Cryptocurrency Trades and Income Taxes 2021

Virtual Currency – Real Taxation

By Staff Reporters

What you need to report to the IRS

The IRS treats virtual currencies as property, which means they’re taxed similarly to stocks. If all you did was purchase cryptocurrency with U.S. dollars, and those assets have been sitting untouched in an exchange or your cryptocurrency wallet, you shouldn’t need to worry about reporting to the IRS.

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Reporting is required when certain events come into play, most commonly:

  • Trading one cryptocurrency for another.
  • Selling cryptocurrency for fiat dollars (government-issued currency).
  • Using cryptocurrency to buy goods or services (e.g., paying for a cup of coffee with cryptocurrency).

A critical distinction to make is that triggering a taxable event doesn’t necessarily mean you’ll owe taxes, said Andrew Gordon, an Illinois-based certified public accountant and tax attorney. Just because you have to report a transaction doesn’t mean you’ll end up owing the IRS for it.

READ HERE: https://www.msn.com/en-us/money/taxes/yes-you-must-pay-taxes-on-cryptocurrency-trades-heres-how/ar-AATamDL?li=BBnb7Kz

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2 Responses

  1. GEN X

    It’s yet more evidence that millennials, now aged 26 to 41, really are the smartest generation ever. Interestingly, Generation Z — meaning those aged 18 to 25 — is way behind on crypto.

    Gen Xers are actually more into cryptocurrency than Gen Z. Some 28% of Generation X own crypto and 20% are planning to rely on it for their retirement — an impressive number as Gen Xers are already aged 42 to 57.

    Clyde

    Like

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