How does the timing of cryptocurrency transactions affect tax payments?

1 answers

• Apr 09, 2022 · 3 years ago
  Definitely! The timing of your cryptocurrency transactions can play a role in determining your tax payments. The IRS treats cryptocurrencies as property, and any gains or losses from their sale are subject to taxation. If you sell a cryptocurrency at a profit within a year of acquiring it, you'll be taxed at your ordinary income tax rate. However, if you hold onto the cryptocurrency for more than a year before selling, you'll be eligible for the lower long-term capital gains tax rate. So, timing your transactions can make a difference in how much you owe in taxes.
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