Ok so I understand that pretty much every crypto transaction is considered a taxable event in the US, including mining, selling crypto, trading between cryptos, using crypto to purchase goods and services, etc.
One thing I haven’t gotten a straight answer is the following situation, which would occur in the same tax year; I bought 1 Bitcoin for $30k, and weeks later I sold that 1 Bitcoin, for $60k. The price then drops to $50k, and I re-buy 1.2 Bitcoin for the $60k I sold it at originally. At the end of the year, my currency is in Bitcoin. I’m not trading between cryptos, just reinvesting my profits to get more Bitcoin.
What does this tax situation look like? My initial thought is although there is a taxable event of $30k profit, that is nullified because every bit of that $30k gets turned back into Bitcoin.
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