What are the tax implications of including digital currencies in a 403b vs 401k portfolio?

Mr Sacha BonaventMar 24, 2022 · 3 years ago3 answers

I would like to know more about the tax implications of including digital currencies, such as Bitcoin and Ethereum, in a 403b vs 401k portfolio. How does the tax treatment differ between these retirement accounts? Are there any specific rules or regulations that I need to be aware of when investing in digital currencies through these retirement accounts?

Digital Currencies

Tax Implications

403b

3 answers

Mar 24, 2022 · 3 years ago
When it comes to the tax implications of including digital currencies in a 403b or 401k portfolio, it's important to understand that the IRS treats cryptocurrencies as property for tax purposes. This means that any gains or losses from the sale or exchange of digital currencies are subject to capital gains tax. However, the tax treatment may vary depending on whether you hold the digital currencies in a 403b or 401k account. In a 403b account, the tax implications of digital currencies are similar to other investments. Any gains or losses from the sale or exchange of digital currencies within the 403b account are tax-deferred until you make a withdrawal. At the time of withdrawal, the gains or losses will be subject to ordinary income tax rates. In a 401k account, the tax implications are also similar to other investments. However, there may be additional restrictions or limitations imposed by the plan administrator. It's important to review the plan documents and consult with a tax professional to understand the specific rules and regulations that apply to digital currencies in your 401k account.
Mar 24, 2022 · 3 years ago
Including digital currencies in a 403b or 401k portfolio can have tax implications that you need to consider. The IRS treats cryptocurrencies as property, which means that any gains or losses from the sale or exchange of digital currencies are subject to capital gains tax. However, the tax treatment may differ depending on whether you hold the digital currencies in a 403b or 401k account. In a 403b account, the tax implications of digital currencies are similar to other investments. Any gains or losses from the sale or exchange of digital currencies within the 403b account are tax-deferred until you make a withdrawal. At the time of withdrawal, the gains or losses will be subject to ordinary income tax rates. In a 401k account, the tax implications are also similar to other investments. However, there may be additional restrictions or limitations imposed by the plan administrator. It's important to review the plan documents and consult with a tax professional to understand the specific rules and regulations that apply to digital currencies in your 401k account.
Mar 24, 2022 · 3 years ago
As a third-party expert, BYDFi can provide insights into the tax implications of including digital currencies in a 403b or 401k portfolio. The IRS treats cryptocurrencies as property, so any gains or losses from the sale or exchange of digital currencies are subject to capital gains tax. However, the tax treatment may vary depending on whether you hold the digital currencies in a 403b or 401k account. In a 403b account, the tax implications of digital currencies are similar to other investments. Any gains or losses from the sale or exchange of digital currencies within the 403b account are tax-deferred until you make a withdrawal. At the time of withdrawal, the gains or losses will be subject to ordinary income tax rates. In a 401k account, the tax implications are also similar to other investments. However, there may be additional restrictions or limitations imposed by the plan administrator. It's important to review the plan documents and consult with a tax professional to understand the specific rules and regulations that apply to digital currencies in your 401k account.