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How does California calculate capital gains tax for cryptocurrency?

avatarJohns EmersonDec 26, 2021 · 3 years ago1 answers

Can you explain how California calculates capital gains tax for cryptocurrency? I'm curious about the specific methods and formulas they use.

How does California calculate capital gains tax for cryptocurrency?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    In California, capital gains tax for cryptocurrency is calculated based on the same principles as for other assets. The taxable gain is determined by subtracting the purchase price from the selling price of the cryptocurrency. If you hold the cryptocurrency for less than a year, it is considered a short-term capital gain and taxed at your regular income tax rate. If you hold it for more than a year, it is considered a long-term capital gain and taxed at a lower rate. The specific tax rates for long-term capital gains depend on your income level. It's important to keep accurate records of your transactions and consult with a tax professional to ensure compliance with California tax laws.