One topic most people don’t seem to be aware of, even as cryptoasset owners, is the benefits and implications of crypto taxes. We break it down for you to understand exactly what that means and how it could affect you this tax season.
The IRS treats “virtual currency” as property, which means every trade you complete with cryptoassets is a taxable event.
- If you sell your cryptoassets to purchase goods (iPhone X or a 1965 Ford Mustang) or services (an event planner for your Grandmother’s 90th birthday bash or a developer to build an app for your business), it’s a taxable event.
- If you exchange your Ether for Bitcoin or vice versa, it’s a taxable event.
- If you liquidate your cryptoassets for USD, it’s a taxable event.
Due to the increasing popularity and value of certain cryptoassets, you have the potential to make a substantial return by purchasing Bitcoin or Ether for investment purposes. It’s important to understand how capital gains taxes work if your crypto investments increase in value.
Minimize your tax liability with our easy to use calculator! Use a crypto tax calculator that will automatically categorize your transaction history and learn from your input.
- Support for ICOs, OTC, pools, airdrops, mining rewards, lost or stolen funds, crypto payments, and all your favourite exchanges. https://mycryptotaxcalculator.com/
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