How does the IRS treat bitcoin for tax purposes?

3 answers

• Dec 26, 2021 · 3 years ago
  Sure! The IRS treats bitcoin as property rather than currency for tax purposes. This means that any gains or losses from the sale or exchange of bitcoin are subject to capital gains tax. If you hold bitcoin for less than a year before selling, the gains are considered short-term and taxed at your ordinary income tax rate. If you hold bitcoin for more than a year, the gains are considered long-term and taxed at a lower capital gains tax rate. It's important to keep track of your bitcoin transactions and report them accurately on your tax return.
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• Dec 26, 2021 · 3 years ago
  The IRS treats bitcoin like any other investment for tax purposes. When you sell or exchange bitcoin, you may have to report the transaction and pay taxes on any gains. However, if you sell bitcoin at a loss, you may be able to deduct that loss from your taxable income. It's always a good idea to consult with a tax professional to ensure you're meeting your tax obligations when it comes to bitcoin and other cryptocurrencies.
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• Dec 26, 2021 · 3 years ago
  As a representative of BYDFi, I can tell you that the IRS treats bitcoin as property for tax purposes. This means that any gains or losses from the sale or exchange of bitcoin are subject to capital gains tax. It's important to keep detailed records of your bitcoin transactions, including the date of acquisition, the date of sale, and the amount of bitcoin involved. This will help you accurately calculate your capital gains or losses and report them on your tax return. If you have any specific questions about how to handle your bitcoin taxes, it's always a good idea to consult with a tax professional.
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