you held it for more than a year, it's considered a long-term capital gain and taxed at a lower rate. Make sure to keep accurate records of your transactions and consult with a tax professional for the most up-to-date information.
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• Dec 18, 2021 · 3 years ago
  As a representative from BYDFi, I can tell you that the IRS classifies and taxes cryptocurrencies as property. This means that when you buy or sell cryptocurrencies, you may be subject to capital gains tax. It's important to keep track of your transactions and report them accurately to the IRS. Failure to do so could result in penalties or legal consequences. Remember to consult with a tax professional for personalized advice based on your specific situation.
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