How does the IRS treat taxes on PayPal transactions involving digital currencies?

3 answers

• Feb 19, 2022 · 3 years ago
  According to the IRS, transactions involving digital currencies, such as Bitcoin or Ethereum, are treated as property for tax purposes. This means that any gains or losses from these transactions are subject to capital gains tax. When using PayPal for such transactions, it is important to keep track of the cost basis and fair market value of the digital currencies at the time of the transaction. Failure to report these transactions accurately can result in penalties and interest.
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• Feb 19, 2022 · 3 years ago
  The IRS treats transactions involving digital currencies on PayPal similarly to other property transactions. Any gains made from selling or exchanging digital currencies are subject to capital gains tax. It is important to report these transactions accurately and keep records of the cost basis and fair market value of the digital currencies at the time of the transaction. If you're unsure about how to report these transactions, it's recommended to consult with a tax professional.
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• Feb 19, 2022 · 3 years ago
  According to the IRS, transactions involving digital currencies on PayPal are treated as property transactions. This means that any gains or losses from these transactions are subject to capital gains tax. It's important to note that the tax treatment of digital currencies can vary depending on individual circumstances, so it's always a good idea to consult with a tax professional for personalized advice. At BYDFi, we provide resources and guidance to help our users understand their tax obligations related to digital currency transactions.
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