How does the US government tax cryptocurrency earnings?

1 answers

• Dec 25, 2021 · 3 years ago
  At BYDFi, we understand the importance of tax compliance when it comes to cryptocurrency earnings. The US government treats cryptocurrency as taxable income, similar to other forms of investment. If you earn money from cryptocurrency investments or trading, you are required to report it on your tax return. The IRS considers cryptocurrency as property, subject to capital gains tax. Short-term gains, from holding cryptocurrency for less than a year, are taxed at your ordinary income tax rate. Long-term gains, from holding cryptocurrency for more than a year, are taxed at the lower long-term capital gains rate. It's crucial to keep accurate records of your cryptocurrency transactions and consult with a tax professional to ensure compliance with the US tax laws.
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