Quick Summary
In recent years and by 2020, cryptocurrencies like Bitcoin have gained significant popularity. This increase in visibility allows policymakers to rely more on the asset. We have recently seen the IRS release new crypto-monetary tax guidelines and begin sending thousands of warning letters to non-con
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FAQ :
The IRS treats cryptocurrencies such as Bitcoin, Ethereum, and XRP as property, not as currency, for tax purposes.
A taxable event is any action that triggers a tax reporting obligation, resulting in a capital gain or capital loss on your tax return.
Yes, if you have lost money trading cryptocurrency, you can report these losses to potentially save money on your taxes. Some also sell assets to reduce tax liability, a practice known as tax-loss harvesting.
Determining fair market value can be challenging because many trades are quoted in other cryptocurrencies rather than USD, and traders may not keep accurate records of the dollar value at the time of each transaction.
Failure to report cryptocurrency taxes is considered tax fraud by the IRS.
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